Workers’ compensation programs are a vital lifeline for workers who become ill or injured while on the job. However, while every American worker knows what workers’ comp is, many of us never give a second thought to how it actually works. If you are a small business owner, or you are planning on starting a business, here’s what you need to know about workers’ compensation.
Workers’ comp is Required for All Employers
All employers in the United States are provided with some kind of workers’ compensation program. However, the exact nature of the program and the type of coverage that it offers varies considerably from state to state. Two employees who work the same job for the same business in different states might have different coverage under workers’ compensation.
Among the aspects that vary from state to state are:
- The type of workers who are covered
- The types of injury that are excluded
- The statute of limitations
- The types of defenses that employers may use
Workers’ comp Covers Both Short and Long-Term Illness and Injury
Most of us are fortunate enough to work at jobs that present us with little danger in our day-to-day lives. However, there are also plenty of jobs where some degree of danger is accepted or expected. In either case, an unexpected illness or injury can have huge ramifications for a person’s professional life.
Workers’ compensation is designed to help employees who are unable to work by replacing their wages with workers’ compensation payments for a time. Workers’ comp programs can also help employees to cover their medical costs and any vocational rehabilitation programs that will help them get back to work.
Employers Pay Into a State Fund
Workers’ compensation programs are administered by individual states, with the federal government also operating their own program for specific groups of workers. Specifically, longshore workers, coal miners, and general federal employees are all covered by the federal workers’ comp program.
The cost of workers’ comp programs is calculated by the ‘type’ of employer. The gross payroll for each type of employer and the frequency and severity of all injuries and illnesses their employees have claimed for are both used to determine workers’ compensation costs by industry.
When an employee claims workers’ compensation, many businesses understandably want to see the medical evidence. However, some businesses push their employees to see a company doctor to assess their workers’ compensation claims. These company doctors have a vested interest in minimizing a patient’s suffering. Judges and arbitrators who listen to appeals are less likely to trust the opinion of a doctor with vested interests. You can find out more about what happens if a doctor finds there’s nothing wrong with an employee.
Not all Workplace Injuries are Covered
While workers’ compensation is designed to provide a safety net for all types of worker, there is also a range of injuries that are not covered by a workers’ comp program. For example, injuries that are self-inflicted are not covered by workers’ comp. Similarly, an injury sustained while committing a crime, violating company policy or not on the job is not covered.
Starting a business is never easy. There’s always going to be a lot to learn and all the new information can quickly become overwhelming. Make sure that you fully understand workers’ comp and how it works before you start hiring.