What is Worker's Compensation?
Workers' compensation is a system created by state law. Most employers are required to participate in the system. Employers contribute money to a fund that then provides benefits to workers who are injured on the job. In theory, this system for workplace injuries works to the benefit of employees and employers. Employees benefit because they do not have to prove that their employer was at fault in order to be compensated for their injury. The employer benefits because the employee gives up the right to sue the employer. The employer's liability insurance goes down and they have more certainty about future expenses. Both parties get to avoid the time, hassle and uncertainty associated with a lawsuit.
Each state has its own set of workers' compensation statutes but most systems operate in a similar fashion. When an injury occurs, the employee notifies his or her employer and fills out a claim sheet. Both have certain obligations - the employee must report the incident in a timely fashion and the employer must provide them with a claim form, and often other information, in a timely fashion. The time-period to comply with these rules varies between states.
If the claim is initially denied, there is an appeals process. The particular process will depend on state law. There is usually an administrative process where the issue is reviewed and then an appeal to a special court or board if necessary. Sometimes these decisions are reviewed by the highest court in the state.
The benefits of workers' compensation go beyond reimbursing medical bills or paying for lost wages while unable to work. The benefits may include compensation for future benefits lost and for vocational training. If an injury is so severe that it will permanently affect the employee's ability to engage in certain employment and earn a certain wage they may be eligible for a monetary award. If the employee is unable to return to his or old position but can still work, workers' compensation can provide vocational training so that the employee can find gainful employment in a new job.
The downside to workers' compensation is that employees do not have the right to sue their employers for most workplace injuries or illnesses. The amount an employee will receive in compensation may be less than what they could have received with a successful lawsuit. On the other hand, an employee that could not have proven that the employer was negligent would have received nothing.
There are certain instances when an employee may still have the right to sue. One example is if the employer or their agent does something to harm to the worker intentionally. Even when workers' compensation in the exclusive remedy for the employee they retain the right to sue people other than their employer. If an employee is injured at work using a product made by third party they can go after the third party. If they succeed, however, then the employer may be able to go after them for any workers' compensation benefits already paid out.
Overall, most are content with this system of dealing with workplace injuries. There are no major efforts to reform the system. Although some of the payouts may be small they are easier to obtain and accessible to more people. Quick assistance for injured employees means that they can recover more quickly and thus return to work.
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