Workers Compensation

All state Workers Compensation laws incorporate four categories of benefits: disability (or loss of income) benefits, medical benefits, survivor (or death) benefits, and rehabilitation benefits. Let's look at each category.

Disability benefits provide compensation for the loss of income or earning capacity suffered by an individual who's injured in his or her occupation. How and in what amounts benefits are paid depend upon the severity and permanency of the injury. Payments can be made on a weekly- or lump-sum basis, or some combination of the two. For example, an employee temporarily unable to work due to a broken leg would most likely receive a weekly payment based on a percentage of his or her regular wages, subject to an upper limit. On the other hand, a worker who suffers a permanent loss, such as the amputation of a limb, would probably receive a lump-sum payment based on a predetermined schedule in the particular state's Workers Compensation law.

Medical benefits compensate for the cost of medical treatment resulting from a job-related injury. In most cases, Workers Comp pays for the full cost of the treatment.

Survivor benefits attempt to recompense the widowed spouse or other survivor of an employee whose death results from a work-related injury. The amount of the benefit would depend upon the deceased employee's earnings (subject to fixed minimum and maximum amounts), and the number of surviving dependents. A fixed amount is also available for burial expenses. Benefits would normally continue until the surviving spouse remarries or until the children reach adulthood.

Rehabilitation benefits are not specifically named in some state Workers Compensation laws. Nevertheless, rehabilitation is provided in every state since all accept the provisions of the federal Vocational Rehabilitation Act, which provides federal aid toward the benefit costs incurred.

To be considered 'compensable' as determined in Workers Compensation law, an injury must meet three basic criteria: it must be accidental, it must arise due to the individual's employment, and it must occur in the course of the individual's employment. Of course, accidental means that the injury was not intended to happen as far as the injured person is concerned. For example, getting hurt while falling from a loading dock would meet the criteria; however, injury resulting from deliberately jumping from the loading dock would not be covered.

Additionally, the employment must be the source of the accident. For instance, if a welder is injured while welding on the job, then the injury is compensable – if the third stipulation is also met; namely, that the injury arose in the course of employment. The time, place, and circumstances of the accident are important in determining whether it resulted from the employment or not. Again, if the welder were injured while welding at his place of employment, but the injury occurred after hours while doing something for his or her own personal use, the injury would not be compensable.

All states also mandate Workers Comp benefits for occupational diseases; in most states they're eligible for the same compensation that applies to occupational injuries. However, in order to qualify under Workers Compensation law, the disease must arise from employment and also be attributable to causes or conditions characteristic of and peculiar to the particular employment, trade, occupation, or process. This requirement of peculiarity to a particular employment means that Workers Comp coverage doesn't apply for ordinary diseases to which the general public may be exposed.

It's possible that an employee could contract a disease that arises from and in the course of employment but is not an occupational disease. For example, a heart attack, ulcers, or alcoholism are not considered to be occupational diseases, yet employment may have played a significant part in inducing any of them. Individual states treat this type of situation differently; some may award compensation and others may not.

Under Workers Compensation law, there are four types of disability: permanent total, permanent partial, temporary total, and temporary partial. The difference between permanent and temporary is as simple as their definitions – the disability will either last forever or it won't. However, the difference between total and partial depends upon the disabled person's ability to work. If a worker is disabled to the point where no job can be performed, he or she is deemed to have a total disability. On the other hand, if the worker is disabled but capable of performing some task (even if it's not the same as the previous employment), this condition is considered to be a partial disability.

A permanent total disability usually results in a complete and permanent loss of earning power, with no ability to perform any type of gainful employment. Many state compensation laws specify that certain injuries, such as the total loss of sight or loss of both hands or feet, constitute permanent total disability regardless of the insured's capacity to do some form of work.

A permanent partial disability generally refers to a permanent physical impairment that leaves the individual incapable of performing his or her original job, but results in only partial loss of earning ability since other jobs can still be performed. In other words, the employee may be able to perform some other type of work.

A temporary total disability usually refers to a total disability that lasts for a short period, after which the employee is fully able to return to work. For example, an individual strains his back while lifting a heavy box at work. After being in traction for four months he's able to resume his former job.

Finally, temporary partial disability usually refers to a temporary disablement that allows the employee to continue in the same job, but with a reduced capability. If the worker in the above example had only twisted his ankle, he would likely still be able to perform some of his regular duties at work.

State Workers Compensation laws are either compulsory or elective, with most being compulsory. This means that the employer must accept and comply with all of the provisions of the law. Conversely, if the state law is elective, then both the employer and employee have the option of either accepting or rejecting the law.

Some state Workers Compensation laws are deemed compulsory for some specific types of work and elective for others. However, if an employer chooses to reject an elective Workers Compensation law, the employer is denied any rights provided under the law, and loses use of most pro-employer law defenses as well.

It's important that everyone be aware of their own state's Workers Compensation provisions. More detailed information can be found at the U.S. Department of Labor's website and at WorkersCompensation.com.