Almost all employers in the United States have to carry some form of workers’ compensation. Basically, as a business, you’ll have a contractual agreement with an insurance company. This acts as an employee’s health insurance while they’re performing their professional duties.
Depending on the specifics of the deal, the workers’ comp is going to provide different benefits. However, it always applies to cases of work accidents: injury, illness, or even death.
It’s important to remember that workers’ compensation is a two-ways road. It acts as an employee’s safety net for bills, but it also protects you. Without having insurance, your company is completely liable to being sued in case of a work accident.
So, as a business owner, it’s in your best interest to offer workers’ comp ASAP. Additionally, it’s not really a choice most of the time; rather, it’s mandated by the law.
In some cases, there can be exceptions. For example, farmhands, domestic workers, insurance agents, etc don’t have to be offered this benefit in all states. Or at all. Similarly, federal employees have access to a national workers’ comp policy.
Case-by-case, your specific situation is going to depend on the state that you’re in. While the written regulations aren’t 100% identical across the U.S., operational implementations are more or less the same.
As an employer, the only real change you’d see from one province to the next is how bureaucratic procedures are followed. Overall, there are 3 main workers’ comp employer obligations:
- Obtaining and continuing to guarantee workers’ comp coverage for employees.
- Reacting to workplace injury & illnesses; both first aid and calling emergency services (911), as well as hearing out employees that are forwarding health concerns.
- Handling workers’ compensation claims (you’re not allowed to refuse them).
How to Simplify Workers’ Compensation
Making sure you’ve set up your workers’ comp policy correctly can feel overwhelming. Unless you work with vetted specialists, of course. At Hfit Health, we’ve helped some of America’s top companies fulfill their employer obligations for over 7 years.
Moreover, we’re occupational health experts. We can even set up an on-site clinic where we can better manage the wellness of your employees. Alternatively, we also offer telehealth services.
- Physical check-ups and clearances.
- Proprietary technology for best-in-class clinical care.
- Fewer medical leaves because of work accidents.
- Fewer expenses when compared to the alternatives of occupational health.
- Better, specialized care for injury & illnesses (compared to the ER and regular hospitals). We do only occupational health, so we know exactly what to do.
- Regular health screenings.
- Risk prevention & employee training.
- Illness and other health conditions evaluations (including X-rays).
- Improved worker’s mental health and morale.
Aside from the medical side, our personnel will also help you from a business standpoint:
- Assured legal compliance.
- Workers’ comp negotiation between all parties.
- Liability protection for the company.
- Fewer workers’ compensation expenses than your competitor’s (thanks to our ingenious prevention techniques).
- Complete knowledge of state and federal legislations.
- Workplace safety inspections and recommendations.
- Short wait times for work accidents. Efficient triage. Direct access to medical practitioners.
So, here’s the idea: you focus on scaling your organization and achieving your business goals. We’ll monitor workplace safety, worker health, and legal compliance. And if there’s an emergency, our clinicians will help all affected staff until the ambulance arrives.
Reach out today to discuss your custom occupational health plan.
Do You Need to Carry Workers’ Compensation?
Unless you’re from Texas, respecting workers’ comp employer obligations is not optional. Texas is the only U.S. state where carrying this insurance is up to the employer, no questions asked. However, you’d still need to file accident reports and notify relevant third parties.
In all other cases though, a vast majority of companies will mandate this insurance by law.
While in some places the law is in effect only if you have at least 3 – 5 employees, most states will require workers’ comp even for a single employee. The different policies come in effect if you’re based in:
- Rhode Island
- North Carolina
- New Mexico
- South Carolina
Similarly, you might not have to offer workers’ comp to:
- Day laborers
- Casual workers
- Insurance agents
- Real estate agents
- Business partners
- Railroad or maritime workers
- Farmhands (attention – only workers that are involved strictly with planting, growing and harvesting crops are considered “farmhands” by labor laws).
- Seasonal workers
- Some types of construction workers
If you’re not forced to carry workers’ compensation by law, we still strongly encourage you to do so. Even in cases where your business is exempt because of your industry (e.g. charity work) or personnel, that actually doesn’t exempt you from liability!
Yes, employees will have the option of suing you for work accidents even if the law allows you not to carry workers’ comp! So, the best available option is to always cover all of your bases.
Besides, it’s a type of insurance made for everyone’s best interests. When workers’ compensation is available, the probability of lawsuits drops significantly because workers are satisfied with their arrangement.
If lawsuits happen regardless, most states are only going to offer claimants their right to use the workers’ comp. It’s the go-to solution.
What If You Still Don’t Want Workers’ Comp?
In most cases, workers’ comp employer obligations are not a choice. In fact, it is illegal not to do it. So, if a work accident happens and the employee sues, something along these lines will happen:
- The Injured or ill employee sues the company in civil court.
- Sometimes, the state will offer the claimant money from a special fund, to get treatment.
- If money was offered, the state will then look to get that money back from your company.
- Even if you reimburse the amount, you’re still facing drastic fines and potential criminal charges for not having workers’ comp in the first place.
Lawsuits When You HAVE Workers’ Comp
In a very limited number of cases, the law will still allow employees to bring your company to court following a work accident. Now, regardless of how the employee was hurt, it must’ve been intentionally caused by you.
For example, you tell a foreman to go move a truck somewhere else, and you deliberately deflate one tire. So, as you can imagine, you’re completely safe from such scenarios as long as you’re a normal employer.
Of course, accusations can still happen, but they must be proven. If it turns out that the accusations are true, you’d be looking at some very substantial sums. You’d have to cover the treatment costs, punitive damages, mental distress, physical discomfort, etc.
To sum it up: don’t deliberately cause work accidents and you’re good to go. All other lawsuits normally resolve by just using the workers’ comp policy.
Of course, it’s better if you don’t have to waste time in court at all. Our workers’ compensation medical services also include law-savvy experts that can mediate conflictual claims between you and your employees.
That way, both parties can leave the negotiation table satisfied; no expenses spent on lawyers, no complicated legal processes.
What’s Covered by Workers’ Compensation?
Your workers’ comp employer obligations kick in every time there’s a workplace injury or illness. However, that can mean a few more things than you’d actually think. To simplify understanding workers’ comp, remember these 2 important terms:
- AOE – arising out of employment
- COE – course of employment
A physically harmful event is considered to be a “work accident” if it occurred while an employee was performing any of their regular duties. So, if it’s both AOE & COE.
All right, we know that’s still a mouthful. In other words, if a carpenter cuts themselves while working wood, during their regular working hours, it’s a work accident.
Similarly, if a truck driver gets into a traffic collision, it’s also a work accident. The logic behind is straightforward: both of those workers were engaged in normal duties for their jobs.
So, injuries or illnesses don’t have to happen on company premises to be considered work accidents. Don’t worry though, as workers’ compensation covers these events wherever they might occur (if they fall into the well-defined category of a work accident).
For example, even business travel is usually covered, because it’s not an activity that employees are performing outside their working hours.
In some limited cases, workers’ comp will also cover the costs of mental health treatment, such as PTSD therapy. However, purely psychological injuries must’ve resulted from a very serious, unusual, or completely unexpected stressor or event.
In Case of Chronic Conditions
Medically, there’s an important difference to be made for injuries and illnesses. They can either be “acute”, or “chronic”. Acute symptoms are short lived, while chronic ones persist for long(er) periods of time.
At the same time, an acute symptom also must’ve had a recent onset. For example, there’s a differentiation between acute and chronic leukemia. This also affects the treatment that the patient has to receive.
From an occupational health perspective, an acute injury results from some sort of traumatic event. It could be that a worker hit themselves with a hammer, or they got cut by a blade, or they fell off a ladder, etc. Such injuries are immediate, and emergency response is the solution.
However, some injuries are going to be chronic, and most illnesses resulting from work will be too. There are 2 instances where this can happen:
- Stress injuries – also known as cumulative trauma, they develop over longer lengths of time because of the same physical activity performed again and again in a non-ergonomic way.
- Unsafe exposure – workspaces that demand workers to interact with dangerous chemicals, fumes, noxes, etc, must provide protective equipment; otherwise, the employee is likely to develop a chronic health condition in time (such as lung diseases, skin diseases, or even cancer).
What ISN’T Covered by Workers’ Comp?
Companies don’t have implicit workers’ comp employer obligations in all cases. If a work accident occurred because the employee was either under the influence of drugs or alcohol at the time, you have no insurance responsibilities towards them.
This is very important to remember, because your workers’ comp premium is probably going to go up when you use the insurance.
Additionally, costs are only covered for injuries and illnesses that happened by accident. We’ve already described the repercussions of the business intentionally causing injuries. However, the law also applies to employees.
Staff that self-inflict injuries or illnesses are not eligible to benefit from workers’ comp. Similarly, if they’ve been harmed because of a fight they started, all treatment costs will be up to them.
The other injured party can also sue them for damages.
Moreover, no injury or illness that results from the employee engaging in illegal activity (various types of crimes, felonies, etc) will be subject to workers’ compensation.
Finally, any type of accident that happens outside of normal working hours and duties will not be covered either. Overtime is a highly debated topic around this. Insurance agencies usually treat overtime as “bonus” income; so this would make it income that’s not needed, but wanted.
However, back in 2020, Illinois accepted that people working overtime are doing it because of a necessity, not just for “extra” money. It is difficult to say how the situation will unfold in the future, so it’s worth keeping an eye on.
Legally, if overtime is seen as necessary, then those extra hours are included in the workers’ comp benefits too. Otherwise, they aren’t. Check your local workers’ comp legislation before requesting or approving overtime.
Better yet, get help from an occupational health expert.
The 3 Main Workers’ Comp Employer Obligations
You can boil down your obligations to 3 main categories:
- Provide workers’ comp coverage.
- React fast to both acute accidents and injury/illness reports.
- Guide staff through the workers’ comp claim process.
Let’s get into the details of each one.
1. Provide Coverage
While a few U.S. states exempt employers with a very small number of employees, a majority of organizations will have to give their staff coverage. There are both federal and state-level laws in place that clearly specify when workers’ comp procurement is mandatory.
Chances are that you’ll need to obtain workers’ comp. While most business owners will choose to buy the insurance from a private provider, you can also opt for self-insuring (more details below).
Keep in mind that another of your duties is to keep the coverage going indefinitely. Even if you had paid for workers’ comp coverage for 2 years, and then you stop, it’s still illegal. The moment a work accident happens, you’ll surely be sued by the employee without ongoing coverage.
The common types of workers’ comp employer obligations that you have to include in your coverage are:
- Medical bills – in case of a work accident, your company’s health insurance is going to pay for the injured staff’s diagnosis, treatment, hospitalization, and follow-ups with physicians.
- Long-term treatment – insurance also covers the cost of treatment for long-term conditions.
- Partial disability – some accidents are going to leave employees partially disabled either temporarily, or permanently. Workers will have to be given other standard duties for that timeframe, or even find completely other jobs while they’re healing.
In such cases, workers’ comp also gives them up to 75% of their normal weekly remuneration.
- Total disability – if staff become fully disabled by a work accident, they’ll no longer be able to work until fully recuperated. In this case, workers’ comp is not going to provide the entire lost wage, but it’ll help keep the worker afloat with a “stable”, recurring sum.
Temporary total disability benefits might be around 2/3rds of the worker’s average wage.
Permanent disabilities are more complex, and calculated depending on the affected body part, the nature of the illness, etc.
Permanently disabled staff would also receive annual cost-of-living adjustments (COLA), and an ongoing payment of roughly 66% of their average gross weekly wage at your company.
- Retraining – after a difficult recovery, a portion of workers will have difficulties readjusting to their working role. Workers’ comp also covers standard retraining costs for the regular duties that the employee had prior to their accident.
- Funeral expenses & family support – if a work injury or illness results in the death of an employee, the employer benefits of workers’ comp protect you from legal liability. Since you’ve fulfilled your obligations through providing the insurance, you won’t have to cover any of the associated damages. The insurer will pay the family for their loss of income, the funeral expenses, and sort out other case-by-case details.
The spouse of the deceased will receive 66% of their weekly wage at the time of death, which might be increased depending on the state average. 2 years after their spouse’s case, they’re also eligible for COLA.
Spouses lose any and all benefits from workers’ comp if they remarry. Children under 18 remain eligible, but only for a weekly allowance of $60.
As part of your obligation to provide coverage for the above, remember that you also have to inform workers of their benefits! In order to prove you’ve done so, it’s typically required to post multiple notices, in multiple languages, at key points within your business.
The workers should also be trained to check those notice boards regularly. Try to choose areas which are regularly frequented. That way, you have all potential liabilities covered.
- Clearly state the rights of employees to medical treatment. Include all relevant information.
- List all benefits given by workers’ compensation, and provide instruction about how to start the claim process.
- Mention the name of the insurance carrier, or stipulate that the company self-insures.
Should you self-insure?
The basic idea of self-insuring is putting away money to cover unforeseen events. In the case of a work accident, those funds are used to remedy the financial losses that the injured party’s treatment (or funeral costs) would entail.
Remember though, self-insuring means that you have to provide all the benefits described above, from the company’s money! However, it can still be an advantageous option in some cases.
It can be argued that self-insuring is actually more economical. If the overall risk of injury or illness is low in your business, and potential costs are predictable, you should also consider self-insuring.
However, it would still be wise to do it only if you’re not in debt, and if you have a sizable amount of valuable assets.
Proponents of self-insurance regularly bring up the tendency of insurance companies of turning a substantial profit with their premiums. Ultimately, it’s up to you what road you want to choose. If you think work accidents are highly unlikely, then you could just put what would normally be the cost of a premium insurance aside.
If necessary, you use that money to cover the treatment, disability benefits, etc of recovering employees.
Unsure how safe your workplace is? We offer state-of-the-art ergonomic surveillance and safety inspections. Understand your real risks fast & efficiently, by teaming up with our pros.
Choosing a coverage provider
There are 2 types of states when it comes to workers’ comp:
- Monopolistic (such as Ohio, North Dakota, Wyoming and Washington).
- Competitive (like Hawaii, Maine and California).
Monopolistic states will force you to get coverage from a state fund. You can’t do anything about it. On the other hand, competitive states give you the option between state funds and insurance companies.
2. Handle Work Accidents & Reports
In case employees suffer some sort of trauma during their work duties (cuts, bruises, lacerations, blunt force, etc), it is part of your obligations to offer first aid ASAP. To that extent, you should have trained staff that know how to handle emergency situations.
For example, if your business activities happen in a factory with many workers, you could have a full-time safety officer employed. Their sole responsibility would be to ensure that the workers adhere to occupational health and safety regulations.
However, if the size of your business does not warrant such a position, you could offer your foreman or other type of supervisor special training in this regard.
In case of an emergency, they’d be the first responder to the scene. Still, it’s best to have everyone instructed on what to do and how to evacuate the premises.
The Occupational Safety and Health Administration (OSHA) agency requires you to go over emergency plans with employees, but drills are only listed as a “good idea” in their procedure.
Of course, we highly recommend that you don’t skip this step. In a real emergency, the person with the highest responsibility will be busy with injured staff. So, you still need other members of the team to be able to coordinate a safe evacuation process.
Call 911 as soon as possible, while giving the best possible first aid to affected workers.
Filing employee reports
If staff get sick or injured on the job (but it’s not an emergency), it’s actually their responsibility to report it. Workers’ comp policies are actually very strict about this, and insurance providers are likely to waive any benefits very fast; no grace period or anything like that.
However, you’re not free of workers’ comp employer obligations either. First and foremost, you must process all reports with due diligence and haste. Your speedy involvement is paramount to the claim meeting its deadline or not.
An official record must be kept of all injuries and illnesses, and you’re not allowed to refuse an employee for submitting a report. Most companies have a templated form that employees have to fill out; collaborate with your legal team to draft one up.
After the employee fills out the details, you either have to inform your insurance carrier, your state’s Workers’ Compensation Commission, or sometimes both.
Remember that each state will have its own deadlines, rules, forms, and other regulations. The report submission has to comply with all of them in order to even be considered for workers’ comp.
And the “best part”? You have to do the same for a work accident that requires emergency services too. Once the employees are out of immediate danger, you’re going to have a deadline (depending on the type of accident) to contact the relevant authorities.
Collaborating with the employees
It’s easier to fulfill your workers’ comp employer obligations if you actively work together with your staff. If they’re feeling unwell, they should be encouraged to come forward to you. Many illnesses develop in time, with constant exposure and symptom aggravation.
The sooner they file a potential work accident report, the sooner you can get the bureaucratic process started. If it’s indeed proven that they have a health condition as a result of their work, they’ll get to benefit from workers’ comp, while you don’t lose anything either.
Sure, your premium might go up a bit, but consider the advantages well. All workers would like a professional environment where they know that management is looking after their health and best interests.
When you take a proactive stance towards an issue directly affecting your employees, you show that you truly care about them. So, to help your employees collect the benefits that they deserve, we advise holding a training session where you explain their workers’ comp rights.
The gist of it will sum up to these 3 points:
- Any injury or illness must be reported ASAP – workers’ comp claims have fixed deadlines all over the United States. If the process is delayed even a little, the employee might lose their chance at covered medical expenses and treatment.
This obligation directly falls to the employee in non-emergency cases, but not everyone understands that. If it’s not made clear from the get-go, you risk future conflicts with your staff because of lack of information and open communication.
- Work accidents have to be clearly detailed – in the case of injuries, it must be specifically stated how they happened. Where the worker was, what they were doing, when did it happen, who else was there, what caused the injury, why did the injury happen, etc.
It might sound a bit overwhelming, but it’s really very important. Insurance companies are going to request all details from you in order to begin processing a claim.
Even the severity of the injury is important. A “hand laceration” could be light, moderate or severe (and so on). State the facts and make sure not to exaggerate or make assumptions.
For illnesses, have an in-depth discussion with your employee. Ask them exactly when their symptoms started showing. Did something change in their work routine? Did they inhale noxious fumes even just 1 time without a mask on? How often are they having symptoms, etc.
- Cost coverage only happens in-network – at least, most of the time. Insurance companies tend to have preferred physicians and other medical providers. So, the workers’ comp will only cover costs if the employee goes to those professionals.
However, some states allow employers to designate their own healthcare providers. If you’re in such a scenario, ask the employee if they have any preferences. It’ll help with their morale.
Employee duty vs. employer duty
One final thing: making sure that employees do their duties is NOT part of your workers’ comp employer obligations. For example, if they fail to submit a claim on time, aren’t open about the facts of the injury, lie on the report, etc, that’s on them. You will not be held liable.
As long as you make it clear that postponing and hiding information will probably lead to a denial of claim, you’re good to go.
If it gets to a point where simple resolutions are no longer possible, the usual method is to get the help of a lawyer. However, that takes a lot of time and doesn’t even guarantee success.
It’s way better to partner with occupational health experts ahead of time. Law-savvy clinicians that are pros at prevention, diagnosis, treatment, and workers’ comp claims.
3. Resolve Workers’ Compensation Claims
Your workers’ comp employer obligations don’t stop after a work injury/illness report is submitted. If you just stop at doing the employee’s paperwork, they’d actually have a legal basis to sue you for additional damages (with the aid of an attorney).
So, in order to cover the full spectrum of your company’s workers’ compensation responsibilities, you must:
Start an investigation ASAP
Claims can only be accepted or declined on the basis of a field investigation. After the affected employee has filled your accident report form, you can’t submit it without verifying the facts within. This will offer you a comprehensive understanding of the accident’s circumstances.
Each type of work accident will have its particularities though. Depending on its nature, the investigation is also going to change.
For example, in the case of an acute injury, you have to carefully examine where the accident happened. What tools or machinery were involved? Was it a technical malfunction, or did the employee misuse the gear? Alternatively, maybe a third party is to blame for the accident.
Focus on the classic questions for solving an investigation: who, where, what, which, when, why. The sooner you can get an acceptable and relevant answer to each one, the sooner you’ll submit the report (as described at point 2).
Example: who else was there during the accident; what was the injured employee doing; where did the accident occur; which pieces of equipment caused the injury; when did the injury happen; why did the injury happen.
Repetitive stress injuries investigations are going to differ though. In this context, you’re trying to determine the cause of a condition that has developed over a longer period of time.
Your first order of business should be looking at what the worker does most in a regular working week. For example, wrist and finger pain are strongly linked with non-ergonomic techniques used over months and even years (from improper hammering, to bad posture while typing).
In case of a suspected illness, start by checking if the worker is correctly following all safety regulations when working with hazards.
Keep notes of all findings so that you can improve in the future as a business.
Offer genuine help
This is perhaps the most ignored duty from the workers’ comp employer obligations category. Remember that insurance claims aren’t just a technicality; a legal liability protection. You’re dealing with a real person that’s in pain; who’s distressed.
They probably don’t know what’s going to happen next, or even if they’ll receive the medical care that they need. OSHA (and us too) encourages an approach of “good faith” towards work accidents.
In other words, treat the employee with dignity and respect. Many workers consider they “have to” find a lawyer to help them because they’re left feeling uncertain and unguided. This is terrible for their long-term morale and for a successful reintegration in their workplace.
Furthermore, it can act as a solid reason for bringing your organization to court in an attempt to get more compensation.
You can circumvent all that with just a bit of patience and humanity. After you have the employee’s testimony and complete your investigation, share the findings with them openly. If your assessment and their claim don’t match up, bring that up.
You need to get on the same page before the insurance company or state agencies get involved in the matter. Otherwise, it’s going to drag on and potentially be a huge time waste for both parties.
If the employee is truly owed compensation because of an acute or chronic work accident, then make sure they get all the benefits they’re entitled to. Be the boss they want, and they’ll be the workers that you need.
As an employer, you have no grounds for retaliation against an employee just because they’re making a workers’ compensation claim. You’re not allowed to discriminate against them, cut their pay, demote them, or obviously, fire them.
Moreover, if an employee considers they’ve been subjected to adverse actions because of their claim, they can sue you. Their chances of success would be high too, because all they have to do legally is notify you of their claim.
A workers’ comp claim does not have to be processed and submitted for the judge or jury to rule in the favor of the employee.
Some employees might be overly defensive about their workers’ comp claim because of poor prior experiences. If they seem agitated or ready to fight, it might not have anything to do with you particularly. They might simply not expect to find any help in the company.
That’s actually a great opportunity to prove that you’re ready to fully support their legal rights. Get behind the claim 100%, and there won’t be any reason to worry about civil actions.
Of course, exceptions exist too. Just like some employers can be predatory about avoiding workers’ comp, some employees will try to take advantage of it too. Obviously, you’re not going to submit a claim for a papercut, or if someone burns their tongue on hot coffee.
If you notice an employee trying to take advantage of their workers’ comp, choose the high ground. Explain why it doesn’t apply in their case, and you’ll always have the upper hand in a potential legal battle.
Provide a selection of healthcare options
If your company has a list of preferred practitioners, clinics, or hospitals, you have to provide it to the injured employee. This must be done the moment that they report a work accident. Delaying this action might mean that the employee gets the right to choose their own physician.
Depending on your company’s workers’ comp employer obligations arrangement, that can translate to higher costs for you.
Pay the benefits
Workers’ comp is a “no fault” system. It exists because it acknowledges that realistically, there are multiple parties to blame when a work accident happens. But, in order to avoid lengthy & expensive lawsuits, it provides this faster and better option.
However, that also directly means that you have to pay your share when an accident happens. Ideally, you do this willingly by communicating and collaborating with the employee.
If you choose not to collaborate though, the employee can always lawyer up and eventually win the case. For example, they could appeal the payment through their state’s Workers’ Compensation Commission.
There’s really no point in delaying the inevitable. In fact, you’ll only lose face in front of the worker and their colleagues.
Your Workers’ Comp Employer Obligations Experts
We’ve been working with some of America’s top companies for the past decade, a time in which our extensive occupational health expertise has brought them many improvements.
A core part of our strategy is streamlining workers’ compensation. Our experts thrive in dynamic environments that involve a large number of parties: employees, supervisors, managers, safety officers, etc.
When you say “workers’ comp”, we think of negotiation, mediation, mutual understanding and gain. Instead of handling the process by yourself and potentially wasting time in court, just let us help.
Almost all of the USA’s states require you to carry workers’ comp, and you’ll face serious fines (or even criminal charges) if you don’t. So, you can’t really circumvent it, only do it better or worse. So we say, why not do it exactly like you should?
Additionally, we also offer full-scale occupational health services. Prevention, diagnosis, first response, long-term treatment, safety inspections, etc. You name it, we do it.
Innovate your approach to worker health and wellness together with us, Hfit Health.