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Workers' Compensation: Federal

Workers' Compensation requirements by state

Authors: Daniel O'Brien and Nicole Farley, Fisher & Phillips, LLP


  • Workers' compensation provides benefits to employees who are unable to work due to an injury or disease that arises out of and in the course of employment. See Compensable Injuries.
  • Workers' compensation benefits include compensation for medical treatment and loss of wages. The calculation of wage benefits and the method of payment vary from state to state, but the majority of compensation paid involves temporary total disability, permanent partial disability, permanent disability and/or death benefits. See Compensable Injuries; Medical Benefits and Communication With Health Care Providers; Amount of Compensation; State Requirements.
  • Workers' compensation law is rooted in the concept of no fault - meaning, an employer must compensate an employee who is injured or becomes ill on the job due to the performance of the employee's job duties, regardless of who is at fault or who caused the harm. In exchange for a no-fault system, an employer receives immunity from civil litigation for any negligent act that results in an employee's work related injury or illness. See History of Workers' Compensation.
  • There are six major federal laws that provide workers' compensation for specified injured employees. If an employer is not covered by one of these federal programs, state law will apply. See Federal Workers' Compensation Programs.
  • Most workers' compensation programs are created and governed by state law. State regulations generally define the types of compensable injuries and illnesses, the amount of wage replacement, the waiting periods before benefits start and the procedures for filing claims. The rules and regulations of each state's administrative process vary greatly from state to state. See Administrative Hearings and Court Proceedings; State Requirements.
  • In deciding if an employee's injury is compensable under workers' compensation, the main focus is on whether there is enough evidence to show a connection between the injury and the employee's job. State law varies on this matter. See Covered Employees; Compensable Injuries; State Requirements.
  • Employers can contest workers' compensation claims for several reasons, which depend on the employer's geographic location. For example, in some states, an employee's misconduct is a defense to a workers' compensation claim, whereas in other states it is not. See Reasons to Contest Workers' Compensation Claims; State Requirements.
  • Employers can purchase or provide workers' compensation coverage through individual insurance companies, state funds or self-insurance plans. Four states have 100% state run insurance monopolies, 11 have a combined state and private competitive system, while the remaining 35 states leave workers' compensation solely to private insurance companies. North Dakota, Ohio, Washington and Wyoming are the states that are "monopolistic" and require employers to purchase coverage through a government sponsored state fund. The only exception to acquiring coverage through those funds is self-insurance. See Insurance; State Requirements.
  • Getting and keeping workers' compensation insurance is a significant expense for employers; however, there are several methods that an employer can utilize to lower its workers' compensation costs. An example is the establishment of an effective return to work program. See Methods to Reduce Workers' Compensation Claims and Costs.
  • It is critical for an employer to properly investigate and document a workers' compensation claim. It is also important for employers to evaluate a workers' compensation claim for fraud. See Proper Investigation of a Workers' Compensation Injury; Preventing Workers' Compensation Fraud.
  • Employers must properly document and retain records relating to workers' compensation claims. Because workers' compensation claims typically include medical information, some state and federal laws provide special protections for this type of information. See Recordkeeping.
  • Supervisors play an important part in preventing and managing workers' compensation claims. A supervisor's actions can minimize or exacerbate a workers' compensation claim. See Supervisor's Responsibilities.
  • Workers' compensation typically does not operate in isolation. Employees that suffer a work related injury usually have rights under other statutes, such as the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). It is crucial that employers are aware of how these statutes interact in order to be in compliance with the various laws. See Interplay With Other Laws.