If you get injured on the job, workers' compensation can help ensure that you still receive pay and other benefits from your employer. In this comprehensive guide to workers' compensation, you'll learn about what workers' comp is, who is covered by it, how much you can expect to receive, what types of workers' compensation exist, what workers' compensation covers and the process for filing a claim.
What Is Workers' Compensation?
Also called workers' comp or workman's compensation, workers' compensation is a form of insurance that the government requires employers to provide to their employees. Workers' compensation provides wage and medical benefits to employees who become injured, ill or disabled while at work.
According to Nationwide, workers' comp "is considered a social insurance because it relies on a social contract between management and labor, wherein exchange for purchasing workers' compensation insurance, business owners are protected from civil suits from their workers who become injured on the job."
Workers' compensation benefits are determined state by state. While there is also a federal workers' compensation program, it is primarily for federal employees. According to the U.S. Department of Labor, the Office of Workers' Compensation Programs provides injured federal workers with benefits for wage replacement, medical treatment and vocational rehabilitation, as well as other benefits.
Who Is and Isn't Covered by Workers' Comp?
Not every person who works is entitled to workers' compensation. While most employees at private companies or who are state or government employees can receive coverage, some states have designated specific categories of workers who are exempt from coverage.
According to Workplace Fairness, these may include but aren't limited to:
-- Independent contractors.
-- Seasonal workers.
-- Domestic employees.
-- Agricultural employees.
How Much Can You Expect to Receive from Workers' Comp?
Since workers' comp coverage is state mandated, the amount of compensation and specific benefits you receive will depend on which state you live and work in. Each state determines its own worker's compensation benefits, so payouts for similar injuries may be different from state to state.
For example, NPR noted the major discrepancy between two workers who sustained almost identical injuries yet received vastly different payouts from workers' compensation because they lived in different states. One received $45,000 from his workers' comp claim, while the other received lifetime benefits of around $740,000.
[READ: 5 Job Hunting Tips.]
Types of Workers' Compensation
According to The Balance Small Business, in addition to helping replace some lost wages "until the worker has fully recovered from the injury," there are four types of legally mandated workers' compensation benefits: medical, disability, rehabilitation and death benefits.
While the exact coverage for each of these benefit types varies by state, medical benefits can cover a wide variety of fees that may be charged for various medical treatments and care, such as doctor visits, diagnostic testing, hospital treatment, medication, physical therapy and certain types of medical equipment such as wheelchairs.
Disability benefits are classified based on how serious or permanent the injury or disability is. When workers can't return to their previous job because of an injury they experienced at work, most states offer some vocational or psychological rehab. And in the worst case where an employee's death is from an injury or illness sustained at work, the employee's spouse or dependents will receive death benefits from workers' comp that can, among other things, help cover the cost of a funeral.
What Does and Doesn't Workers' Comp Cover?
Workers' compensation only covers injuries that happen at and during work, not while you are off-duty. The workers' compensation laws in your state may also offer coverage for long-term conditions and illnesses that develop at work, including repetitive stress injuries such as carpal tunnel syndrome, chronic back pain, occupational diseases such as digestion problems related to work stress and infectious illnesses contracted at work such as COVID-19.
Workers' comp doesn't cover every type of workplace injury or illness; certain situations and conditions may render your claim ineligible. In particular, if you become injured due to any of the following reasons, you may be denied workers' compensation coverage:
-- Drinking alcoholic beverages.
-- Using illegal drugs.
-- Starting a fight.
-- Self-inflicted injuries.
-- Conduct that went against a written company policy.
Process for Filing a Claim
Even if you have a legitimate workers' comp claim, you must be sure to follow the correct process for your state in order to receive benefits.
To file a worker's comp claim, employers and employees each must take certain steps after a workplace injury occurs. Employees have the responsibility to notify their employer with details about the injury, noting the date and time it occurred, where and how it happened and what type of injury it is. Employees must also file a formal workers' comp claim. Employers are responsible for providing the affected employee with workers' compensation paperwork, providing guidance and filing a claim with the insurer, following their state's law for reporting on-the-job injuries.