How Does Workers Compensation Work?


Quick Answer

Workers' compensation works through an insurance program that many employers are required to maintain. When an employee is injured in a work-related incident, they can file a claim and, if approved, receive compensation for medical care and lost wages.

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Full Answer

Workers' compensation programs are state-mandated. Employers must post notices informing employees of their rights if they are injured on the job, and supply a workers' compensation claim form within 24 hours of an injury. Independent contractors are not covered by workers' compensation.

If the claim is approved, the employee receives payment for medical expenses, prescriptions and lost wages. The amount of benefits an employee receives and the process for filing claims vary by state. Injuries that are self-inflicted, involve alcohol or drugs, or that occurred while the employee was violating company policy are not covered. Employees who accept workers' compensation benefits forfeit their rights to sue the company unless the injury was the result of a reckless or intentional action on behalf of the employer.

If an injured employee doesn't recover enough to return to work or has limitations resulting from the injury, he may receive disability payments. If the employee's injury results in death, workers' compensation may provide compensation to the surviving family. Death and burial benefits help cover lost wages and funeral expenses.

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