- February 15, 2019
- Posted by: oneplacefinancial
- Category: Tips
Workers’ compensation is a special type of business insurance package that covers employees for any injuries sustained or illnesses acquired because of the job. This a state requirement and the rules and regulations vary accordingly.
In case of said injury or medical ailment, the employees receive certain benefits. For instance, if a worker gets physically hurt or disabled while operating machinery in the workplace, the company will compensate their wages for the days they miss.
Similarly, if they are to get ill because of the workplace environment, they’ll be compensated then as well. Through this policy, the company ensures that the employees will not be eligible to sue them for their condition.
When a company is required to have workers’ compensation depends largely on the state they’re in. Each state has its own benchmarks on when this is needed. Moreover, who qualifies as an employee is also determined by the state.
Usually, a minimum of five employees warrants workers’ compensation, though this figure may vary as well. For instance, the California Labor Code has clear instructions for employers regarding this aspect.
The state usually defines who may be categorized as an employee depending on the nature of their work, their relation to the employee, and the number of total employees. Certain industries may also be excluded from this particular form of insurance, such as those lying in the agricultural sector or one that has seasonal workers. Moreover, independent contractors are usually excluded from workers’ compensation as well.
Illnesses & Injuries Covered
Workers’ compensation typically only covers the costs and payments of injuries and illnesses sustained in a work-related activity. This doesn’t have to be due to a single incident, such as a workplace accident. It can also be something that was caused due to long-term exposure to a certain workplace element.
For example, an employee regularly does heavy lifting in warehouses may develop a muscle injury over time. Similarly, being exposed to a particular chemical each day at a factory may put workers at risk of developing a medical condition later on.
These conditions will be accounted for and covered by the insurance policy. Moreover, employees don’t necessarily have to be present at their workplace when they get injured/ill. The policy takes effect as long as the cause was a work-related activity.
How to Claim Workers’ Compensation
Both the employers and their employees must abide by a few rules in order to avail workers’ compensation. Employers need to purchase the insurance as per the state requirements, form a verified insurance company. Negligence of failure to comply in this regard can result in severe penalties, and they may even be sent to jail.
As for the employees, they’re required to report their illness or injury to their employer immediately. This needs to be done within a set period of time, after which they may no longer be eligible to receive the benefits of workers’ compensation.
Both, the employers and the employees need to work together for them to properly avail this type of insurance. This means all rules and rights must be explained beforehand, and both parties should be aware of their responsibilities.
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