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What is Worker's Compensation?

By Sherry Holetzky
Updated May 17, 2024
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Once known as "workman's comp" for short, the term has been altered to a more politically correct, genderless phrase. Worker's compensation is basically an insurance program, mandated by law, that protects employees if they become ill or injured while carrying out the duties of a job. In some cases, worker's compensation may also pay damages to a worker's family if the employee is incapacitated for the long term or fatally injured.

Each state has its own version of worker's compensation laws, and state statutes regulate a given employer's responsibility to workers. State law also establishes which types of injuries and illnesses are actionable and the type of award an injured party can expect to receive. Federal laws only apply to employees of the federal government or those persons who conduct interstate commerce. Worker's compensation covers things like work related illnesses, falls and other accidents in the workplace, but it also covers harm to employees conducting business outside the workplace in some circumstances. For example, if an employee were required to perform deliveries as a job function, injuries sustained while making a delivery would likely be covered under worker's compensation.

Worker's compensation does not only cover medical expenses; it is also designed to prevent workers from suffering a complete loss of income due to injury or illness that is deemed the responsibility of the employer. In some cases, the employee may receive up to 2/3 of his or her regular wages, throughout recovery until he or she is able to return to work. This amount may be greater if the employee is permanently disabled and unable to resume working.

Vocational rehabilitation may also be included in a worker's compensation package. If a person becomes disabled on the job, he or she may qualify to receive vocational rehabilitation to learn a new skill and find a new job despite his or her condition. In some cases, the original employer will offer or even create a position that makes allowances for the employee's challenges.

Unfortunately, this is rare, and in many cases employees have to fight lengthy, difficult battles to receive the worker's compensation to which they are entitled. If you have sustained harm on the job and your employer is not forthcoming in supplying appropriate worker's compensation, you may need to hire an attorney. There are attorneys that specialize in worker's compensation cases. Locate one in your area to learn more about your rights. Many worker's compensation attorneys provide a free initial consultation, and most won't charge you unless you receive a settlement.

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Discussion Comments

By anon2589 — On Jul 17, 2007

Our head office is in Canada. We're trying to look into a matter.

Are 1099 contractors in our US operations supposed to be covered by our firm's workers' compensation insurance policy, or is the firm supposed to obtain evidence from each 1099 contractor of his/her own WC insurance coverage. If they are self-employed, one could argue this is a deductible expense of their self-employment, but of course, since our firm is the contracting party, the onus would be on our firm to ensure everyone is covered by insurance at the workplace.

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