Workers' Compensation

Overview

The workers' compensation system attempts to streamline the process for handling work-related injuries and illnesses. The system generally provides fixed remedies to employees suffering from work-related injuries without requiring the employee to prove fault, thereby minimizing the need for litigation and its associated costs. Benefits from workers' compensation insurance may include medical care, temporary disability benefits, permanent disability benefits, vocational rehabilitation, and death benefits.

Most states require employers to carry workers' compensation insurance so that their employees will be compensated in the event that they are injured or become ill in the course of or due to their employment. Employers may purchase workers' compensation insurance from a private insurance company or a state-run workers' compensation insurance fund, if available. Some states also permit certain employers to self-insure for such claims. A minority of states do not require workers' compensation coverage by employers with fewer than a designated number of employees.

Workers' compensation insurance covers most on-the-job injuries, even those diseases and illnesses that result gradually from working conditions. Coverage may apply to pre-existing conditions as well if a subsequent work-related injury aggravated the condition. Workers' compensation also covers injuries caused by an employee's own carelessness; however, some exceptions exist. For instance, if the employee's injury is self-inflicted or caused because the employee is under the influence of alcohol or illegal substances, benefits may be denied.

Although the workers' compensation system limits the liability for employers and often for fellow employees, injured employees may bring claims against other parties responsible for their injuries. For instance, an employee may choose to sue the manufacturer or supplier of a toxic substance, such as asbestos or lead, or the owner of the premises where the injury occurred. If the injury was intentionally or recklessly caused by the employer, the employee may avoid the Workers' Compensation system and bring claims in court against the employer.

While state law generally governs workers' compensation, some exceptions exist where federal statutes apply. For instance, the Federal Employment Compensation Act covers most federal employees and certain private maritime employees receive protection under the Longshore and Harbor Workers' Compensation Act.