Is It Illegal to Work While on Workers’ Compensation?
What you need to know about getting a new job while on workers’ comp
on August 24, 2022
Updated on January 29, 2023
“Being involved in a work-related accident can be a life-altering event for an injured worker,” says Pennsylvania workers’ compensation attorney Alfred J. Carlson.
Some workplace injuries happen immediately. Others, such as occupational diseases, develop over a longer period of time. Workers’ compensation covers injured employees’ expenses, including medical bills and lost wages.
Employees recovering from workplace injuries often want a second job to supplement their workers’ comp payments. Can you do this?
The answer to this question depends on several factors and is very fact-specific. Generally, you can’t start working a second job while receiving workers’ comp. However, there are some nuances—for example, if you were already working a second job before your injury.
This article will cover the nuances of working a second job while getting workers’ comp. The crucial thing is to report any changes to your employer and workers’ compensation insurance carrier. If you get a second job while collecting workers’ compensation and don’t tell your employer, that could constitute workers’ compensation fraud and result in fines or even jail time.
How Does Workers’ Compensation Work?
Every state has a workers’ compensation system requiring employers to carry workers’ compensation insurance for possible workplace injuries. State laws governing how workers’ comp payments are calculated and paid out vary.
Regardless of the state compensation program, workers’ comp benefits generally cover medical treatment and wage loss due to workplace injury. Depending on the type of work, workers’ comp can also cover the costs of retraining needed for an employee to return to work after an absence.
In most states, medical expenses are covered without a cap on the cost. Workers’ comp payments for lost wages are generally calculated based on your average weekly wages before the workplace injury.
In many states, workers’ comp payments equal two-thirds (65%) of your average earnings, though the amount is higher in some states. Though it’s lower than your actual earnings, workers’ comp is not taxable.
Because these laws can be complicated, it’s a good idea to speak with a workers’ comp attorney in your area as soon as possible to ensure the best outcome in your case.
Is It Illegal to Work Another Job While on Workers’ Compensation?
The answer to this question “will potentially vary from state to state,” says Carlson. In general, the point of workers’ comp is to compensate you for lost wages resulting from your workplace injuries. When you return to work, you get wages directly and no longer need the workers’ comp.
One of the key questions is whether you had a second job before getting injured or if you got a second job after your injury.
Scenario 1: You Already Had a Second Job
Say your primary job is in the construction industry. This is the job you got injured in. You also had a second part-time job as a cashier at a local gift shop.
Generally, workers’ comp will cover lost wages from the construction job where you were injured and the second job you can’t work because of those injuries.
You can return to your second job in the gift shop while receiving worker’s comp, but your workers’ comp payments will likely need to be adjusted since you’re getting wages from the second job again. The portion of workers’ comp that covered the second job is no longer needed.
In Pennsylvania: “[Say] you were working two jobs at the time of your work injury… you are injured in one job, and it precludes you from working that job or your second job,” says Carlson.
“You could still work one of those jobs and be entitled to workers’ compensation benefits – but [workers comp insurance] will pay you less money” since you’re getting some of your wages again, he says.
Scenario 2: You Get a Second Job After Your Injury
“[Say] you were only working one job at the time of your work injury. [You] were disabled from that job but later went back to work at a new job. [In this case], you would have to let your former employer and workers’ compensation insurance company know as soon as possible,” says Carlson.
When do you have to notify your employer of changes?
“Certainly by the time you’ve received your first paycheck from the new job,” says Carlson. The employer needs to know “so that they can either suspend or modify [your] workers’ compensation benefits going forward.”
“To return to work at a new employer after a work-related injury and not let the insurance carrier know could definitely be considered insurance fraud,” he says.
In some states, workers’ compensation laws allow injured workers to return to “light duty work” while receiving full workers’ comp. Still, informing your employer of any changes is imperative to avoid fraud or other legal trouble. If you have questions about your state laws and whether you can return to work, speak with a workers’ comp attorney in your area.
Questions for a Workers’ Comp Attorney
Many workers’ comp attorneys provide free consultations to discuss the specifics of your case. To see whether an attorney or law firm is a good fit, ask informed questions such as:
- What are your legal fees?
- Do you charge on a contingency fee basis?
- Can I work a second job while on workers’ comp?
- How do I make sure I get workers’ comp for my second job?
- How do I report changes in my work situation?
Look for a workers’ compensation attorney in the Super Lawyers directory to help with workers’ comp issues.