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You are a responsible small business owner who takes care of your employees, does your best to provide a safe workplace, and of course, has workers’ compensation insurance. An employee comes to you with notice that he has suffered a workplace injury. Here’s what you need to know.
What Does Workers’ Compensation Cover?
Although workers’ comp procedure and the nuances of workers’ comp law vary state-to-state, in general, workers’ compensation insurance will cover the costs of lost wages and medical care due to workplace accidents or disease incurred in the course of employment.
In the case of temporary or permanent partial or total disability due to a workplace accident, the injured employee may be compensated for the loss of employment as well as the loss of enjoyment of life. The amount of disability compensation the employee will be eligible for will depend upon the severity of the disease or injury.
What Does Workers’ Compensation Insurance Not Cover?
Independent contractors, vendors, or visitors/clients.
Independent contractors, vendors, and visitors and clients of the insured employer injured at the insured’s workplace are not covered by workers’ compensation insurance. Workers’ compensation insurance covers only W-2 employees
Be advised that whether a 1099 employee is an independent contractor or an employer is up for debate. In some cases where the employer has control over the worker’s duties and owns the worker’s equipment or tools, 1099 workers have been designated “employees” by workers’ compensation courts for the purposes of workers’ compensation insurance.
Employees who are injured off-site, not performing regular duties.
If an employee is traveling to or from work and is injured, workers’ comp will not cover that. If an employee leaves the workplace during work and that departure is not part of their regular duties, any injury suffered then is not covered. Of course, if an employee is elsewhere or home and is injured, workers’ compensation insurance will not apply.
Employees who travel away from the workplace as part of their regular duties, or at the direction of their employer, will be covered by workers’ compensation insurance if they are injured. However, if they deviate from their regular duties while traveling - say, they visit a friend or go have a drink at the bar - and they are injured, this is called a “frolic.” Workers’ compensation insurance does not cover “frolics.”
Employees who are injured during work, but deviating from their regular duties.
If an employee is committing a crime at work or while working and suffers an injury, workers’ comp will not cover that. If an employee is fighting with another employee, workers’ compensation insurance will not cover any injuries suffered. If employees are playing football or basketball in the workplace parking lot and the employer does not know about it or condone it, workers’ comp will not cover any injuries suffered. If two employees engage in intimate relations in a workplace closet, and one passes an STD to another, that will not be covered.
Employees who have a pre-existing condition.
Workers’ comp insurance will not cover injuries, diseases, and conditions that the employee brings to the workplace. For example, if an employee has a history of strokes or heart attacks and has one while working, that likely will not be covered.
If an employee’s pre-existing condition is exacerbated by workplace conditions or the nature of the work, workers’ compensation insurance may cover that, partially.
What are You Responsible for as the Employer when Your Employee Reports an Injury?
Every state’s workers’ compensation scheme sets forth statutory deadlines and requirements for both employers and injured employees. First, an employee will have a specified time period in which to report the injury to you. Next, you will have a specified time period in which to report the injury to state agencies and to your insurer.
What follows is this - your insurer will inquire as to the nature of the injury or disease and how the employee was injured or contracted the disease. It will either accept the claim and pay or deny the claim, again, within a time period specified by the state in which you do business.
If the insurer denies the employee’s claim, the employee will likely retain a workers’ compensation attorney and the case will be heard in a special workers’ compensation court. This court has all of the power of a court of law, and you must comply with any directions given by the workers’ comp judge.
What Happens at Workers’ Compensation Court Hearings
As an employer, you may be required to do any or all of the following:
- Answer any and all questions asked by the insurer, in writing;
- Answer any or all questions asked by the employee’s workers’ compensation lawyer, in writing;
- Provide access to the workplace to agents of the insurer or the attorney for the employee, or even the workers’ comp judge;
- Provide sworn testimony before a workers’ compensation judge.
At this point, a decision is out of the hands of your insurer. The judge will determine whether workers’ compensation insurance will pay, what for, and in what amount. The judge will also determine whether you as an employer are required to provide “light duties” for an injured employee during their rehabilitation.
How to Avoid Workers’ Compensation Claims
A smart employer will familiarize themselves with the requirements and deadlines of workers’ compensation in their state because things do happen and you want to be prepared for the worst.
Know that your responsibilities extend far beyond just providing the safest workplace you can. Employees’ behavior is a variable you cannot control, but you can provide clear guidance as to what behavior is expected and required during work. Establishing clear and unwavering protocols for workplace conduct can protect you from what would otherwise be invalid workers’ compensation claims.
Related: Does Your Small Business Need Workers’ Compensation Insurance?
Veronica Baxter is a legal assistant and blogger living and working in the great city of Philadelphia. She frequently works with Craig Altman Esq., a personal injury attorney in Cherry Hill.