Workers' compensation laws provide cash benefits to eligible employees when an employee has a work related injury and is unable to work and incurs expenses for medical care. Generally, an employee is entitled to workers' compensation benefits for injuries that occur on the job regardless of any fault on the part of either the employee or the employer.
Coverage Varies under State Laws
State laws vary as to what kinds of activities and what types of employees are covered under workers' compensation. Some states exclude contractors and consultants, volunteer workers, farm workers, domestic servants and certain other groups. States also enforce different rules about whether part-time employees qualify for benefits.
There are different state rules regarding how much coverage an employer must buy, what percentage of an injured employee's wages an employer must pay if they are unable to work and how long a company must cover an injured employee.
Benefits Paid
Benefits include:
- Payments for lost wages based on disability
- Payment of hospital and medical expenses regardless of wage loss or disability
- Death Benefits
The majority of states have provisions enumerating a schedule of payments for certain permanent bodily impairments or loss of a body part or physical sense. Some states also have laws increasing benefits for successive disabilities, to reflect the total effect of two or more successive injuries. Wage-loss benefits usually cover about one-half to two-thirds of the employee's average weekly wage.
Medical and hospital benefits are provided by all states. This category of payment also covers necessary incidentals such as transportation, equipment and special nursing care.
When there is a fatal illness or injury, survivor benefits are paid to dependents based on limits set in state law.
Permanent Restrictions
If there are permanent restrictions, an employer usually must offer the employee a replacement job, if there is one available, within the restrictions of what the employee is able to do. If there are no such jobs, there is no guarantee of future employment with the employer.
Exclusive Remedy
For covered employees, workers' compensation is the exclusive remedy against one's employer, which means that employees give up the right to sue their employers in exchange for the assured benefits. Some states have an exception to this rule where employer misconduct is present, which allows the employee to sue the employer or sometimes receive increased benefits.
In some cases an employee may file a lawsuit against another party other than the employer if that party's negligence helped cause the accident. For example, an employee could sue the manufacturer of a dangerous machine or the driver of another vehicle that caused the accident injuring the employee. Any proceeds from the suit are first applied to reimburse the employer for benefits paid to the employee.
Procedures for Processing Claims and Reviewing Awards
The procedures for administering and processing employee compensation claims are informal and have been designed to avoid cumbersome technicalities and rules. Generally, the steps involved are:
- The employee gives notice of the injury to his or her employer within a short period of time after the injury
- The employer provides a prompt medical diagnosis and treatment and initiates an investigation of the facts surrounding the injury
- The compensation claim is filed with an administrative agency
- The administrative agency considers the evidence and makes a final decision
The decision of the administrative agency is final if supported by evidence and is based on what is in the employee's file and the evidence presented at an administrative hearing. However, all states have provisions for reopening and modifying awards to reflect changes in an employee's condition.
The employee's lawyer will make sure that the employee's medical records and any other necessary reports (such as a vocational rehab reports) get into the employee's file and are explained to the administrative hearings judge.