What Are Workers' Compensation Benefits?

Workers' compensation benefits are financial payments made to employees who are injured while at their jobs. Employers are required by law to provide these payments and typically purchase insurance to provide coverage of the costs of benefits.

Governance of state workers' compensation programs is conducted by each state's workers' compensation office and state requirements differ. Insurance benefits are intended to cover medical expenses, lost wages, survivor's benefits if an employee dies on the job, retraining and benefits for permanent disability or injury compensation. Employees accepting workers' compensation insurance benefits must typically agree not to sue the employer. Benefits are paid regardless of whether the employee or employer caused the injury or illness. Denial of benefits is possible if drug or alcohol use contributed to the accident.

Some employers are not required to participate in the states' workers' compensation program, and their employees must find other arrangements or purchase insurance to cover medical expenses and lost income. Some states allow small companies or particular industries to avoid workers' compensation requirements. Independent contractors, volunteers and business owners are also usually excluded from coverage. Federal government employees are covered by a separate federal program and are exempt from their states' worker's compensation rules.

The amount of disability benefits that workers are entitled to depends on how much they were earning prior to the injury or illness. Disabilities are categorized as either temporary or permanent and either partial or total, but benefits are available in all cases. A partial disability is one that does not entirely prevent an individual from working, whereas a total disability is one that makes work entirely impossible, states NOLO.

Generally, only conventional medical treatments are covered by worker compensation benefits. However, therapies such as counseling and acupuncture may be covered. Rehabilitation refers to such care as physical therapy, where the intention is to restore an individual's ability to wok. In addition to medical treatment, worker compensation benefits typically cover the expense of special equipment, such as wheelchairs or mobility vehicles.

Death benefits are paid to a deceased worker's financially dependent relatives, whether this is a spouse, child, parent or even sibling. The amount paid will usually be a percentage of earnings, sometimes paid as a lump sum. Expenses covered might also include funerals and burials.