Workers’ compensation is designed to provide income replacement and coverage of medical expenses for employees who are injured on the job. Presently workers’ compensation is a quid pro quo system under which the employee gives up the right to sue the employer for injuries from work-related accidents in exchange for receiving benefits without regard to fault. If the injury is related to the employment, it does not matter who caused the injury; the employee is awarded benefits. At the same time, benefits provided by workers’ compensation are the employee’s exclusive remedy for redress of his or her work-related injury, meaning that the employee is prohibited from seeking tort damages against the employer in civil court.
Workers’ compensation provides disability benefits (wage replacement) to employees who are injured on the job or who become temporarily or permanently disabled due to an on-the-job injury or to illness. This benefit is funded by employers in any one of three ways:
- state insurance funds, which are created and maintained by employer premium payments that are geared in amount to the risk involved;
- employers who act as self-insurers; or
- employers who contract with an approved private insurance company.Workers’ compensation insurance premiums are based on the accident history of a company.
How do workers’ compensation laws work?
- Benefits are provided for accidental injury.
- Benefits include wage-loss, medical and death benefits.
- Covered employees are defined by law.
- Fault is not generally an issue.
- Employees give up the right to sue their employer.
- Employees retain the right to sue negligent third parties.
- State agency administers the system.
- Employers are required to be insured.
The employer is required to insure its liability through private insurance, state insurance funds (in some states) or self-insurance, and the cost of providing coverage is passed on to the consumer in the price of the product.
How can workers’ compensation costs be avoided?
Besides the incalculable cost of pain and grief, there are very high monetary costs attached to these statistics-lost production, wages paid to sick and disabled workers, wages paid to employees that must substitute for sick and disabled workers, damaged equipment, insurance claims, and administrative and recordkeeping costs.
Both humanitarian desires and economic good sense have encouraged employers to create and maintain safer and healthier working environments. Where employers have not gone far enough, employees, unions and government agencies have applied pressure for greater efforts.
Take a microscopic view of the workplace.
Workers’ comp litigation can be reduced by keeping safety in mind.
Develop a safety-first culture.
Develop a workers’ compensation team.
Set up a special task force to address safety and workers’ compensation issues.
Review your workers’ compensation treatment program.
Don’t cut safety programs.
Reexamine company and management attitudes toward injured employees.