Workers' Compensation Benefits

April 13, 2006

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Common elements. Here are some common elements shared by the state workers' compensation laws:

Benefits are provided for accidental job-related injury — an employee is entitled to statutory benefits from you when the individual suffers a "personal injury by accident arising out of and in the course of employment."
Benefits include wage-loss, medical, and death benefits — wage-loss benefits usually cover about one-half to two-thirds of the employee's average weekly wage.
Covered "employees" are defined by law — "employees" generally does not include independent contractors.
Fault is generally not an issue — neither the employee's own negligence in causing the accident nor your complete lack of fault are factors in deciding whether the worker gets benefits.
Employees give up the right to sue you — in exchange for the assured benefits, employees give up their right to sue you for any injury covered by workers' compensation laws.
Employees retain the right to sue negligent third parties — if a third party's negligence helped cause the accident, the employee can still sue the third party; any proceeds from the suit should be first applied to reimburse you for benefits paid to the employee.
The system is administered by a state agency — the responsibility for administering the system is placed in the hands of a state agency.
Most employers are required to participate — except in Texas, which has a voluntary system.

You should remember that workers' compensation benefits are payable only for work-related injuries. Benefits are not available for self-inflicted injuries or for those caused by intoxication or substance abuse. The payable benefits include:

income replacement for partial or total disability of a temporary or permanent nature
medical and rehabilitation costs
survivor benefits in the case of a fatal illness or injury

In addition, coverage is provided for certain occupational diseases that are set out in the state laws.