Workers Compensation Laws

Provisions and benefits

Workers compensation is one of the major social insurance programs in United States which ensures the fixed monetary awards for the employees who are injured or disabled accidentally on the job without the need for legal actions. Under the workers compensation law employers are required to subscribe for workers compensation insurance, otherwise the company may end up paying financial penalties for medical treatment and the losses incurred by the employee. The first legislation was passed at the federal level in 1906 and gradually all the states adopted these laws by the end of 1948. Apart from the compensation benefits the workers compensation law also offers medical expenses due to the disability and may entail the employee to undergo job retraining.

Workers compensation laws at state and federal level:

  • Most of the states in US have their own governed competitive state insurance systems with varying public or private combination of workers compensation schemes. However, the US federal government works independently possessing its own requirements and statutory parameters for federal employees.
  • The workers compensation law at the state level adopts competitive state insurance which allows the employers to buy either from private insurance companies or the state. Vast majority of states in US operate on state fund while others depend on the private insurers for compensation programs.
  • In case if the companies fail to purchase insurance then there are public uninsured employer funds to pay benefits to workers. Most of the insurance policies are offered to employers through commercial insurance companies but if the employer thinks the market rates are too high then according to workers compensation law the coverage can be obtained through assigned risk programs.

Provisions of worker compensation laws:

  • According to the Federal Employment Compensation act the federal statutes are limited to the non-military and federal employees where the provisions of monetary awards are offered to the injured persons while performing the duties but not caused intentionally. According to the workers compensation law the injured worker usually has to sustain an injury for several days before he would be eligible for claiming the compensation. Once he/she becomes eligible, the employee receives two-thirds of the normal monthly salary or in case of death, a monetary compensation for the dependents.
  • The workers compensation law sometimes protects the employers by limiting the amount an injured employee can recover and eliminates the liability of fellow workers in work related accidents or illnesses. Most of the statutes avoid the lawsuits against the employer and try to solve the disputes primarily through administrative agencies.

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