Workers compensation is a state-regulated insurance system that provides covered employees with income and medical benefits if they are injured on the job or have a work-related injury or illness. Workers’ compensation insurance coverage limits an employer’s liability if an employee brings suit against the employer for damages.
As mentioned Workers Compensation is governed by each state, although each system differs slightly in the details, the overall structure and operation of the workers’ compensation system is very similar. The main differences are the rates paid to injured employees and the procedural rules employers, employees, and insurance companies must follow. For state specific information see: http://www.dol.gov/owcp/dfec/regs/compliance/wc.htm
What Does Workers’ Compensation Cover?
Workers compensation laws cover only work-related injury or illness. But, the injury or illness does not necessarily have to occur in the workplace. As long as it’s job-related, it’s covered. For example, employees are covered if they are injured while traveling on business, doing a work-related errand, or attending a business-related social function. That is why it is important to have safety, travel and other policies and procedures in place. This can lower your liability if the employee violates these policies.
Does Workers Compensation Protect my Business from All Employee Injury Lawsuits?
Employers aren’t protected from all employee lawsuits related to injuries. If the employee is injured because of the employer’s intentional or reckless actions the employee can bypass the workers’ compensation system to file a lawsuit against the employer. They can sue for a full range of money damages, including punitive damages, pain and suffering, and mental anguish.
What Kind of Benefits Does Workers’ Compensation Offer Employees?
Workers compensation insurance can provide employees with the following benefits:
- Replacement income when employees are off work.
- Payments for medical expenses, including doctors’ visits, surgeries, and prescription drugs, and vocational rehabilitation benefits.
- An employee who becomes permanently unable to do the work he or she was doing prior to the injury, or unable to work at all, may be eligible for long-term or lump-sum benefits for permanent disability.
- Workers compensation can also pay death benefits to surviving dependents of workers who are fatally injured in a work-related incident.
Employers Obligations for Workers Compensation Compliance
Employers must post required notices in an area location frequented by employees during working hours.
The notices or posters contain important information about employees’ rights.
- Workers Compensation Insurance Information (receive from insurance company)
- OSHA Safety and Health Poster
- OSHA Recording of Work Place Injury and Illness
Employers also must provide injured employees with a workers’ compensation claim form within 24 hours of receiving notice of the injury. (Claim forms vary from state to state, contact your workers compensation insurance company for necessary form).
Employers must also supply the employee with written information (usually a pamphlet) about the employee’s rights under the workers’ compensation system. The written material should provide details about available benefits and how to file a claim. (Download WC Folder Documents and Workers Compensation Form Instructions for more info).