What is Workers' Compensation?

Each state has its own workers' compensation to handle claims from employees who are injured on the job. These laws are strict liability - fault and negligence by the employer need not be established in order to collect benefits. However, the injury or illness has to be incurred in the course of employment in order for the workers' compensation system to provide benefits to the injured worker. Since workers' compensation law imposes strict liability on employers, it is the exclusive remedy for an employee's injuries or illnesses arising out of the course of employment.

Workers' compensation insurance is typically required by the state for every employee - although state law may provide for specific exemptions for officers/owners, small companies (those with three/four/five or fewer employees), domestic workers, farm hands, and independent contractors.

What type of occupational exposures are covered by worker's compensation?

injured workerWorkers' Compensation systems provide benefits to those workers who suffer immediate and long term effects of occupational exposures. The exposure may have occurred recently or have occurred many years previously. Individuals are able to seek benefits for occupational exposure to toxic substances at work including asbestos, lead, latex and many other chemicals. Employees may seek benefits for: repetitive stress disorders, i.e.. carpal tunnel syndrome; occupational exposure to loud noise, i.e.. binaural hearing loss; cardiovascular disorders, i.e.. myocardial infarctions, and hostile work environments, i.e.. psychiatric and possible physical disorders.

There are three major components to workers' compensation:

  1. Medical Expense - the cost for hospitals, doctors, medical treatment, etc.
  2. Disability Pay - either temporary while you are getting back to normal, or permanent if you will never fully recover. The amount varies, but can be as high as one-half to two-thirds of your normal pay.
  3. Vocational Rehabilitation - if your injury renders you unable to perform the usual duties of your occupation, you may need re-training so that you can enter into a new trade or business. Also, you may need physical therapy to get your normal strength back.

Since workers' compensation imposes strict liability without inquiry into fault, an employer could be penalized where its conduct was egregious - violation of federal or state safety standards, failure to correct known defects or other conduct - situations where there is a need to punish and deter such conduct in the future.