What Is Workers Compensation?

how does workmans compensation work

Workers’ Compensation is a kind of social insurance between a worker and his employer which is often mandated by law. Generally, workers’ compensation covers an employee with all, or a portion, of his wages and medical care as a result of work related illness, disability, or injury. Depending on the jurisdiction, workers’ compensation may be the sole remedy an employee has against his employer, or he may be required to elect between workers’ compensation and alternative legal action. This means that if a worker choses to accept worker’s compensation, he cannot sue his employer in connection with his work related injury, illness, or disability. He must pick one or the other. He cannot have both.

Workers’ Compensation, the Public Policy Behind it, and Varieties of Coverage

Workers’ Compensation is broadly understood as insurance coverage for employees that are injured, disabled, or become ill on the job. Coverage may be for single event, such as a machine accident in which a limb may be lost, or a slip and fall resulting in a back injury. Coverage may be for cumulative events or ailments, such as black lung disease, as a result of being deep in coal mines for many years, or even carpal tunnel syndrome, as a result of many years at a keyboard. Workers’ compensation benefits usually amount to compensation equal to or less than the wages earned before the disability, injury, or illness occurred, plus medical expenses. Benefits may last until the employee is able to return to work, or they may continue for the life of the employee, or even the life of his spouse following his death, should the disability be permanent. In some cases coverage will include the costs of retraining an employee to perform a different kind of job task should his injury, illness, or disability prevent him from safely or productively returning to his previous line of work.

Workers’ compensation is usually no fault coverage, depending on your jurisdiction. This means that by opting in to workers’ compensation, as long as there is no grossly negligent, reckless, willful, or intentional behavior involved, the sole remedy for either the employer or the employee in the event of an injury, illness, or disability, is the coverage provided by the workers’ compensation policy or program in place. This means that an employer cannot fire the employee for having an accident or becoming ill, and the employee’s sole compensation is what the workers’ compensation program provides. He cannot sue his employer. However, opting into workers’ compensation does not always prohibit dismissal from employment or lawsuits involving damages for grossly negligent, reckless, willful, or intentional behavior. Nor does it always prohibit legal actions against third parties, such as machine manufacturers, for instance cases where an employee may injure himself while using a machine his employer owns, but the machine was manufactured by a third party. The manufacturer may be liable.

The Public Policy behind Workers’ Compensation

The public policy behind workers’ compensation is the idea that the social costs of an employee’s illness, injury or disability are minimized for all parties involved. Without workers’ compensation, which really is no fault coverage for employees, an employee has only one option for recovery, and that is to sue his employer. If he can be covered by workers’ compensation in exchange for agreeing not to go to court, and no one is blamed or held liable, the theory is everyone benefits. The employee is compensated while he recovers or retools. The employer is not required to bear the costs of a lawsuit, and the taxpayers benefit because the costs of the court system are minimized with respect to employee injury, disability, and illness claims.

Types of Workers’ Compensation Coverage

There are many types of workers’ compensation coverage. Some employees are covered by a general fund that is part of their jurisdiction’s tax basis. Others are covered by private insurance companies that are either regulated or not regulated by statutes and legislation. Some are completely free enterprise, while others are hybrids, such as when coverage is provided by private carriers in a competitive market, but regulated by a labor or insurance department which also maintains a high risk fund. In cases, guilds or labor unions provide coverage for their enrollees and members, and they are funded by guild or union dues.

However, there are exceptions, because what is workers’ compensation varies greatly around the world, and in fact it does not exist in some places. Nevertheless, depending on jurisdiction and the law in place, sometimes a worker can receive workers’ compensation and still sue when there is a good faith argument his employer has been more than negligent, grossly negligent, or has engaged in willful misconduct. And there are cases where workers’ compensation is not mandated by law, but is only supported by it. Meaning that in some jurisdictions workers are not required to be covered, as it is a choice of the employer and employee whether such coverage is provided. In this case it is like an insurance policy the parties fund for the purpose of covering workers in the event of work related injury, illness, or disability. In some places workers’ compensation is solely or partially funded by the jurisdiction’s tax base, in whole or in part, or contributions are made by employers and employees, in whole or in part.

Ancient History of Workers’ Compensation

What is worker’s compensation at its origin? Workers’ compensation has been around since the dawn of man, in one shape or form or another. Even during the time of hunter gatherers, some form of workers’ compensation plan was in place, even if it was quite informal. For instance, should a member of a hunting band be injured or gored by a wooly mammoth or sabre tooth tiger during a hunt, members of the band would feed him and share hides with him and his family while he healed from his wounds. The idea was that all members of the group contributed, and sometimes one of them would suffer illness, injury, or disability while on the job. It was good business to support members when they were down so they could get healthy again and come back to work. This ancient example of hunting tribe members supporting their injured members is a good example of the origins of the idea behind workers’ compensation as we know it today.

European Guilds and English Law and Worker’s Compensation

What is workers’ compensation as we know it, as supported by law and modern society, came to the United States as early as 1911. It was a product of the Industrial Revolution, European Guilds, and the general ideas behind the Enlightenment which supported the idea that every individual had worth. The Industrial Revolution brought about massive factories and big cities, as well as guilds – which were pretty much the original trade unions we know today. Because English Common Law allowed individuals to sue their employers for personal injury, the courts became congested with lawsuits. Because so many factory workers became members of guilds which placed heavy demands on employers in connection with compensation of ill, disabled, or injured employees, amongst other things, there were many work stoppages. So the law stepped in a made a compromise. It introduced workers’ compensation insurance.

What is Workmans’ Compensation?

In most jurisdictions, workmans’ compensation is coverage for you when you suffer a work related injury, illness, or disability. It is often mandated by law, or by contract, that you be covered by your employer or by support from a government agency, insurance company, or by a guild or a trade union pending your recovery, or in some cases for the rest of your life, should your work related disability be severe enough. In some cases, you may be covered even if your disability, illness, or injury is not work related, but that is beyond the scope of this article. In any event, what is workmans’ compensation varies greatly, depending on the jurisdiction you live in, its laws, or whatever agreements you may have in place with your employer, insurance carriers, guilds, or unions. The important thing to know is that if you are injured, disabled, or become ill on the job, you may not be alone. Knowing what is workmans’ compensation and if a form of it is available to you can be invaluable.

How to Make Your Workmans’ Compensation Claim

So, what do you do if you are injured, disabled, or become ill on the job? The answer is not the same for everyone because workmans’ compensation so greatly varies from place to place. Nevertheless, the following will be instructive. First, if you are injured, disabled, or become sick on the job and you are a member of a guild or trade union that has your best interests at heart, you should go to your union steward or union representative and ask them what you must do to make your claim for workman’s compensation benefits. Be sure to ask a lot of questions, starting with what is workmans’ compensation and what does it cover, how much is available to you, does it cover medical costs, and how long can you be on it. Second, if you are not a member of a union or guild, either contact your company’s human resources department or your local department of labor and approach them as suggested with the union or guild steward or representative above. If you are covered by insurance, contact your carrier about making your claim. If all else fails, consult a lawyer or appropriate legal official, or representative with your interests at heart.

How Much Workmans’ Compensation Are You Entitled to Receive?

Unfortunately, there is no standard answer to this question, but generally if you are entitled to benefits, you will receive a portion of your wages for a limited amount of time, plus medical benefits. However, in some cases, there is no limit of time to how long you may collect workmans’ compensation benefits, should you be found to be permanently disabled or incapacitated. In this case, your workmans’ compensation benefits are often treated as disability benefits and you may be moved into a different program. It is not uncommon for disabled workers, upon a determination they will not be able to work again, to be moved from the workmans’ compensation fund to a more general disability fund supported by their jurisdiction’s tax base.

With all this said, you must always double check to make sure you are receiving the maximum workmans’ compensation benefits to which you are entitled. To do this, whether you receive your benefits through your employer, your government, an insurance carrier, a guild, union, or otherwise, always be sure to ask for information on the workmans’ compensation payouts they provide. You may be short changed because it is often in the interest of a fund provider to pay out as little as possible on claims. Always do your homework. Never miss an appeal date after you have received your determination of eligibility or a denial thereof. You may need to consult an attorney or an advocate to argue your case.

What is Workers’ Comp?

If you are like most of the rest of us, you work hard for a living, and going paycheck to paycheck is just a part of life. Making the rent or mortgage payment, buying groceries, putting gas in the car, buying clothes for the kids, and the list goes on and on. Each time the next paycheck comes, you’ve pretty much spent everything you were previously paid. It is just the fact of life. You have your health, your family, and your church, and that is what is important. But, you don’t always have your health. Injury, illness, or disability on the job is always a risk, so if such an unfortunate day ever comes, you should educate yourself now. Don’t put yourself in the position of asking “what is workers’ comp ?” after the fact.

Get prepared now. Learn the facts and make sure your family and friends know what to do in the event you ever suffer illness, injury, or disability on the job. So, we have good news and bad news. Answering the question what is workers comp is easy. It is coverage for you and your family should you become injured, disabled, or ill on the job. How to get workers’ comp is very varied. It depends on where you live, what kind of agreements you have with your employer or insurance providers, and the laws of your jurisdiction. However, the following can help.

Where Do I Go to Get Workers’ Comp?

This is the first question. It varies. However, the first place to go, if you are a member of a union or a guild is to your guild leader, union representative, or steward. Set up a meeting and go speak with them. Start from the beginning. Ask what is workers’ comp? How do you apply for it? What does it cover, and for how long? See if there is any literature on the subject for you to read. You will want to keep copies to share with your family and friends should you ever be so incapacitated they need to apply for you. If you are not a member of a union or guild or such organization, go to your company human resources department and learn all you can about your workers’ comp benefits and coverage from them. Finally, if none of the above sources are helpful, go to your insurance carrier, if you are aware of any coverage you may have, or to your local department of labor or labor board. Start from the beginning wherever you go. Ask what is workers’ comp? Learn all you can.

Form a Workers’ Comp Action Plan

Once you have educated yourself on what to do to apply for workers’ comp in the event of an illness, disability, or injury, write down an action plan for your spouse, friends, and family to follow in the event you are ever hurt or become too ill to apply for workers’ comp on your own. You should list where to go, what to do, and how to do it all, step by step, all in simple terms. Be sure to include contact personnel, phone numbers, and addresses, as well as any application forms you may have to submit. Also, it is very important for everyone to know what to do in the even you are denied coverage, or you are only found to be partially covered. In most cases there is an appeal process everyone, including you, should be well aware of. Most importantly, always keep in mind that workers’ comp appeal deadlines often start to tick away either as soon as you are injured, disabled, or become sick, or upon the moment a determination of the extent of your coverage is made.

What is Workmans’ Comp?

Workmans’ Comp is a means for covering employees who are injured or disabled on the job or become sick on the job. In some cases illness or infirmity may be the result of many years on the job or working within a particular industry. For instance, a coal miner may suffer black lung disease as a result of

having been in the mines for 20 years. His black lung disease didn’t occur as a result of a single incident at work, but several, and in some cases his illness might not even show up until long after he is no longer working in the mines, but at a desk job for the same company. In such cases the distinction between what is workmans’ comp and what is disability may blur. But such is not within the scope of this article.

Here we are talking only about what is workmans’ comp and identifying a number of types of ailments or injuries workmans’ comp may cover. In any event, should you be victim to a work related illness, injury, ailment, or disability, you may be covered by a workmans’ comp policy until you are able to return to work, and in some cases the coverage may be permanent should you not be able to return to work. So if you are injured or become ill as a result of your work related activities, you need to consider applying for workmans’ comp benefits. However, asking what is workmans’ comp is not all you should ask. You should also ask, “What other recourse do I have for covering my injury, illness, or disability?” Why? Because in some cases, should you elect to receive workers’ comp, you are giving up your right to take your case to court!

What is Workmans’ Comp Alternative Remedies?

A lot of severely injured employees never asked what is workmans’ comp before signing on the dotted line and beginning to receive benefits. In error, they thought that all they were doing was getting fair compensation to cover the paycheck they’d no longer be getting, and that a few of their medical bills would be paid. They never imagined taking this course would cause them to suffer a potential denial of any other claims! So, it can happen. By electing to receive workers’ comp, you can effectively sign away all of your rights to sue in court. So, if you are severely injured, you should always consult an attorney before you sign any paperwork connected with workers’ comp. To do so may be to lose your right to seek a full and fair recovery. You may have a case worth a million dollars because that may be the fair cost of making you whole again, but by agreeing to start receiving workmans’ comp benefits, you are giving up everything but the right to receive a biweekly or monthly check that’s only half or less of what you used to be earning. Plus, you may suffer substandard medical care by making the wrong election.

Would Taking Workmans’ Comp Prevent Recovery?

To understand why, especially in cases of severe injuries, accepting workmans’ comp without first consulting an attorney can be to your disadvantage, you have to know why workmans’ comp exists in the first place. It all started, some scholars argue, in England, back during the Industrial Revolution. Cities were growing and the factories were booming. Labor became an important part of the economy. Most people worked for someone, and it was usually in a factory. Lots of people were injured, and English Common Law allowed them to sue their employers for damages when they were injured. Well, there were so many injuries and lawsuits, the courts couldn’t handle all the claims, and the factories were complaining to their politicians about the cost of paying so much for all their employees’ injuries, so workmans’ comp laws came about to save big business money. They essentially reduced the costs of paying for employee claims by making employees take all the risk, by having them pick between a set workers’ compensation payout or going to court and risking getting nothing. So you see, the origins of workers’ comp laws protect courts and employers, not the employees. If you suffer a serious injury, always talk to a lawyer before signing any workmans’ comp papers!

Workmans’ Compensation Pitfalls

Workmans’ compensation is a blessing to many sick, injured, or disabled employees. If you are injured at work, your safety representative takes care of everything. You go to a doctor, your medical bills are covered. You receive compensation while you recover, and your employer is required by law to take you back at work when you are able to return. If you are never able to fully recover, your workmans’ compensation coverage pays for your schooling and training while you learn to perform in a new capacity. So far, so good! You don’t get blamed for anything, and you don’t have to go to court. Everything is taken care of quickly and to everyone’s best advantage. While this is usually the case, it is not always the case. In some cases, workmans’ compensation alone is not enough. Let’s explain with a hypothetical situation.

The Workmans’ Compensation Nightmare Hypothetical

You work in a lumber mill and handling a large power saw is what you’ve done for years. You always inspect the equipment to make sure it is safe, and you always know what to do to fix it. You’ve taken these saws apart and put them back together so many times you can do it all in your sleep. Then, one day the unimaginable happens. While you are sawing, the blade shatters. Fragments shoot right through your safety goggles and you are completely blinded in one eye and partially blinded in another.

You are very upset to suffer such a misfortune, but are happy no one else was hurt. The good news, at least at first, is that after you sign all the workers’ compensation paperwork, all of your medical bills are promptly covered, and within a week you are receiving a check in the mail for 80% of what you used to earn. You heal up over time, but your vision does not recover. You won’t be able to saw again, so the workers’ compensation program sends you to school to learn how to do data entry at the lumber mill. A job with AC will be nice. It will be a nice change of pace. Unfortunately, you soon discover that your new job will only be paying you 50% of what you used to earn. You were willing to live with the blindness because sometimes you just have to adapt. The same week you also read in the newspaper that the saw blade you were using was defective. It has hurt a lot of people. You go to a lawyer and you get good news and bad. You have a claim. You can probably be compensated by suing your employer and the manufacturer. This way you’ll make up for the 50% pay cut and be back on your feet. The bad news is you signed away your right to sue your employer and the manufacturer by signing the workmans’ compensation documents.

Workmans’ Compensation Moral to the Story

If you are ever seriously injured, always consult an attorney before you sign any workmans’ compensation documents. In many cases, by accepting workmans’ compensation after suffering a work related injury, illness, or disability, you give up your rights to sue your employer. In some cases, though it is rare, you can give up your rights to sue third parties. Granted, this is a nightmare situation, as described above, where there is no recourse against an employer or manufacturer once an insufficient workmans’ compensation payout has been made, but it can happen. Don’t let it happen to you. Always consult an attorney if your accident, disability, or illness, has any risk of being inadequately covered by your workmans’ compensation policy!

Workers’ Comp Origins and How it Works

Workers’ comp has been around since the dawn of man. Hunting groups took care of its members and their families when they were injured or killed on the job. It was simply the right thing to do. Even the caveman knew that if he chipped in a little towards the hunting group members’ assistance when they were infirm, ill, disabled, or suffering a wooly mammoth gore or saber tooth slices, should he ever suffer such misfortune, he’d also have comfort while recuperating. He wouldn’t go hungry.

But as society became more complex, such informal ways of taking care of our coworkers changed. When we got to the Industrial Revolution, factories were built everywhere and the rural economies moved to big cities. In Europe, especially England, there really were no adequate means for employees to be covered for injuries, disabilities, or illnesses sustained at work. Not practically speaking, because their only avenue was English Common Law, which required them to take their employer to court. Not many employees working paycheck to paycheck in those dismal conditions could even imagine affording an attorney, even if they were to give up their children as indentured servants. Of course the industrialists of the time still argued that plenty of employees were suing them and it cost too much. The compromise became a workers’ comp system. Employees were insured, on a no fault basis, for injuries and illnesses sustained at work, so long as they didn’t take their employers to court. The result was neither party had to worry about the agony, cost, or gamble of the court system. No one would be blamed. Workers would keep their jobs or be retrained for new ones.

How Workers’ Comp Works

Without getting into the detail of where workers’ comp is regulated or how it is funded, we’ll just discuss a few basics, as they apply to workers with claims. Generally, an employee is covered by his employer either through an insurance company, government involvement/funding, or the employer pays all the costs via what is commonly known as “self-funded” program. When an employee is hurt, so long as both the employee and employer opt into the workers’ comp program in place, the law says the employee cannot be fired or blamed for what happened, and the employer cannot be sued. The employee goes to the doctor for a medical report and treatment, the employer and the employee and the witnesses put the claim together, and it is submitted to the carrier or the fund trustee. The claim is either accepted or denied, and if denied the employee can usually appeal. If the claim is accepted, the employee’s medical expenses are covered and he is compensated in whole or in part for his lost wages. If required, he may go on permanent disability, or be retrained to work at a job he is more suited for given his permanent medical condition.

When Worker’s Comp is Not Sufficient

Keep in mind, by accepting workers’ comp you are usually agreeing not to ever sue your employer. This means that when you sign on the dotted line, you can never get anything more than partial wage payments for a limited amount of time, or an even more reduced permanent disability coverage package. Usually your ordinary medical expenses and retraining are covered. However, sometimes all of this is not nearly enough. What if you lose a limb? What if you have ongoing psychological problems? What if your workers’ comp program simply does not cover enough to put you back where you would have been had the accident or illness never occurred? This is why whenever your injuries or illness are serious, long term, or you are likely to never fully recover, you should always consult an attorney before signing on the dotted line.

Workmans’ Comp Doesn’t Always Pay the Full Bill – it is a Compromise

Workmans’ comp does not always fully protect you. This is because it is essentially an insurance policy some argue keeps employers’ costs down by guaranteeing employees a certain amount of coverage whenever they are injured, disabled, or become sick on the job. In return for this workmans’ comp coverage, the employee is prohibited from taking his employer to court. In most cases, workmans’ comp works like a charm. An employee slips and falls at work, he sprains his ankle, he’s out for two weeks, and he gets a check for 60% of what he would have earned had he been able to work.

But do you see the math? He gets only 60% of what he would have earned. What is happening is the employee is essentially agreeing with the employer that he won’t take his slip and fall to court to recover his full pay, so long as both the employer and employee agree no one is at fault. 60% of wages are paid, the employee comes back to work when his ankle is healed, and business continues as normal. To be fair, 60% is a pretty good deal if the employee was negligent and caused his own fall, but if his injury was due to dangerous conditions created by his employer, then the story changes a little bit more. What is fair becomes more blurred, especially to the employee.

When to Reject Workmans’ Comp and Sue?

Every employee injury, illness, or disability is different. Each differs in severity. A claim can be as small as a sprained ankle, or as serious as a lost eye or limb. In some cases there is a permanent disability and in others you never know if an injury is fully healed. For instance head wound symptoms can occur decades after the fact. Some injuries occur over a long period of time, or require many exposures, such as employees working twenty years in a mine, or with asbestos. This is why whenever you suffer a serious work related illness, disability, or an injury that may linger in any way, you need to talk to an attorney before you sign any workmans’ comp paperwork. It is just the wise thing to do. Can you imagine becoming permanently disabled and not being able to sue for your work related injuries because you accepted six months of compensation at 60% of your base pay? It can happen. Sometimes workmans’ comp is simply not enough. In many ways, workmans’ comp is just a means to reduce an employer’s overall and long term liability by giving you a guaranteed potential underpayment today.

When You Do Opt into Receiving Workmans’ Comp and are Cheated

Let’s face it, in most cases injuries, illness, or disability suffered at work are minor, and it probably is a good compromise to take the workmans’ comp offered, even if it means you may get only 50% of your pay for a while. You never know what you will get if you take a case to court, and you never know how long it will take. Plus, you have no guarantee of winning. The good news is that even though it is often in the best interest of your employer and his carrier to undercompensate you, you usually have an appeal process available. This process greatly varies from jurisdiction, so just be wary. If you do opt into workmans’ comp, be very aware of your appeal deadlines and how to make your appeals should you receive an unfair claim determination, have your benefits cut short, or be denied fair coverage of medical bills, or even the right to be retrained should you feel you will never recover fully enough to return to your old line of work.

Source: www.what-is-workers-compensation.com

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