How Does Workers Compensation Work?


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Every state, plus the federal government, has a workers’ compensation law that requires employers to provide certain types of insurance benefits for their employees who were injured in the course of their employment. Workers’ compensation laws and procedures differ from state to state, but this article will discuss the general rules.

Who is Eligible for Workers’ Compensation Benefits?

In order to qualify for workers’ compensation benefits, you must be an “employee,” with two limited exceptions. Crewmembers on vessels and interstate railroad workers are ineligible for workers’ compensation benefits. If those types of employees get injured on the job, federal law requires them to sue their employers instead of receiving workers’ compensation benefits. For most other workers, their eligibility for workers’ compensation benefits is based on whether they are employees or independent contractors.

The Difference Between An Employee and an Independent Contractor

An employee is someone who works for another person or company, and who is not an independent contractor. So what is the difference? There are a number of factors to consider in determining the difference, but, in general, an employee is a worker who:

  • works under the direction and control of the employer
  • performs the regular business of the employer
  • uses the employer’s tools
  • has a long term position with the employer, and
  • has taxes taken out of his/her pay by the employer.

An independent contractor is the opposite. He/she uses his/her own tools, does not have taxes taken out by the employer, may be hired for only one job, is not necessarily performing the employer’s regular business, and is often highly skilled.

An important distinction between the two is who controls the details of the work. An employer has the authority to tell an employee exactly to perform every step of the job. In contrast, the employer does not have the power to tell an independent contractor how to perform the job. A good example is a plumber or an electrician. When you hire a plumber or an electrician, you tell them what you want them to do (i.e., fix a leak or your wiring), but you do not tell them how to fix the leak or the wiring.

Does My Injury Have To Be My Employer’s Fault For Me To Receive Workers’ Compensation?

Workers’ compensation has nothing to do with fault. You are entitled to receive workers’ compensation benefits if your injury was your fault, your employer’s fault, or nobody’s fault.

Can I Sue My Employer if I Get Hurt At Work?

No, the workers’ compensation system is an injured employee’s sole remedy against his/her employer with respect to his/her injury. You cannot sue your employer for damages for your injury.

What Happens If My Injury Did Not Happen On My Employer’s Premises?

The injury need not occur on the employer’s premises. You are entitled to workers’ compensation benefits as long as you are injured while in the course of your employment. Many types of work-related activities take place away from your employer’s office or factory, such as:

  • deliveries
  • business meetings
  • work-related education

Travel to and from business meetings and work-related education is also considered to be in the course of one’s employment. An injury at a company picnic or recreational event can even be covered by workers’ compensation, depending on the nature of the event.

Injuries Not Covered By Workers’ Compensation

An injury that occurs while you are traveling to and from your regular place of employment is not generally covered under workers’ compensation. Also, not all injuries that occur during work-related business travel will be covered under workers’ compensation. If, for example, you get injured while sightseeing or doing other non-business related activities during a business trip, that injury will generally not be covered.

What If Your Employer Doesn’t Have Workers’ Compensation Insurance?

All employers are required to have either workers’ compensation insurance or be self-insured. If your employer does not have insurance and is not self-insured, you may generally take one or even both of the following actions:

  • you can sue your employer (that is about the only exception to the rule that you cannot sue your employer for a work related injury), or
  • you can file a workers’ compensation claim with your state’s special fund for handling uninsured workers’ compensation claims (if your state has such a fund).

If you get hurt at work, and your employer does not have workers’ compensation insurance, you should contact a workers’ compensation lawyer.

What Types of Benefits do Workers’ Compensation Laws Provide?

Although every state’s law is a little different, workers’ compensation laws generally provide injured employees with the following types of benefits:

Injured employees are not entitled to workers’ compensation benefits for pain and suffering.

 

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