Statutory workers' compensation refers to the laws and regulations that form the framework for a workers' compensation program. Although the workers' compensation program is national, each state is responsible for implementing its own workers' compensation statutes. This means every aspect of workers' compensation, from who qualifies for coverage to the maximum amount of money awarded, can vary from state to state.
Before there were workers' compensation laws, injured employees could only seek relief by suing their employers through the civil courts. The courts often sided with the employers, leaving the employees without incomes. When employees were successful, however, employers were often forced to pay large sums of money.
In the early 20th century, the government stepped in to create a social insurance program to protect both employees and employers. This statutory workers' compensation program gives injured employees an absolute right to medical care in exchange for forgoing their right to sue their employer.
Statutory workers' compensation is a no-fault system, meaning the employee doesn't have to prove the employer is at fault to receive benefits. In many states, employers pay for workers' compensation with insurance premiums paid to statewide workers' compensation funds. In other states, employers are permitted to self-insure and pay the claims themselves.
State statutes determine how most workers' compensation programs are run. Federal statutes are limited to programs for federal employees and employees involved in significant interstate commerce (e.g., railroad or marine workers).
If an employee is injured at work during working hours, over a lunch break, or while traveling for work, he or she is entitled to workers' compensation benefits. An employee is also entitled if diagnosed with an occupational medical condition, such as hearing loss or an occupational disease due to exposure to hazardous substances. Most employers with more than one employee are required to provide workers' compensation. Some employees, such as partners or directors of a business, may be exempt from workers' compensation benefits.
Statutory workers' compensation benefits can include:
Medical care. Hospital and doctor costs, treatment expenses, and medication costs.
Temporary disability. A percentage of the employee's wages paid during the time an employee is unable to perform his or her duties.
Permanent disability. A fixed monetary amount based on the nature and extent of the employee's injuries or illness.
Death benefits. Compensation for dependents of employees killed as a result of a work-related accident or illness.
Each state's laws set maximums for the amount of money that may be paid for temporary and permanent disability. The laws also outline medical benefits that are payable.