How Does Workers Compensation Work?

Workers Compensation is a state program that provides benefits to qualified employees who suffer work-related injuries on the job and are unable to work. The benefits cover medical and rehabilitation expenses. In most states, these benefits extend to eligible employees regardless of any fault on the part of either the employee or the employer. Additionally, in some states it is mandatory for the employer to buy some type of coverage but again laws vary on what percentage of an injured employee's wages the employer must pay and how long the coverage will last.

State Workers Compensation Laws and Benefits

State worker compensation laws vary regarding the types of employees and work-related that are covered. Typically the following groups are excluded from coverage:

  • contractors and consultants
  • volunteer workers
  • farm workers
  • domestic servants

State laws also vary regarding whether coverage extends to part-time employees.

The general benefits given under workers compensation include:

  • lost wages based on disability
  • hospital and medical expenses
  • death benefits

Most state laws provide a schedule of payments pertaining to certain types of permanent bodily impairments or loss of a body part or physical sense. These laws increase benefits for successive disabilities. Wage-loss benefits typically cover approximately one-half to two-thirds of the injured employee's average weekly wage.

All states provide medical and hospital benefits and this coverage includes ancillary expenses such as transportation, equipment and nursing care.

In cases where the employee does not survive a work-related illness or injury, his or her dependent survivors (spouse, children) receive benefits based on the parameters set by state law.

Exclusive Remedy

Most workers compensation mandate an exclusive remedy against the employer. This means that in exchange for receiving workers compensation the injured employees are barred from suing their employers in civil court. However, some states provide an exception to this general rule in cases where there is employer misconduct. This allows the employee to sue the employer or in other cases to receive increased benefits.

Workers compensation laws do not bar the employee's right to sue a third party if that party's negligence contributed to the accident. For instance, an employee may sue the driver of a non-company vehicle that caused the on-site accident that injured the employee. Damages awarded from the suit, however, are first given to the employer to offset benefits already paid to the employee and the remainder of the damages goes to the employee.

Processing Claims

Processing workers compensation claims generally involve the following steps:

  • Employee provides notice of the injury to his or her employer within a stipulated period of time following the injury;
  • Employee receives prompt medical diagnosis and treatment from plan-approved medical provider;
  • Employer initiates an investigation of the accident and resulting injury(ies);
  • A claim for compensation is filed with the proper administrative agency; and
  • The administrative agency considers the evidence and makes a final decision based on that evidence.

The decision of the administrative agency is usually final if supported by medical evidence presented at the administrative hearing. However, all states have provisions to re-open and modify awards based on changes in an employee's condition.

Find an Attorney

It is advisable for an injured employee to seek legal counsel to ensure that certain evidence such as medical records and other necessary reports are properly submitted and explained at the administrative hearing. This will ensure that the employee's rights and privileges are protected throughout the procedure.

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