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Workers' Compensation Programs - Overview

 

Picture of injured worker receiving first aid from coworkerWorkers' Compensation (WC) laws are designed to ensure that employees who are injured or disabled on the job are provided with medical care, rehabilitative services, and fixed monetary awards, eliminating the need for prolonged litigation. These laws also provide benefits for dependents of those workers who are killed because of work-related accidents or illnesses. Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents.

NOTE: Select specific state Workers' Compensation summaries here.

Background

The workers' compensation system was established, in part, to avoid protracted legal proceedings. In exchange for giving up the right to sue an employer in court, employees get workers' compensation benefits no matter who was at fault. Before the workers' compensation system was enacted, if you sued your employer in court, you may have been able to recover a large amount of money, but only if you could prove that the injury was caused by your employer. Now you may be able to sue in court if your injury was caused by someone other than your employer (a visitor or outside contractor, for example) or if it was caused by a defective product (such as a flaw in the construction of the equipment you were working with).

Federal and state statutes comprise the bulk of laws on Workers' Compensation. The statutes are then used as the basis for regulations, which govern the operation of the programs. A separate topic lists acronyms associated with these statutes and regulations. Federal statutes are limited to federal employees or those workers employed in some aspect of interstate commerce. A list of those statutes and regulations may be seen in the Workers' Compensation - Federal Statutes topic.

Federal Statutes

The Federal Employment Compensation Act (FECA) provides workers' compensation for non-military federal employees. Many of its provisions are typical of most state worker compensation laws. Awards are limited to "disability or death" sustained while in the performance of the employee's duties due to injury or disease, but not caused willfully by the employee or by intoxication. The act covers medical expenses due to the disability and may require the employee to undergo rehabilitation and/or job retraining. A disabled employee receives two thirds of his normal monthly salary during his disability and may receive more for permanent physical injuries, or if he has dependents. The act provides for compensation for the survivors of an employee who is killed. The act is administered by the Office of Workers' Compensation Programs.

The Federal Employment Liability Act (FELA), while not a workers' compensation statute, provides that railroads engaged in interstate commerce are liable for injuries to their employees if they have been negligent.

The Merchant Marine Act (the Jones Act) provides seamen with the same protection from employer negligence as FELA provides railroad workers.

Congress enacted the Longshore and Harbor Workers' Compensation Act (LHWCA) to provide workers' compensation to specified employees of private maritime employers. The Office of Workers' Compensation Programs administers the act.

The Black Lung Benefits Act provides for workers' compensation for miners suffering from "black lung" (pneumoconiosis). The Act requires liable mine operators to pay disability payments and establishes a fund administered by the Secretary of Labor to provide disability payments to miners when the mine operator is unknown or unable to pay. The Office of Workers' Compensation Programs regulates the administration of the act.

The Energy Employees Occupational Illness Compensation Program Act provides benefits to employees and qualified survivors of the Department of Energy and its contractors who developed radiation-related cancer, Chronic Beryllium Disease, or Chronic Silicosis. Monetary and medical care compensation is only available to people and their survivors who worked or were exposed at certain facilities during specific time periods. The Office of Workers' Compensation Programs is responsible for adjudicating and administering claims.

General Information

Most of the states have enacted comprehensive state compensation programs that are applicable to most employers. These statutes typically limit the liability of the employer and fellow employees, require employers to obtain insurance to cover potential workers' compensation claims, and set up a fund for claims that employers have illegally failed to insure against.

If you are injured on the job, or suffer a work-related illness or disease that prevents you from working, you may be eligible to receive benefits from your state workers' compensation program. You are also entitled to free medical care. If your disability is classified as permanent or results in death, additional benefits are available to you and your family.

In most states, employers purchase insurance for their employees from a workers' compensation insurance company--also called an "insurance carrier." Several states operate an insurance pool fund, which may be mandatory in order to reduce costs, or may be used to cover assigned risk employers. In some states, larger employers who are clearly solvent are allowed to self-insure (act as their own insurance company), while smaller companies (with fewer than three or four employees) are not required to carry workers' compensation insurance at all. When a worker is injured, his or her claim is filed with the insurance company -- or self-insuring employer -- who pays medical and disability benefits according to a state-approved formula.

In most states, the initial medical expenses are completely covered. Ongoing therapy is frequently covered until a determination of maximum medial improvement is made. Additionally, vocational rehabilitation services must be made available in suitable cases. The disability benefit payments are typically determined in two different ways. In the first, common occupational injuries (such as loss of hand, foot, arm, sight, or hearing, etc.) are listed on a schedule, which specifies the payment amount and period over which it will be paid. In the second method, non-scheduled injuries are rated on a percent of total disability scale and a corresponding percentage of the maximum award amount is paid as compensation. Compensation for scheduled injuries is usually a proportion of the maximum payment amount and payment period allowed for non-scheduled injuries. In some states the two methods are blended together, and in other states there are no scheduled injuries.

Most workers are eligible for workers' compensation coverage, but every state excludes some workers. Exclusions often include:

                   business owners

                   independent contractors

                   casual workers

                   domestic employees in private homes

                   farm workers

                   maritime workers

                   railroad employees, and

                   unpaid volunteers.

Most on-the-job injuries are covered by workers' compensation. The workers' compensation system is designed to provide benefits to injured workers no matter whether an injury is caused by the employer's or employee's negligence. But there are some limits. Generally, injuries caused as a result of an employee being intoxicated or using illegal drugs are not covered by workers' compensation. Coverage may also be denied in situations involving:

                   self-inflicted injuries (including those caused by a person who starts a fight)

                   injuries suffered while a worker was committing a serious crime

                   injuries suffered while an employee was not on the job, and

                   injuries suffered when an employee's conduct violated company policy.

Under many state workers' compensation laws, injured employees are not entitled to the entire amount of their regular salary while off work due to a work-related accident. Income benefits while temporarily disabled and off work are generally computed at two thirds (2/3) of the employee's gross average weekly wage. However, the state laws generally set a maximum weekly wage that is used in computing income benefits. The maximum wage set by state law is usually dependent on the date of injury or discovery of illness.

Specific State Information

Individual states create, regulate, and administer their own workers' compensation system. There are substantial differences among them in terms of coverage, exemptions, and benefits. See the state overview topics below for more detailed information about the Workers' Compensation program in your state.

Select a state from the list below to see specific Workers' Compensation information:

Alabama

Nevada

Alaska

New Hampshire

Arizona

New Jersey

Arkansas

New Mexico

California

New York

Colorado

North Carolina

Connecticut

North Dakota

Delaware

Ohio

District of Columbia

Oklahoma

Florida

Oregon

Georgia

Pennsylvania

Hawaii

Puerto Rico

Idaho

Rhode Island

Illinois

South Carolina

Indiana

South Dakota

Iowa

Tennessee

Kansas

Texas

Kentucky

Utah

Louisiana

Vermont

Maine

Virgin Islands

Maryland

Virginia

Massachusetts

Washington

Michigan

West Virginia

Minnesota

Wisconsin

Mississippi

Wyoming

Missouri

United States:

Montana

FECA

Nebraska

LHWCA

 

Additional Information

The Department of Labor conducts periodic surveys of State Workers' Compensation laws. The results are compiled into many tables of WC characteristics and made available online at:
http://www.dol.gov/esa/regs/statutes/owcp/stwclaw/stwclaw.htm

Contact information for each state's Workers' Compensation program is available from the DOL website at:
http://www.dol.gov/esa/regs/compliance/owcp/wc.htm

Source

Much of the information for this topic was drawn from the DOL OWCP website at:
http://www.dol.gov/dol/topic/workcomp/index.htm


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