What are Workers' Compensation Statutes?

Workers’ compensation statutes are labor laws that govern an employer’s responsibility to compensate an employee for injuries suffered while working. In the U.S., state workers’ compensation statutes generally apply to companies or employers within a particular state. Federal workers’ compensation statutes apply to federal government employees, although a separate set of federal statutes applies to railroad employees.

State laws mandate that all employers participate in their state’s workers’ compensation insurance program. Nonetheless, not all workers can obtain coverage under either state or federal workers’ compensation statutes. Many states’ workers’ compensation statutes exclude certain classes of workers, such as independent contractors, volunteers, and seasonal employees. Whether an employee can claim workers’ compensation benefits depends on the nature of his or her employment and the applicable state workers’ compensation statutes. The state in which the workplace is located determines which state's workers' compensation statute applies to a particular case, and these statutes can differ significantly from one state to another.

Workers’ compensation statutes generally provide the exclusive remedy for an injured worker. This means an injured worker who seeks workers’ compensation benefits cannot also file a personal injury lawsuit against his or her employer seeking financial compensation for the injuries. Likewise, if a worker files a personal injury lawsuit against his or her employer for injuries suffered while working, then he or she has no right to seek workers’ compensation benefits through the employer. One difference between workers’ compensation benefits and financial compensation through a personal injury lawsuit is that workers’ compensation does not allow payment for pain and suffering, but a person could receive such compensation through a personal injury lawsuit.

State and federal workers’ compensation statutes also establish the financial benefits a worker receives if he suffers a particular injury while on the job. Each workers’ compensation program uses detailed formulas to determine the degree of impairment that an injury has caused, and then provides the worker with financial benefits accordingly. Available financial benefits under workers’ compensation may include payment of medical expenses, compensation for permanent injuries, retraining costs, and even replacement income if the person is unable to work for a period of time because of a workplace injury. As a result, the amount of financial benefits that a worker receives from a certain type of workplace injury may be quite different from the amount another injured worker receives.