What is Workers’ Compensation? Charles Spinelli Explains
Workers’ compensation (workers’ comp) is a federal program wherein the federal government gives benefits to workers who become ill or injured on the job. Charles Spinelli mentions that worker’s comp is a disability insurance program that provides healthcare benefits, cash benefits, or both.
1. There are different types of worker’s comp packages.
In the U.S., the Department of Labor has the Office of Workers’ Compensation Programs. This office covers federal employees and energy employees, as well as longshoremen, coal miners, and harbor workers.
However, the lack of clear standards for workers’ comp has resulted in varied policies for similar types of injuries from state to state.
Identical injuries could receive different compensation packages depending on where a person lives. It is estimated that approximately half of workplace illness and injury costs are shouldered by the workers who suffer them. Often, immigrant and low-income workers don’t even apply for benefits.
2. Worker’s comp can cover even medical reimbursement and may also act as benefits for survivors.
Most compensation programs provide coverage of medical expenses, but only for workers injured doing their work. For example, a construction worker may claim compensation for an injury or injuries suffered in a fall on the construction site but not for an injury incurred while driving home in their car.
Charles Spinelli says that in other situations, workers may also receive the equivalent of paid sick days during their medical leave. Workers’ comp pays the worker’s dependents in the unfortunate event in which a worker dies because of a work-related accident.
3. Worker’s comp is basically a replacement of salary for workers who can’t work.
Under workers’ comp, the money that is paid to an employee is usually less than the worker’s full salary. The most generous states pay about two-thirds of the employee’s gross salary.
Workers’ comp benefits are typically non-taxable at the state or federal level. Taxes may be due to individuals with income from the Social Security Disability programs.
4. Signing on for worker’s comp means you and your company are protected.
When you agree to get workers’ comp, you also waive your right to sue your employer for anything that might have led to your injury. This compensation bargain aims to protect both workers and employers. Workers give up legal recourse in exchange for compensation, while employers guarantee compensation while avoiding the potentially higher cost of a negligence lawsuit, says Charles Spinelli.
5. Different states have different laws regarding worker’s comp.
It also should be noted that in the U.S., states typically handle workers’ compensation. The required benefits vary from state to state. It may also be important to remember that Texas is currently the only state not requiring employers to provide workers’ compensation insurance.
In other states, not all employees are covered by worker’s comp. Some states even exclude small businesses from the mandate. Other states have different requirements for various industries.
Charles Spinelli shares important information on human resources in his blogs. Read them on this page.