Workers’ compensation: The more you know, the less you fear
On a daily basis, employers worry about the well-being of their workers and their company as a whole. A mistake could put the business in a tailspin, so organizations have to be sure to follow all government regulations and treat their people with respect. One of the largest concerns executives and their human resources teams may encounter is workers’ compensation. Let’s take a closer look at this necessary standard for every employer:
“Workers’ compensation is state mandated.”
Workers’ compensation is state-mandated insurance which provides compensation in the case of a work-related injury or illness. In most instances, employees can receive these benefits regardless of the party at fault. In exchange for workers’ compensation, employees usually rescind their right to sue their employer for damages due to those injuries or illnesses. While the federal government has its own workers’ compensation program for its employees, every state administers their own plan employers must follow.
In addition to following the guidelines their state has laid out, employers also have other obligations when it comes to workers’ compensation. To begin, companies should make their employees aware of their legal rights and how the business’s coverage compares to that of the state’s. HR teams should inform people of the benefits available in these programs, including income when employees are off work, medical expense payment and additional rehabilitation assistance such as on-the-job training. Organizations should also be sure to give people the details regarding their workers compensation carrier and provide claim forms when necessary.
By being transparent with their workers, employers can avoid dissatisfied employees and potential lawsuits.
What situations aren’t covered?
Although workers’ compensation covers a wide array of situations, there are certain circumstances that do not fall under this umbrella. According to Nolo, they are as follows:
- Injuries caused by intoxication or drugs.
- Self-inflicted injuries.
- Injuries from a fight started by the employee.
- Injuries resulting from horseplay or violation of company policy.
- Felony-related injuries.
- Injuries an employee suffers off the job.
- Injuries claimed after an employee is terminated or laid off.
- Injuries to an independent contractor.
Voluntarily participation for small employers
Organizations are required to carry workers’ compensation insurance through a third-party carrier, on a self-insured basis or by enrolling in the state’s program, according to the U.S. Small Business Administration. Some states will provide exemptions for employers with less than a certain number of workers. In these cases, companies can choose to voluntarily participate in workers’ compensation coverage.
While this cooperation could add extra administrative burden or increase businesses’ premiums, intentional participation has many benefits for companies. Employees may feel safer on the job, knowing they have workers’ compensation insurance should anything happen. Furthermore, employer liability is reduced tremendously.
It’s important for companies and their human resources leaders to be aware of their rights and obligations to their employees. Providing workers’ compensation insurance is not only state-mandated, but beneficial for businesses. Employees will feel more comfortable in their workplace knowing their income is protected in the case of an injury or illness that occurs on the job. This sense of value and satisfaction can improve an organization’s retention rate, while reducing their liability.
SBS Payroll administers automated workers’ compensation reporting and payments, and can offer affordable solutions through its preferred workers’ compensation partners, saving employers time and money.