What are the Basic Workers' Compensation Rules?

Workers' compensation rules protect employers from employee lawsuits in the event of workplace injury or illness and provide injured employees with medical benefits and partial salary replacement benefits. The federal government administers plans for federal employees while states provide their own plans for state and local employees and those employed in the private sector. Though there may be some variation from state to state, basic workers' compensation rules require employers to purchase workers' compensation insurance based on the company's history of injury and illness and gross payroll. In cases of injury or illness, employers must file a report on the incident with their insurance company, which then decides whether to pay the claim. Generally, salary benefits are only a percentage of the workers' gross pay and medical bills are covered by workers' compensation insurance rather than the employee's regular health insurance carrier.

The U.S. Department of Labor administers several programs that provide medical, disability and wage replacement benefits to certain classifications of workers and their dependents. The Division of Energy Employees Occupational Illness Compensation program covers employees of the Department of Energy; the Longshore and Harbor Workers' Compensation program administers benefits to those who work on waters under the U.S. government's jurisdiction, as well as harbor and dock workers; and the program for Coal Mine Workers' Compensation covers U.S. miners who contract black lung disease. The Division of Federal Employees' Compensation administers the plan that covers all other federal workers, including postal employees. This latter program is the plan most states use as a benchmark when setting up their own basic workers' compensation rules and protocols.

Although some details of workers' compensation insurance laws may differ from one state to another, the basic workers' compensation rules are very similar. When an employee is injured or becomes ill as a consequence of his job, even if the incident was the result of negligence by the worker himself, the employer is required to submit a form to his worker's compensation insurance company documenting the injury or illness. There is usually a time limit of approximately seven days within which this report must be filed, and the employee must have missed a certain number of full or partial work days as a result of the injury. If the employer fails to file this report, the worker should notify the insurer himself, in writing.

The employer's insurance company rules on whether it will pay the claim within a specified period of time set forth by law. When approved, all medical expenditures associated with the incident will be covered by the workers' compensation insurance company, and the employee will begin receiving a percentage of his wages, usually within a month, excepting the initial period of time immediately after the injury and before the report was filed. In many states, that initial period will be covered if the disability lasts longer than a specific length of time. In cases in which the insurance company decides not to pay, the employee may have to engage a workers' compensation lawyer and sue for benefits.