Workers Comp 101 — The Basics of Workers Compensation

Chances are, if you are on this blog, you are looking for solutions to the high cost of workers comp. The place to start is to learn what workers comp is and is not.

Workers Compensation, often shortened to workers comp, work comp, workmans comp is a system of state and federal statutes providing benefits to injured employees — these are called “occupational injuries.” Such benefits are necessary because in the early part of the 1900’s if an employee was injured on the job they were essentiall “disposed of”, fired, then due to what was often a disabling injury, they could not find employement elsewhere. So, a system of compensation was legislated to provide for these people. And, hopefully to encourage safer workplaces.

If an employee is injured on the job, they are entitled to payment of medical care, hospital care, medical testing, lost wages (called “indemnity” benefits), medication, transportation to/from the medical provider, rehabilitation and if there is permanent injury, then there is likely a benefit for “permanency” and scarring.

Workers Comp varies by state and jurisdication. For example, if your company is based in Maryland, benefits are administerd according to Maryland laws. Just click on the map to find your state’s regulations:

If your are a federal governmental agency, benefits are administered by Federal Employees’ Compensation Act (FECA) . Click on that category at the top of drop down menu. Dockworkers, and several other categories of employees, for example those working on ships or offshore, for example, may be covered by other regulations such as the Longshore and Harbor Workers’ Compensation Act (LHWCA) even though you, as the employer, are physically located in the State of Maryland. (this is only an example). Some employees may be covered by state laws, others may be covered by LHWCA.

So, first, determine what statutes apply to your companies situation. You can ask your risk manager, insurance adjuster or human resource manager to find out.

Look for the next entry in WC 101 series next week. Sign up for the RSS feed or email updates in the top right corner of the blog. If you are ready to move along more quickly, look at our home site by clicking on the elephant in the right column, and go to WC 101. http://www.reduceyourworkerscomp.com/workers_comp.php