What should you do when you are off work and on worker's compensation due to a work injury and have been told by other workers that you will be demoted and paid less until you leave if you return?

You need to take seriously what you have been told. Workmen's Compensation protection may totally end once a physician certifies you as fit to return to work; and, any restrictions which may be attached to that certification as pertain to the type of work you are able to do are open to interpretation. Violation of these restrictions by either you or your employer introduce complications that may make legal action necessary. Such action, even proving to be finally in your favor, could provide little benefit for you. You need to keep in mind that your employer's intentions are to provide the most of whatever they produce, and do that with the least complication, at the least expense. Any employee that is unable to function at optimum efficiency and produce consistently, within the framework the employer applies to all other employees, is at risk of being cut from the payroll. If that employee is protected by Workmen's Compensation, the employer cannot do that in most cases. Once that protection ends, the employee is out in the open--- and measured the same as any other employee. If that employee is considered to be a liability, then it is entirely possible that the employer will seek to eliminate that liability--- whether through termination or other means which force the worker to quit their job voluntarily. That does not mean that every employer will do this; but, it is a distinct possibility. You also have a mark on your employment record with that employer which may or may not be conveyed to another potential employer directly or indirectly, as the law allows. This mark says that you both were injured and that you filed for and received benefits under Workmen's Compensation. If seen by a prospective employer, this could eliminate you from consideration of a position with them. All of this is the back edge of the two-edged sWord that is Workmen's Compensation. You need to take a hard look at your employer's propensities in dealing with their employees. Your good work ethic, attention to detail, and service record may not outweigh an employer's distaste for those who have legally caused them discomfort; and, retaliation through firing is an open option for all those who are "at will" employees... To depend upon an employer's "good graces" for a good outcome is often fruitless. If your condition has improved to the point that you can demonstrate that your ability has not diminished, and that your capacity for meaningful work is at least as strong as before, you might beat the odds; but, in your employment jacket there will remain the record of this "incident" on your record which has moved you one step closer to the door. Your employment by anyone is never guaranteed; but, not every employer uses their Human Resources Department solely for the purpose of finding employees to terminate. The larger the employer, the more turnover may be expected. Once Workmen's Compensation coverage has ended for you, you will need to get back to work; and, you will have potentially more "work" to do in that regard than you anticipated. Being as prepared for what may come is your best option...