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Worker's Compensation Laws - Explained

What are Worker's Compensation Laws?

Written by Jason Gordon

Updated at September 26th, 2021

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Table of Contents

What are Workers Compensation laws?How do Workers Compensation laws protect employees?How do Workers Compensation laws protect employers?Discussion QuestionPractice QuestionAcademic Research

What are Workers Compensation laws?

Workers Compensation laws are either state or federal statutes designed to protect employees and their families from the risks of accidental injury, death, or disease resulting from their employment. It is a form of insurance for the employee that is paid for by the employer.

Next Article: Employment Verification Laws Back to: EMPLOYMENT LAWS

How do Workers Compensation laws protect employees?

If an employee suffers an accidental injury in the course of performance of her work obligations, the administering workers compensation board or commission will pay the employee a pre-determined percentage of her wages during the period of temporary disability. 

The governing commission also administers claims and makes determinations as to the validity of claims for injuries allegedly suffered in the course of employment.

How do Workers Compensation laws protect employers?

Workers compensation laws protect employers as well as employees. It assures that an employee will be compensated in the event of a work-related injury. 

This protects the employee from the consequences of working for an insolvent employer that may not be able to continue paying the employee or that may go out of business in the event the employee sues the employer. 

Workers compensation payments are generally the exclusive remedy available to the injured employee. That is, the employee cannot sue the employer unless the conduct of the employer that injured the employee was intentional.

  • See also, Worker's Compensation Coverage A & Worker's Compensation Coverage B

Note: The Federal Employees Compensation Act (FECA) establishes a workers compensation scheme for federal employees. The FECA program is administered by the Office of Workers Compensation Programs (OWCP). All states have statutes establishing similar plans and state-run commissions or boards to administer the program. Some states allow employers to self-insure for workers compensation claims, while other states require employers to make recurring payment to a state-funded, workers compensation plan. The premiums paid by employers are the funds used to compensate injured employees making workers compensation claims.

Related Topics

  • What are the major employment laws?
  • What are the taxation requirements imposed upon employers?
  • What is the Fair Labor Standards Act (FLSA)?
  • Family Medical Leave Act (FMLA)?
  • Worker Adjustment and Retraining Act (WARN Act)?
  • Occupational Safety and Health Act (OSHA)?
  • Employee Retirement Income Security Act (ERISA)?
  • Consolidated Omnibus Budget Reconciliation Act (COBRA)?
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Workers Compensation Laws?
  • Employment Verification Laws?
  • Workplace Privacy Laws?
  • Workers Compensation Laws?
  • Workers Compensation Definition
  • Workers Compensation Coverage A Definition
  • Workers Compensation Coverage B Definition

Discussion Question

How do you feel about federal and state regulation of injuries employees suffer while on the job? Are these regulations justified? Why or why not? Who enjoys a greater benefit, employees or employers? Why?

Practice Question

Martha is an employee of ABC Corp. She is walking down the stairs in the corporate office, trips, and breaks her ankle. Because of the nature of her work requires standing and walking, she is unable to work for several weeks. What benefits do workers compensation laws provide to her and her employer? What are the disadvantages to Martha?

Academic Research


worker's compensation laws

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