Workers' Compensation Law

Each state has its own workers’ compensation system with distinct rules, procedures, and benefits. These differences can affect how employees file claims, how their conditions are evaluated, and what benefits they receive. Most private and public employers are required to carry insurance that provides benefits to employees who experience workplace injuries or illnesses. Federal employees have a separate program, and certain categories of workers, such as maritime and railroad employees, are covered by special federal laws rather than by state workers’ compensation systems. In most states, individuals classified as independent contractors do not qualify for workers’ compensation benefits, although there are often disputes over whether a worker has been correctly classified.

Mandatory Coverage and Exclusions

In many states, employers are required to obtain workers’ compensation insurance as soon as they hire even a single employee. Certain groups, such as agricultural and domestic workers, are sometimes excluded from coverage under specific state statutes. Some states also allow exceptions for very small businesses.

Coverage of Workplace Injuries and Illnesses

Workers’ compensation generally applies to injuries and illnesses that arise in the course and scope of employment. This coverage can extend to sudden incidents, such as slip and fall accidents, as well as conditions that develop over time, including repetitive stress injuries like carpal tunnel syndrome. Many states also recognize occupational diseases, including illnesses caused by harmful exposures, or stress-related conditions. In most situations, eligibility for benefits does not depend on whether the employee, a coworker, or the employer bears fault for the injury. However, benefits may be forfeited if the injury was caused solely by an employee’s misconduct, such as intoxication, unlawful drug use, or intentional self-harm.

The Exclusive Remedy Rule

Workers’ compensation laws usually prevent employees from bringing direct lawsuits against their employer for work-related injuries, even if the employer was negligent. This approach is often called the exclusive remedy rule, meaning workers generally receive statutory benefits in place of pursuing private tort claims. Some states allow exceptions when the employer’s conduct goes beyond negligence and involves intentional or extremely reckless acts. An employee may be able to pursue a separate civil lawsuit in such limited circumstances, potentially seeking damages for pain and suffering or punitive damages, neither of which are available through workers’ compensation. The requirements for proving intentional misconduct or recklessness vary significantly by jurisdiction.

Workers’ Compensation Benefits

When a claim is accepted, benefits usually include medical treatment, wage replacement, and potentially rehabilitation or retraining. Medical treatment encompasses costs related to doctor visits, hospital stays, prescriptions, and physical therapy. In many states, mileage to and from medical appointments is also reimbursable. Wage replacement benefits typically provide about two-thirds of the worker’s average weekly wage for a total disability, although states use different formulas. Many states make available vocational training programs if an employee can no longer perform the same job. If an employee dies from a work-related injury or illness, many states provide separate death benefits to surviving family members, which may include partial wage replacement and coverage for some funeral expenses.

Classification of Disabilities

Disabilities in workers’ compensation are usually categorized as temporary or permanent. Temporary disability benefits cover lost wages while the employee recovers and remains unable to perform normal work duties. If the employee reaches maximum medical improvement and is unlikely to experience further recovery, the disability may be declared permanent. States usually differentiate between permanent partial disability, which allows for some form of continued employment, and permanent total disability, in which the worker is considered unable to return to any gainful employment.

Time Limits and Filing Requirements

Most states require an employee who is injured on the job or diagnosed with a work-related illness to notify the employer within a strict deadline. Each jurisdiction also has a statute of limitations for formally filing a workers’ compensation claim with the relevant state agency, which differs from the initial employer notification period. Adhering to both deadlines is important. Written employer notification, including details of the incident and injury, is commonly recommended. Employees are encouraged to record dates, times, all relevant communications, and any expenses associated with the injury or illness.

Third-Party Claims

While employees typically cannot sue their employer for work-related injuries, workers’ compensation laws do not prevent lawsuits against third parties. For example, if faulty machinery causes an on-the-job injury, an employee may have a claim against the equipment manufacturer. These separate claims may seek compensation for losses beyond what is available through workers’ compensation. Even if third-party litigation proceeds, the employee’s workers’ compensation benefits will usually continue for accepted claims, although details regarding liens or subrogation rights vary by state.

Last reviewed May 2025