Workers’ Compensation

Workers’ compensation laws represent an implicit contract between employers who are subject to the system and employees who suffer work-related injury or sickness.

Employers are granted immunity from suits by employees injured on the job (barring intentional wrongdoing on the part of the employer); workers’ compensation is the sole remedy for the injured employee. In exchange, employers pay money into the state programs that provide the compensation. This helps manage the risk of loss resulting from an employee injury because the costs are predictable.

Employees benefit because there is some certainty that they will be compensated for an on-the-job injury, regardless of fault, and regardless of whether the employer is financially able to pay that compensation.

Every state has enacted workers’ compensation laws to protect employees against loss of income and to make medical payments required due to a work-related injury, accident, illness, or disease. In every state except Texas, workers’ compensation coverage is mandatory. In most states, all employers who have at least one employee are covered, although some states exempt very small employers. Of course, even if you're exempt, you can generally choose to, and probably should, participate in the state program. Consult the map, below, to see what the workers' compensation law in your state provides.

There are three ways to obtain workers’ compensation coverage:

obtain individual insurance
self-insure
participate in a state insurance pool

The state insurance pool is usually less expensive than obtaining insurance on your own. Self-insurance is almost always too great a risk for small employers to bear and is a route typically taken only by the largest employers.

Premiums you pay for workers’ compensation coverage are tax-deductible business expenses. If you self-insure, the benefit payments that you make are deductible.

While each state has its own workers’ compensation laws, these laws share many common elements. Some of these are:

Benefits are provided only for accidental job-related injury.
Benefits include income replacement, medical, and death benefits.
Fault is generally not an issue.
Employees give up the right to sue you.
Employees retain the right to sue negligent third parties.
The system is administered by a state agency.
Most employers are required to participate. Only Texas has a voluntary system.

Participation in a workers' compensation program carries with it the obligation to investigate each incident and timely file an accident report with the state agency. In turn, the agency will decide whether payments should be awarded to your employee. An appeal to a court of law is usually allowed only where the facts are in dispute. Payment of benefits to your employee is usually made after a waiting period and is retroactive.

Even though a workers’ compensation agency or an insurance company will determine whether an injury is work-related, you should make your own investigation if the question is in doubt. Gather any facts that you can that support your belief and be prepared to present your arguments to the agency or company.

This package contains a number of checklists to help you deal with a workplace incident that results in the filing of a workers' compensation claim.

Consider

Don't forget that you may be better off if the accident is work-related because the workers’ compensation laws generally protect you from additional liability. The issue isn't always clear. Consider an employee who is mugged in your parking lot or an employee under stress who commits suicide. In cases like these, it is always best to consult with your lawyer.

Select a state from the map below to get information on which employers are subject to state workers compensation laws:

Workers Compensation in Alaska    choose another state

All employers with one or more employees.

Workers Compensation in Alabama    choose another state

All employers with five or more employees.

Workers Compensation in Arkansas    choose another state

All employers with three or more employees, except for employers engaged in repair work (two or more), contractors who subcontract part of their work (one or more), and subcontractors (one or more).

Workers Compensation in Arizona    choose another state

All employers, including sole proprietors.

Workers Compensation in California    choose another state

All employers and employees.

Workers Compensation in Colorado    choose another state

All employers with one or more employees.

Workers Compensation in Connecticut    choose another state

All employers and employees.

Workers Compensation in District of Columbia    choose another state

All employers and employees.

Workers Compensation in Delaware    choose another state

All employers and employees.

Workers Compensation in Florida    choose another state

All employers with four or more employees (one or more employees, for construction businesses).

Workers Compensation in Georgia    choose another state

All employers with three or more employees.

Workers Compensation in Hawaii    choose another state

All employers with one or more employees.

Workers Compensation in Iowa    choose another state

All employers and employees, including proprietors and partners who elect to be covered.

Workers Compensation in Idaho    choose another state

All employers and employees.

Workers Compensation in Illinois    choose another state

All employers and employees.

Workers Compensation in Indiana    choose another state

All employers and employees.

Workers Compensation in Kansas    choose another state

All employers and employees; employers whose payroll for the preceding year was less than $20,000 and who don't expect the current year's payroll to exceed $20,000 are excluded.

Workers Compensation in Kentucky    choose another state

All employers with one or more employees.

Workers Compensation in Louisiana    choose another state

All employers with one or more employees.

Workers Compensation in Massachusetts    choose another state

All employers with one or more employees. Employees include students participating in a work-based experience as part of the school-to-work program.

Workers Compensation in Maryland    choose another state

All employers with one or more employees.

Workers Compensation in Maine    choose another state

All employers and employees.

Workers Compensation in Michigan    choose another state

All employers with three or more employees or less than three if the third employee is employed for 33 hours per week for 13 weeks by the same employer.

Workers Compensation in Minnesota    choose another state

All employers and employees.

Workers Compensation in Missouri    choose another state

All employers (except construction employers) with five or more employees; construction employers with one or more.

Workers Compensation in Mississippi    choose another state

All employers with five or more employees.

Workers Compensation in Montana    choose another state

All employers and employees.

Workers Compensation in North Carolina    choose another state

All employers with three or more employees and all employment that exposes employees to radiation.

Workers Compensation in North Dakota    choose another state

All employers and employees.

Workers Compensation in Nebraska    choose another state

All employers with one or more employees.

Workers Compensation in New Hampshire    choose another state

All employers with one or more employees. In addition, any provision in an agreement that requires employers or insurance carriers to waive any rights of subrogation granted under the workers' compensation law is prohibited. Also, any provision for or in connection with a construction related contract that requires any party to indemnify any person or entity for injury to persons or damage to property not caused by the party or its employees, agents or subcontractors, is void.

Workers Compensation in New Jersey    choose another state

All employers must provide for the payment of obligations to injured employees or to the dependents of deceased employees through a workers' compensation insurance policy or through self-insurance approved by the Commissioner of the Department of Banking and Insurance. Sole proprietorships, partnerships and limited liability companies (LLCs) are exempt from this rule if the only employees are the business owner or partners or members of the LLC.

Workers Compensation in New Mexico    choose another state

All employers with three or more employees (one or more employees, for state-licensed construction businesses).

Workers Compensation in Nevada    choose another state

All employers and employees.

Workers Compensation in New York    choose another state

All employers with one or more employees.

Workers Compensation in Ohio    choose another state

All employers with one or more employees; employees of independent contractors who are not covered are considered employees of the person who contracted with the independent contractor.

Workers Compensation in Oklahoma    choose another state

All employers and employees.

Workers Compensation in Oregon    choose another state

All employers with one or more employees; sole proprietors and partners who are not engaged in work connected to the construction or alteration of real property are exempt.

Workers Compensation in Pennsylvania    choose another state

All employers and employees. Effective February 21, 2004, the definition of employee includes a person going to the aid of another and suffering injury as a result and those preventing the commission of a crime.

Workers Compensation in Puerto Rico    choose another state

All employers and employees.

Workers Compensation in Rhode Island    choose another state

Employers with one or more employees.

Workers Compensation in South Carolina    choose another state

All employers with four or more employees.

Workers Compensation in South Dakota    choose another state

All employers and employees.

Workers Compensation in Tennessee    choose another state

All employers with five or more employees (all with one or more employees for employers that mine or produce coal).

Workers Compensation in Texas    choose another state

Covered employment includes an employee in the service of another under a contract of hire, including express or implied, oral or written. Certain exceptions exist.

Workers Compensation in Utah    choose another state

All employers with one or more employees; partnerships and sole proprietorships may elect coverage, but an owner or proprietor is considered an employee until written notice is served on the insurer and the insurance commission

Workers Compensation in Virginia    choose another state

All employers with three or more employees.

Workers Compensation in Virgin Islands    choose another state

No information available.

Workers Compensation in Vermont    choose another state

All employers and employees.

Workers Compensation in Washington    choose another state

All employers and employees. Effective July 1, 2004, a physician assistant practicing under a physician's supervision may assist workers who suffer simple industrial injuries in making application for workers' compensation.

Workers Compensation in Wisconsin    choose another state

Employers who pay wages of $500 or more in a calendar quarter.

Workers Compensation in West Virginia    choose another state

All employers with one or more employees.

Workers Compensation in Wyoming    choose another state

All employers and employees.