Workers’ compensation is a form of insurance available to workers to cover the costs and expenses incurred in relation to on-the-job injuries and illnesses. It may even cover injuries incurred when an employee is en route to work or carrying out work-related projects off-site. The insurance premiums are paid for by the employer, not by the employee, and the employer is required (by law) to make payments to employees whose injuries have been caused at work.

The federal government has its own workers' compensation insurance for federal employees, but every state will also have its own workers' compensation insurance program. The extent of the coverage, employers’ obligations, deadlines for filing, payment and appeal will all be set out in your state's local compensation laws.

Are all injuries at work covered?

No. Although there is a very wide range of injuries that can be caused at work, not all of them are capable of attracting compensation. Workers' compensation insurance is meant to cover your injuries that are caused by the carelessness of the employer or an employee in relation to you. Although most injured employees will receive compensation regardless of who was at fault, your own carelessness or misbehavior may also be a determining factor. For example, your state may – as a rule – impose drug and alcohol testing on injured employees. If the test results prove that you were under the influence at the time that you sustained the injury, the state may deny your claim for workers' compensation benefits. Your claim for compensation may also be denied if your injuries were self-inflicted, or occurred while you were committing a crime or acting in breach of company policies.

Are all costs and expenses covered?

No. If it has been determined that you are entitled to workers' compensation payments, you can expect to be covered in terms of:

  • Medical expenses that are necessary to diagnose and treat your injury.
  • Replacement income: Wage replacement is usually two-thirds of the worker's average wage, although there is a fixed maximum amount that the benefits cannot exceed. After a few days of missed work due to the illness or injury, an employee becomes eligible for wage replacement. These benefits are not taxed.
  • Retraining costs: The expenses incurred in trying to get you back to some form of work.
  • Compensation for permanent injuries.
  • Benefits to family members of workers who are killed on the job.

Workers' compensation insurance is not just payable for one-off incidents. You may, however, be entitled to be covered for illnesses developed over a long period of time from doing the same injurious activity, such as repetitive strain injury to the wrists.

What costs and expenses are not covered?

Workers' compensation benefits do not cover costs that are attributed to your pain and suffering, or mental anguish. However, this does not mean that you have no recourse to compensation for any pain and suffering endured as a result of your injuries or disablement. The general rule is that workers' compensation removes the need for the employee to go through the protracted and expensive matter of suing their employer in court.

If you are injured because your employer or an employee acted in a negligent or reckless manner, you can avoid the general rule and sue your employer in court. For example, if your employer orders a security guard to detain you and he throws you to the ground, causing injury, you may be able to sue outside the workers' compensation program. You will need to check that your state allows for this departure from the general rule. If it does, you can sue your employer for a wide range of damages, including pain and suffering, mental anguish and even punitive damages:

1. Pain and Suffering
These damages cover the mental and emotional distress caused by an accident, injury or circumstances closely related to the injury. The damages may include monetary amounts to cover: scarring, residual or chronic pain, physical or mental limitations (like difficulty picking things up after an arm injury or difficulty with your memory after a head injury), depression, embarrassment or other emotional responses to the loss of mobility, paralysis or disfigurement. The specific experiences of pain and suffering damages will differ from injured employee to injured employee, and the court will consider the experience of that particular individual. The damages are not easy to calculate because rarely will you have medical bills or payslips to offer as evidence.

2. Mental Anguish
There needs to be some strong evidence that shows that mental anguish was incurred. This type of anguish could include emotions/mental states such as grief, despair, severe disappointment, public humiliation/shame or wounded pride. Usually, there needs to be more than the injured employee claiming to have suffered mentally. External evidence would also be required, for example, from doctors and other witnesses.

3. Punitive Damages
Punitive damages are not intended to compensate the injured employee. Courts will order punitive damages where it is felt that the employer’s poor behavior merits monetary punishment. It also serves as a deterrent to other employers who may be undertaking similar bad practices in the workplace. There is no rule as to the appropriate amount of punitive damages that should be awarded in any lawsuit, or how that amount should be calculated. All cases are judged on their merits.

If you believe that your claim for workers' compensation is taking too long to be considered, or if your claim has been rejected, you should consider consulting an attorney who specializes in the field.

You can check your own state's workers' compensation benefits laws from the Department of Labor's guide to workforce programs and services.