7 Must-Know Facts for Employers
Workers’ compensation is a law that grants financial and medical assistance to people who get sick or injured on the job. This law seems fair enough on the surface, but sometimes employees try to take advantage of it and cheat the system.
Workers’ compensation claims aren’t always black and white, and it can be challenging to determine if claims are honest. Understanding these seven facts will help employers demystify workers’ comp claims and ensure employees use the law as intended.
A Quick Overview of Workers’ Compensation
Workers’ compensation is a law that provides insurance to the country’s workforce. It started as a liability program for dangerous jobs such as coal mining and railroad work in the early 1900s, but today, it applies to many professions. In fact, most states require every company to have workers’ comp insurance regardless of the industry.
Workers’ comp offers three major disability compensation programs — wage replacements, medical benefits and vocational rehabilitation. Employees can receive total compensation if they suffer an illness or injury in the workplace. This also gives employers a much greater incentive to keep their work environments safe and accident-free.
7 Workers’ Comp Facts All Employers Should Know
Although workers’ compensation is supposed to be a just system for employees and employers, it doesn’t always play out that way. These seven facts about workers’ comp will help business leaders clarify any claims their employees make to ensure a fair result.
1. “No-Fault” Can Be Deceiving
Although workers’ compensation claims only apply to no-fault incidents, the meaning of “no-fault” can be deceiving. This term seems to suggest the illness or injury must not be the employee’s fault for them to become eligible for a claim. However, an employee can still file a workers’ comp claim even if the incident was 100% their fault.
Workers’ comp applies to all work-related incidents, regardless of who caused them. Unfortunately, this generous policy could lead employees to fake injuries on the job or even deliberately injure themselves to get worker’s comp benefits. Companies must know employees might try to take advantage of the vague language surrounding “no-fault” incidents.
2. Employers Can Deny Claims
Since workers often try to take advantage of workers’ comp insurance, businesses can deny claims if they see fit. Most denied claims involve preexisting conditions or the employee’s failure to meet paperwork deadlines. Sometimes employers will also deny a claim if the incident occurred outside the workplace.
However, 47% of denied claims ultimately receive a settlement or reward. An initial denial doesn’t always mean the issue has resolved. Employers must prepare for denied claims appeals. In the most extreme cases, a worker might file a lawsuit after having their workers’ comp claim dismissed.
3. Lost Wages Pay Rates Are Subject to Change
Lost wage payments make up the bulk of workers’ compensation benefits. Workers’ comp insurance typically pays injured employees two-thirds of their ongoing lost wages during rehabilitation when they can’t work. Aside from payroll, the compensation rate also depends on the employee’s occupation and the enterprise’s history.
High-risk occupations like police officers and firefighters tend to get greater benefits because of the dangerous nature of their work. Most businesses also have an experience modification number that helps them calculate. Employers with clean records and few reported incidents have lower modification numbers and lower compensation rates.
4. Doctors Determine Disability Benefits
When an employee suffers a severe work-related injury that requires disability benefits, the level of compensation is out of the employer’s control. As the medical authority, the employee’s doctor ultimately determines what type of disability benefits they should receive. The doctor must document the patient’s eligibility and communicate closely with the employer.
Injured workers can either receive temporary partial disability (TPD) benefits or temporary total disability (TTD) benefits. TPD covers people who suffer injuries that partially limit their ability to work full time. TTD covers people who can no longer work full time in any occupation. In both cases, the benefits cover all necessary medical expenses.
5. Employers Are Expected to Initiate Workers’ Comp Claims
Business leaders can’t expect their employees to initiate workers’ compensation claims. Employers are legally obligated to put waivers around the workplace reminding employees about filing claims. They also have to provide employees with all necessary paperwork if an incident occurs.
Some states have time limits for how long an organization can wait before filing a claim. If an employer misses the deadline, the injured employee could decide to sue. For this reason alone, employers must initiate the claims process and stay one step ahead.
Keeping up also requires employers to have detailed risk management and emergency response procedures. All businesses should train employees in basic first aid, including how to perform CPR and treat common injuries. Emergency preparedness and quick thinking can prevent an injury from becoming a permanent disability.
6. Incidents Can Occur Outside the Workplace
Contrary to popular belief, employees can still be eligible for workers’ compensation even if they suffer an injury outside the workplace. The damage must happen within the scope of employment according to the letter of the law. If the incident occurs while the employee drives to work or attends an obligatory company event, they can still file a claim.
Businesses need to know the fine line between within and outside the scope of employment. If an employee’s illness or injury connects to the organization in any way, their compensation claim is probably valid. Don’t get into further legal trouble by denying any claims just because the incident occurred outside operating hours.
7. Employees Cannot Sue After Making a Claim
There is another crucial reason why companies need to initiate worker’s compensation claims. Once the claim is official, the employee can no longer file a lawsuit. American citizens forgo the right to any other legal proceedings once they accept workers’ compensation benefits.
Workers’ comp is always better than a lawsuit from the employer’s point of view. The parties can quietly resolve the issue with financial and medical assistance from an insurance company. This solution is cheaper and less stressful than settling the case in court.
Worker’s Comp Can Get Complicated
The principle of worker’s compensation is straightforward, but sometimes claims can be complicated. Nobody wants to get caught in the middle of a legal battle. These seven facts can help employers navigate the murky waters of workers’ comp and ensure a fair outcome for everyone involved.