Workers' Compensation

Workers’ compensation is a type of insurance that employers pay to cover the costs of benefits for employees who sustain injuries or illness on the job. The following are some important facts about workers’ compensation:


Fact 1: States Are In Charge of Workers’ Compensation Systems

Employers are under obligation to self-insure or contribute to state workers’ compensation funds. Workers who sustain illness or injury on the job may then receive compensation. Longshore workers, federal employees, and coal miners are among the categories of distinct worker’s compensation programs under the federal government.

In addition, workers’ compensation premiums are not paid by the employees. Although each state has a workers’ compensation program, each has its own set of rules.


Fact 2: All Employers Must Provide Workers’ Compensation

Although this statement is fundamentally correct, each state’s degree and type of coverage differs, and one state does not mandate this coverage. In addition, employees, as defined by the state, as well as “any person appointed or employed for remuneration by private employers,” including independent contractors, must be covered. Furthermore, some non-employees may qualify for a workers’ compensation exemption.


Fact 3: Workers’ Compensation Coverage Can Be Self-Insured in Most States

Each state that allows companies to self-insure for workers’ compensation has its own set of requirements to meet. Certain persons, such as independent contractors, are free from workers’ compensation regulations in some jurisdictions.


Fact 4: Those WIth Long-Term Injuries or Illnesses Can Receive Coverage Under Workers’ Compensation 

Workers’ compensation benefits replace lost income and pay for medical care. In addition, they will provide vocational rehabilitation programs so that employees can return to work.


Fact 5: Workers’ Compensation Premiums are Determined by State Rates and the History of an Individual Business

Workers’ compensation rates differ by state and by kind of company. A report comparing workers compensation insurance for restaurants rates by state and employer categorization is released every two years by the Premium Rate Ranking Survey. The cost of workers’ compensation payments to an individual employer is determined by their gross payroll as well as the severity and quantity of injuries and illnesses they suffer.


Fact 6: Employees May be Able to Sue Their Employer If They Are Injured on the Job

Worker’s compensation payouts normally preclude employee lawsuits against their employers. However, there are some scenarios in which an employee can sue their employer for an on-the-job accident or illness. One such situation would be if the injury occurred beyond the limits of the worker’s job assignment. Another would be if the injury was intentional by the employer.


Fact 7: Workplace Injuries Are Not Always Covered by Workers’ Compensation

Some job injuries, on the other hand, do not fall under worker’s compensation. Therefore, they do not receive reimbursement by worker’s compensation. Some of these are: 

  • If the injury was caused by you
  • If the injury occurred while the employee was on the job, 
  • if the employee broke business rules
  • if the employee was not on the job
  • Workers’ compensation does not include claims for suffering, pain, or carelessness


Fact 8: Employees May Not Receive Unfair Treatment After Filing a Workers’ Compensation Claim

Employers are forbidden from retaliating against, terminating, or otherwise discriminating against employees who submit worker’s compensation claims under state and federal whistleblower statutes.


Fact 9: False Claims for Workers’ Compensation Can Result in Penalties and Hefty Fines

Employers generally commit workers’ compensation fraud to lower premiums. Businesses commonly commit workers’ compensation fraud in the following ways:

  • Misclassifying workers as non-employees or owners. 
  • Failing to report the number of employees.


Employees who defraud workers’ compensation include:

  • Falsely alleging an injury 
  • Receiving both Social Security disability benefits and workers’ compensation at the same time. 


Fact 10: Employers Must File Reports, Keep Records, and Provide Information to Employees

Workers’ compensation information must be reported to employees. In addition, employers must report to the state agency. Employers must, in general:

  • Post compensational information to employees in strategic locations.
  • Keep track of lost time injuries and occupational diseases.
  • Report accidents or injuries.


Understanding these workers’ compensation facts will help you best protect yourself, your business, your employees, and your financial interests.