What Is Workers’ Compensation? Your Questions, Answered.

By Haley Bass | 07/25/2018

Workers' compensation refers to a set of state-mandated and federal rules and regulations that provide financial support and medical care for workers who get injured on the job. These regulations were enacted to help improve workplace safety and protect employee health, and are an important element of the modern workplace.

What is workers’ compensation insurance?

Workers’ compensation is a state-regulated insurance system that pays medical bills and some lost wages to employees who are injured on the job, or who have work-related diseases or illnesses. Employees get benefits based on the type and severity of their injuries and/or illnesses. Federal employees are subject to different workers’ compensation guidelines.

Is workers’ compensation different in every state?

Each state has specific regulations regarding workers’ compensation. To find your state’s specific regulations, click here.

To effectively manage their workplace, it’s important for employers to understand the complex facets of the workers' compensation system for the states in which they operate. In some states, the size of an organization’s workforce dictates whether an employer must offer workers’ compensation to their employees. In other states, insurance providers and patients have a choice of primary caregiver and rehabilitation services.

Wisconsin passed the first state-based workers’ compensation law in the United States in 1911, setting the standard for the way we handle work injuries today. Employees are no longer required to prove liability, but they also can’t sue their employers if they accept the benefits of their workers’ compensation. It is also known as a "no-fault" system.

What is the “no-fault” system?

The no-fault system works by paying claims regardless of who is to blame for an incident. This means that the insurance pays workers’ comp benefits no matter who is found to be at fault for a workplace injury. This ensures workers won’t have to prove their case before receiving benefits.

What is workers’ compensation injury care?

When an employee is injured at work, the first thing to do is seek medical care. Their best option is a clinician trained in occupational medicine.

Occupational medicine clinicians specialize in treating work-related injuries. They consistently work with the workers' compensation system and understand the importance of returning employees back to work as smoothly as possible. The top occupational health care providers understand the importance of communicating with patients, payors, and employers, and have the tools to do so. This helps to streamline the process and avoid unnecessary delays in recovery or claims processing.

What are common workers’ compensation claims?

The most common workers’ compensation claims include the following: 

  • Overexertion – This happens when a muscle is pulled or forced beyond its normal point of motion due to repetitive use. It is most common in construction, factory, and warehouse jobs.
  • Slips, trips, and falls – These injuries are often caused by wet floors or raised mats in doorways and halls.
  • Falls from a height – These normally happen from a ladder or rooftop and are typically seen in the construction industry.
  • Sprains and Strains – This typically occurs when someone tries to correct a fall or trip, and ends up hurting themselves through a sprained wrist or twisted ankle. 
  • Struck by an object – Usually, being struck by an object occurs when an object falls from a ledge or shelf and hits an employee walking by.

These claims can be reduced with the right occupational health program.

What doesn’t workers’ compensation cover?

Injured employees can be denied compensation for many reasons, including:

  • Injuries caused by intoxication or drugs
  • Self-inflicted injuries
  • Injuries from a fight started by the employee
  • Injuries resulting from violation of company policy
  • Felony-related injuries
  • Injuries an employee suffers off the job
  • Injuries claimed after an employee is terminated
  • Injuries to an independent contractor

What benefits are available from workers’ compensation?

Although the amount varies by state, claimants can receive replacement wages and compensation for medical expenses. Claimants may also receive temporary disability payments, which in many states is equal to two-thirds of their average wages, up to a fixed amount. A permanently disabled claimant may qualify for a lump sum or benefits throughout the duration of their disability. The claimant must be unable to perform their previous work duties or be unable to work at all to receive these benefits. In case of death, the surviving dependents receive the deceased worker’s benefits. On-the-job training, education, or job placement assistance is also available in some states.

What are the employer’s workers’ compensation responsibilities?

In addition to following their state’s regulations, employers should also post notices advising employees of their legal rights. These must be posted in a convenient location frequented by employees during working hours. These notices typically tell employees if their employer is self-insured, display contact information regarding the company’s workers’ compensation carrier, and give details about available benefits. Posted notices should state that injured employees have the right to medical treatment and whether they can choose and/or change their treating physician, which differs by state.

How to file a workers’ compensation claim

When filing a workers’ compensation claim, employees should go over their state’s regulations with their employer. Regulations vary for each state, but the necessary steps are generally similar. Depending on the severity of the injury, employees may need to seek medical attention immediately. If the injury is not severe, most states set a time limit that can range from a few days to two years. Employers must typically provide a workers’ compensation claim form within 24 hours of receiving notice of the injury.

*This document is an overview and does not constitute legal or medical advice. Always seek legal advice specific to your state and situation.