Workers Compensation

Posted in Human Resource Terms, Total Reads: 1264

Definition: Workers Compensation

Workers compensation is a form of compensation bargain in which workers are guaranteed benefits such as cash or wage-replacement, medical and career rehabilitation benefits when they suffer from an occupational disease or a physical injury during employment. These benefits are provided in exchange for the workers rights to sue the employer for negligence of safe working conditions.

The compensation can be in the form of different insurances:

  • Disability Insurance – Weekly payments instead of wages
  • Health Insurance  –  Reimbursement of medical expenses incurred
  • Life Insurance - Benefits payable to dependents of workers who were killed during employment

As per the workers compensation law, the negligent acts of the employer or employee are irrelevant in the provision of benefits.  Independent contractors are not covered under the law and they are not entitled to workers compensation benefits.  Domestic and agricultural workers in some states are either totally excluded or partially covered.

Although workers lose the right to sue the employer, the law doesn’t prevent them from suing third parties whose negligence lead to the worker being injured during work. For instance, a truck driver can sue an unemployed third party for an accident during work and at the same time receive workers compensation benefits.


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