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Who Pays for Workers’ Compensation Benefits?

Who Pays for Workers’ Compensation Benefits?

The possibility that a worker might suffer an injury while on the job is ever-present. No matter how safe the business is or how many precautions and safeguards are implemented, accidents are bound to happen. When it does, workers’ compensation insurance covers medical expenses related to a workplace injury or illness.

Workers’ compensation may also cover an employee’s wages when they are unable to return to work due to an illness or injury. Also, it offers rehabilitation when necessary. By receiving these benefits, employees waive the right to sue their employer or the business owner for the accident.

Worker’s Compensation and the States

Nearly all states require that business owners have insurance coverage for their employees, although particular regulations apply in different states. While some call for insurance even when there is only one employee, others make it mandatory only when at least four employees work at one place.

The process to sign up for worker’s compensation is also related to the geographical location of the business. In some states, employers might purchase it through private insurance companies, while in others, it is only available through state-run insurance funds. However, in all cases, it is the employer who must pay for worker’s compensation insurance. There is a percentage deduction in employee’s paychecks to cover this expense, but, unlike most health insurance policies, there are no employee payroll deductions for worker’s compensation insurance.

Workers’ Comp Costs for Employers

Employers purchasing worker’s compensation insurance for their employees must make payments throughout the year. The cost of the policy depends on the type of jobs that are being insured, which means that policies for office workers are less expensive than those for workers in the construction industry. Generally, workers’ compensation policies cover:

  • Expenses related to medical treatments
  • Ongoing costs of medical care
  • Missed wages
  • Temporary, permanent, full, or partial disability leave
  • Funeral costs when the employee passes away while on the job

Employers who do not purchase workers’ compensation insurance to cover their employees may find themselves at risk of fines or, in some cases, jail time for failing to comply with state requirements. By not having this policy, if an employee suffers an injury at work, the employer may be liable for their medical expenses, and they also risk being sued by their employee.

Worker’s Comp Employee Claims

As soon as an employee starts a new job, they should be informed about their workers’ compensation coverage. Also, employees should be able to easily find out what this policy covers and what process should be followed to present a claim.

An employee who suffers an injury or becomes ill while in the workplace should receive a claim form. It is then the employer’s responsibility to submit the claim form to the insurance company. In some states, a state’s department of labor is the entity that determines if the employee is also obligated to present a separate claim and whether there are regulated time limits to do so. Once the claim is approved, the employee’s benefits will be covered by the insurance company.

If you suffer an injury at work and discover that your employer does not carry workers’ compensation insurance, personalinjurylawyersbronx.com recommends that you hire legal representation right away in order to get the compensation you deserve for your injuries.


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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.