Workers' compensation

Workers' compensation is insurance that pays medical costs and partial wage replacement when an employee is injured or made ill by their job. It is a no-fault system: the employee does not need to prove the employer did anything wrong, and in exchange, workers' comp is generally the exclusive remedy — employees usually cannot sue the employer for a covered workplace injury.

How it works in the United States

Workers' compensation is state law, not federal, and nearly every state requires employers to carry coverage — many from the very first employee. The shape varies by state:

• Coverage: bought from private insurers, a state fund, or via approved self-insurance, with premiums based on payroll and the risk class of the work.
• Benefits: medical treatment, temporary and permanent disability payments, rehabilitation, and death benefits — amounts and schedules set by each state.
• Employer duties: post required notices, report injuries to the insurer and state on tight deadlines, and never retaliate against an employee for filing a claim.

For shift-based workplaces — kitchens, wards, warehouses, shop floors — claims are a matter of when, not if. The employers who fare best report promptly, keep in touch with the injured employee, and plan modified or light-duty shifts that bring people back to work safely.

State workers' compensation acts in all 50 states, administered by state boards and commissions; federal schemes (FECA, Longshore Act) cover specific workforces.

Related terms

• Payroll taxes
• FMLA
• Timekeeping requirements