4 Legal Facts Businesses Should Know About Workers' Compensation

4 Legal Facts Businesses Should Know About Workers' Compensation

Daniel Hall 18/07/2022 1
4 Legal Facts Businesses Should Know About Workers' Compensation

Despite how laws vary from one region to another, all states have laws that require employers to provide their employees with workers’ compensation.

Good employers strive to maintain a safe environment for their staff to work and thrive in. Despite this, accidents are unfortunately bound to happen. Even though this isn’t a scenario most want to think about, it’s absolutely necessary that you be made aware of what laws are in place when it comes to workers’ comp, and how they affect you as a business. 

Here are four legal facts that businesses should consider when it comes to workers’ compensation. 

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1. Workers’ Compensation Doesn’t Need to Cover All Injuries and Illnesses 

The entire purpose of workers’ comp is to provide benefits to employees who have suffered an injury or have become ill due to a work-related cause. When you think about workers’ comp, you typically think about things like missed wage replacement, disability benefits, as well as death benefits. There is a myriad of things that workers’ comp covers, but it may be good to also learn about what it generally does not cover. 

Workplace incidents are typically judged on a case-by-case basis. This is why you can never know for sure if something must be covered by workers’ comp until the actual case is presented to you. Nevertheless, here are some things workers’ comp generally doesn’t cover. 

  • An employee engaging in illegal activities. 

  • Employees were injured while violating company policy. 

  • Employee instigates or participates in horseplay. 

  • The employee is intentionally intoxicated. 

  • Employees’ intent to injure themselves or someone else. 

  • The employee is driving to or from work and suffers an accident in the process. 

  • The employee has been fired from their position and then becomes injured. 

2. Workers’ Compensation Benefits May Be Taxable

Generally, workers’ comp benefits are exempt from taxes, but not always. This generally depends on whether said employee is receiving financial support from elsewhere or not. It’s always a pain to deal with taxes, so it’s a good idea to consult with a local lawyer on what the law is for your state. 

3. Laws Vary From State to State

As previously mentioned, laws on workers’ comp vary from one state to the other, because it’s regulated by state governments. You should get some workers compensation legal advice from a local attorney so that you are completely sure that you’re complying with the local laws and regulations. The key word here is “local”. 

A lawyer from Indiana can’t deduce whether you’re all good with the law in North Carolina. If they say they can, they’re probably lying. Consult with a local lawyer, and get the answers you need. Workers’ comp insurance is fully paid by the employers, so it’s important to know your local laws and regulations. 

4. You Must Offer Compensation, And Here Is Why 

You might wonder if having workers’ comp benefits for your employees is truly necessary. After all, some states are much more lenient about these laws than others. Can you get away with not complying? 

Well, the short answer is no. The long answer is technical, you can try, and you can succeed. Only, for a very short amount of time. You can pay a fine of up to $2,000 for every 10 days without workers’ comp insurance, which doesn’t include other fines that might get added. Not having workers’ comp insurance when your business employs more than 5 people is a felony, with 5 or fewer being a misdemeanor. 

In the end, you’ll ultimately get hit with a stop-work order, and be forced to comply or cease operations. The business owner becomes directly liable for the costs that would have otherwise been covered by workers’ comp insurance. 

Additionally, having workers’ comp benefits is how businesses don’t get sued every time an employee suffers a workplace injury or illness. If employers violate workers’ comp laws, they can be fined, jailed, and even sued. You could get hit with a lawsuit by an employee who is looking to cover their medical expenses. It’s simply not advisable to roll the dice when it comes to workers’ comp insurance. 

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Workers’ comp benefits are not only beneficial for the employee. They’re beneficial to the employer, too. When a workers’ compensation case is filed, not one party is found to be completely at fault. The amount received by the employee is not increased by the employer’s carelessness or decreased by the employee’s fault. Ultimately, it’s a compromise between both parties, and it’s one that you, as a business, should learn all about.

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  • Mike Manley

    I’m unfamiliar with any circumstances where WC benefits are taxable. It would be nice to describe such a situation, so the reader can understand the scope of this exception.

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Daniel Hall

Business Expert

Daniel Hall is an experienced digital marketer, author and world traveller. He spends a lot of his free time flipping through books and learning about a plethora of topics.

 

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