Charles Spinelli: How Workers’ Compensation Works
Workers’ compensation, otherwise called “workers’ comp,” is a program that offers and provides benefits to a company’s employees who are ill or who are injured while doing their job. It is a disability insurance program that provides healthcare benefits, cash benefits, or both.
In the United States, individual states typically handle workers’ compensation, and the benefits vary from state to state. Take Texas, for instance. At present, it is the only state where employers are not required to provide workers’ compensation insurance. In some states, small businesses are excluded from the worker’s compensation requirements. Other states have different requirements for various industries.
According to Charles Spinelli, under the workers’ compensation program, the salary replacement paid to an employee is usually less than the worker’s full salary. The more generous states pay around two-thirds of the employee’s gross salary. Workers’ compensation benefits are also often not taxable at the state or federal level. Taxes may be because of individuals with income from the Social Security Disability program.
Most compensation programs offer coverage of medical expenses only for workers who have work-related injuries. For example, a construction worker may claim compensation for an injury from a bad fall from a crane or scaffolding but not for an injury incurred while driving on the way home when they are no longer on the clock.
In certain situations, workers can receive the equivalent of paid sick days while they are on medical leave. Workers’ compensation pays the workers’ dependents if they die because of a work-related accident.
Charles Spinelli explains that by agreeing to get workers’ compensation, recipients waive their right to sue their employer or their company for negligence. As you can see, this particular compensation bargain aims to protect both workers and employers. Workers give up legal recourse in exchange for compensation, while employers guarantee compensation as they avoid the potentially higher cost of a negligence lawsuit.
In the U.S., the Department of Labor’s Office of Workers’ Compensation Programs covers federal employees, energy employees, dockworkers and harbor workers, and coal miners. The lack of clear standards for workers’ compensation has resulted in varied policies from state to state for similar types of injuries.
In conclusion, a worker’s location plays a pivotal role in determining the compensation for identical injuries. According to the Occupational Safety and Health Administration (OSHA), the current state of workers’ compensation is deemed “broken,” with around 50 percent of the costs falling on affected workers. Charles Spinelli adds that immigrant and low-income workers often forego applying for entitled benefits.
Charles Spinelli shares important information and insights on human resources in his series of articles. Click this link to access past posts.