Are you an employer and wondering how workers’ compensation works? We can help you out. Read on to learn all about the basics!
In the United States, there are more than 150 million people who are employed. With so many types of workers out there, it can be challenging to understand your role as an employer.
But the real question is this: How does workers’ compensation work?
Workers’ Compensation Occurs at the State Level
Workers’ compensation tax is administered at the state level through funds or self-insurance. These benefits are then paid out to the workers who become injured or ill while on the job.
Separately, the federal government manages workers’ compensation programs for more specific groups such as the following:
- Federal employees
- Coal miners
- Longshore workers
It is important to note employees do not give money toward workers’ compensation premiums.
What Workers’ Compensation Covers
The purpose of workers’ compensation is to replace workers’ wages in the event of time off due to an incident, long-term illness, or injury. This includes things such as the following:
- Death benefits for dependents and spouse
- Psychological counseling and rehabilitation
- Disability payments
- Medical consideration
Long-term injuries, such as carpal tunnel, are also considered workplace injuries, and they might be covered by workers’ compensation.
Workers’ Compensation Is Mandatory for All Employers
If you are an employer, you are required to pay workers’ compensation on some level, including for independent contractors.
Be aware of the statutes of limitations. This cites the effected employee has a set amount of time to file a claim. Learn more about the answer to the question “How do I report a work injury?”
Remember, reporting the claim and filing the workers’ compensation claim are two separate entities. The time deadlines for workers’ compensation claims depend on the state you live in.
Employers Have to Keep File Reports and Provide Information to Employees
It’s important to understand the answer to the question “How does workmans’ comp work?” especially as an employer. Employers have to keep file reports and records, and they must provide information to employees as to how workers’ comp works.
In most states, employers must have a notice to all employees displayed at specific places informing employees how workers’ comp works. Employers must keep a record or occupational disease, lost time injuries, and other accident reports.
It is against both state and federal law to retaliate, discriminate, or fire employees who file a workers’ compensation claim. Remember some incidents are outside the extent of workers’ compensation, such as the following:
- Self-inflicted injury
- Violations of company policy
- Criminal actions
Be sure to clearly communicate all expectations and rules to employees when they are hired.
Final Thoughts on How Workers’ Compensation Works
If you’re an employer and wondering how workers’ compensation works, be sure to do your research ahead of time. Remember to effectively communicate with your employees how the process works as well.
You’ve got this!
