Workers’ compensation or workers’ comp is a benefit program by the government for workers who fall ill or sustain an injury on the job. It provides financial and healthcare benefits to workers who sustain injuries or health concerns due to their job.
Individual states handle this law in the United States, so the benefits one can avail can differ significantly for each state. For instance, Texas is the only state without mandatory workers’ compensation insurance.
Workers’ compensation offers various benefits, such as reimbursement for occupational therapy and healthcare services and partial wage replacement. There is a state agency for every state called the Workers’ Compensation Board that supervises the program and steps in if there is a dispute.
There are federal programs, such as the Black Lung Program associated with death and disability benefits for coal miners and their families. Some federal workers’ comp programs cover federal employees, energy employees, and harbor and longshore workers.
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What Does A Workers’ Compensation Program Do?
As mentioned above, it varies from state to state, with some states not covering all employees. For example, a state may not mandate small businesses for coverage. Learn more about state-by-state workers’ comp law comparison here.
Salary Replacement
Employees receiving salary replacement under this law will get less than their full salary. The best pay is approximately two-thirds of the individual’s gross salary.
At the state or federal level, workers’ compensation benefits may not be taxable, which compensates for much of the income lost. An employee may be taxed if they benefit from the Social Security Disability or Supplemental Security Income programs.
Healthcare Cost Reimbursement
In most cases, the compensation program covers only the medical expenses associated with injuries resulting from a job, like a coal miner can claim compensation for injuries suffered from falling debris inside a mine but not for an accident that occurred when they were walking to the job site from home.
Survivor Benefits
Workers can receive a payment equal to their sick pay when on medical leave. If they lose their life because of a work-related incident, the compensation goes to their dependents.
Compensation Recipients Renounce The Right To Sue
Workers waive the right to sue their employers for any form of negligence when they agree to receive workers’ compensation.
It is beneficial for both parties because workers ensure receiving compensation by compromising the power to sue their employers. On the other hand, the employers consent to liability while preventing the occurrence of a negligence lawsuit that would cost them more.
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Who Pays The Workers’ Compensation Insurance Premiums?
The law requires the employer to pay workers’ compensation premiums, depending on their state laws. There is no payroll deduction. The insurance cost and benefits vary from state to state. The rates may also differ based on whether the employees covered perform high-risk or low-risk jobs.
The insurance fees depend on the company’s payroll numbers. For example, workers’ compensation in California costs 40 cents for every $100 on average in payroll for low-risk workers; for high-risk jobs, it is $33.57.
How To Apply For Workers’ Compensation?
Different states have different rules. However, a general way to apply for this program if you sustained a job-related illness or injury is to:
1.Write down the injury or illness details; add photos, names of witnesses, and all other details.
2.Report injuries or illnesses to your employer and they should take it from there.
The employer should file the claim. You can inquire about their insurance company to ensure your claim was filed. In case the claim is denied, you have the right to appeal to your state’s Workers’ Compensation Board.
Note: This compensation program is only available to salaried employees
Final Words
Every state writes its rules and regulations. Hence, you may experience exemptions and exceptions. Some states exclude specific professions from the program, some limit the benefits, and most rarely cover contractors and freelancers. So, consult a reputable workers’ compensation lawyer to understand what you can expect from the Workers’ Comp program.
