Worker’s Compensation: What It Is and What It Means for You
Workers’ compensation has roots stretching all the way back to the 1910s. This was a time of rising accident risk in the workplace, coupled with the increasing influence of employers, workers, and insurance companies in terms of legislation. At the time, workers’ compensation represented the very first large-scale social insurance program in the U.S.
Fast forward to today, and workers’ compensation must legally be offered in most U.S. states by businesses that have employees. This form of insurance is quite comprehensive and is aimed at protecting employees who get injured or become ill due to exposure to unsafe conditions in the workplace.
The Cost of Workers’ Compensation
As of 2015, state and federal workers’ compensation laws covered more than 135 million eligible employees. The total of wages paid to these eligible workers was an incredible $7.2 trillion. Here are some additional statistics regarding workplace injury and illness and workers’ compensation:
· In 2014, there were 3 million workers non-fatally injured on the job and 4,821 workers killed on the job.
· The most frequent injuries reported are sprains and strains, which cost an average of $17,000. Others include cuts/punctures ($8,200), contusions ($8,000), inflammation ($24,500), and fractures ($42,400).
· The costliest injuries include amputation ($102,500), dislocation ($97,100), electric shock ($55,200), crushing ($54,600), multiple trauma ($50,000).
· The most dangerous industries include natural resources and mining; construction; manufacturing; and trade, transportation, and utilities.
With this in mind, let’s explore some of the basics of workers’ compensation.
Who Is Covered?
By law, anyone working for a for-profit company is covered under workers’ compensation. This includes full-time and part-time employees, borrowed and leased employees, family members, and volunteers. In addition, public employees are covered, such as those who work in jobs where they are exposed to hazardous conditions, teachers, and employees of New York State. Other people who are covered include:
· Farm workers paid $1,200 or more in the preceding calendar year
· Domestic workers who work 40 or more hours per week for the same employer
· Corporate officers in a corporation that employees two or more officers and/or two or more stockholders
· Officers of one- or two-person corporations where other people are employed
· Most employees of non-profit organizations
· Any other worker that is defined as an employee and not specifically excluded from coverage
It is important to note that independent contractors are generally excluded from workers’ compensation coverage. However, in light of the nature of construction work, the 2010 Construction Industry Fair Play Act allows construction workers working for a contractor to be considered employees of that contractor, and therefore, eligible for coverage.
Now, let’s take a look at what happens when a claim is made.
The Workers’ Compensation Claim Process
When an injury or illness results at the workplace, there is a specific process that must be followed by both the injured or ill employee and the employer. This process is as follows:
1. Immediately following the incident: The employee gets medical treatment and notifies their supervisor about what happened. The employee then has up to 30 days to notify the employer about the accident in writing. Finally, within two years of the accident, the employee must file a claim with the Workers’ Compensation Board (WCB) on Form Employee Claim.
2. Within 48 hours: The employee’s doctor must complete a preliminary medical report on the Form Doctor’s Initial Report. This report must be mailed to the District Office, with copies also sent to the employer or insurance carrier, the injured/ill employee, and any representative of the employee.
3. Within 10 days of notification of the accident: The employer must report the injury/illness to the WCB and the insurance company.
4. Within 14 days of the receipt of the Form Employer’s Report of Work-Related Injury/Illness: The insurer provides the injured/ill employee with a written statement of their rights under law. This can also be sent out with the employee’s first check, if that occurs earlier. The employee must be notified about and provide the contact information for any network they are required to use to get diagnostic testing done.
5. Within 18 days of the receipt of the Form Employer’s Report of Work-Related Injury/Illness: The insurer must begin the payment of benefits to the injured/ill employee, provided work time lost is greater than 7 days. If there is a dispute over the claim, the insurer must notify the WCB and anyone else involved.
6. Every 2 weeks: The insurer makes a payment to the injured/ill employee and notifies the WCB when compensation ends.
7. Every 45 days: The injured/ill employee’s doctor submits progress reports to the WCB via the Form Doctor’s Progress Report.
8. After 12 weeks: The insurer determines whether rehabilitation is a necessary treatment for the injured/ill employee.
Should an employee become disabled as a result of the injury or illness, they will be assigned a disability classification, which are as follows:
· Temporary Total Disability
· Temporary Partial Disability
· Permanent Total Disability
· Permanent Partial Disability
· Disfigurement
· Medical benefits
This is a lengthy but comprehensive process that ensures all parties involved are informed and protected under the law. Unfortunately, there are situations in which a person can be denied their workers’ compensation claim.
Who Can Be Denied?
Employees covered under the workers’ compensation system can still be denied their claim under certain circumstances. This includes the following:
· The employee was intoxicated or under the influence of drugs at the time of the accident
· The accident is related to or the result of a felony
· The injuries were self-inflicted
· The accident was the result of a fight the injured employee started
· The employee violated company policy
· The injury/illness occurred off the jobsite
· The claim was filed after the employee was laid off or fired
In other words, the injury or illness must have been the result of a legitimate accident that occurred while the employee was on the jobsite, in good mental and physical condition, and following company policy. Having said this, sometimes even when the injured/ill employee is in the right, there can be problems getting their benefits.
Problems with the Current System
As with any other system, the workers’ compensation system is not perfect. There are issues that can affect an employee’s receipt of compensation. At the root of many of the problems with the system is the fact that financial motives of the employer and the insurer are not in line with the financial needs of the injured/ill employee. For this reason, the following problems can arise:
· The exclusion of groups of workers
· Retaliation against workers
· Non-reporting of injuries
· Delay or denial of claims
· Limited choice of doctors
· Benefits that don’t meet the needs of the injured/ill employee
· The cost is transferred to the employees and the public
· Employees are treated like adversaries
It’s important to note that it is often minority groups that face these issues. These are groups such as immigrants, low-wage workers, workers misclassified as independent contractors, temp workers, older workers, and people with either occupational illnesses or disabilities.
The Bottom Line
Overall, the workers’ compensation system in the U.S. is working well for employees who have been injured or become ill due to an accident or unsafe conditions in the workplace. Employees can do their job with the security of knowing they are protected financially should they become unable to work due to a workplace accident, and this results in peace of mind.
