Table of contents
What is Compensation?
Let’s start with the term of compensation. When talking about compensation, we usually mean the payment received by an employee from an employer in the form of a salary, wages, benefits, and variable pay. However, it’s important to note that compensation can also refer to money that is paid to someone for something that has been lost or damaged, such as “workers compensation” for unemployed or injured workers.
It can also refer to a payout as the result of a lawsuit. In a more general sense, compensation can mean anything of value given to make up for a loss. The word compensation comes from the Latin verb “Compensare”, which means to “weigh against”.
Compensation usually takes the form of monetary payment exchanged for time, labor, and expertise.
The different types of compensation include
- Hourly Wages
- Sales Commission
- Stock Options
- Incentive Pay
- Other Variable Pay
- Benefits (healthcare, paid leave, etc.)
- Non-monetary compensation (recognition, meals, etc.)
What is Workers’ Compensation and how does it work?
Workman’s comp is defined in every state law, and it provides benefits to workers that were injured during work hours. This is like a lifeboat for those injured workers that have been temporarily or permanently disabled.
The compensation covers medical expenses and wages. However, the law may vary in different states. You should make yourself familiar with this law if you are working in a potentially harmful work environment.
Despite some variations, some core concepts are usually the same in each state. In most cases, the injured worker is not obliged to prove fault or negligence of the employer. Workman’s comp is available to anyone with just a few exceptions.
Who Pays for Workers’ Compensation Benefits?
Employees are not responsible for paying for workers’ compensation benefits. Employers who do not pay for benefits typically purchase workers’ compensation insurance to cover the benefits for employees.
Do I Have to Have Workers’ Compensation Insurance?
In most states, any employer with one or more employees is required to carry workers’ compensation insurance. There are typically two options for buying workman’s comp insurance:
- Private insurance companies.
- State-funded programs.
What affects the Workers’ Compensation Insurance Cost?
Your cost for workers’ compensation insurance depends on your business’ unique risks. So, there’s no standard cost for workers’ comp insurance or workman’s comp.
Several factors affect workers’ compensation costs, such as your:
- State’s laws
- Business’ size
- Type of work
- Claims history
What is Workers’ Compensation and what does it cover?
Most states require employers to provide workers’ comp insurance to employees. It gives your employees benefits if they get injured or become ill from their work.
It can also provide death benefits to your employees’ beneficiaries if they pass away from a work-related injury or illness.
Workers’ comp benefits vary from state to state, but they usually help cover:
- Medical expenses such as hospital visits, medications, and emergency surgeries.
- Lost wages if your employee takes time away from work to recover.
- Ergonomic accommodations when your employee returns to work.
- Disability benefits if a work-related injury causes a partial or permanent disability.
- Ongoing care costs such as physical therapy.
Keep in mind
Once the worker’s compensation has been settled, if there comes to an injury or even death, there are several types of compensation that can be given.
“If it is a minor injury you might get paid weekly for your inability to work. Another option is to have all your hospital, medical, and home bills paid until you recover.”
The compensation is design to give you a percentage of your paycheck, so you have enough funds until you are ready to come back to work. some paperwork to sign, among which is workers’ compensation policy.
Keep in mind that you should carefully read it especially in potentially harmful work environments (construction work, loud environment). You need to know what you are signing, as most people just sign without even glancing at it.
You might sign that you will n0t sue the company in cases of injury or employer negligence. Whatever type of form you sign it will dictate the process of your compensation benefits in case of injury.
“That is why it is very important to carefully read what you are signing, as u might unintentionally give up on important rights.”
In case of death, the worker’s comp insurance is there to cover you and your loved ones. Most of the time there is a bonus for funeral fees. The rest of the insurance goes to your family until they receive a proper source of income.
You should notify your family and your lawyer about these compensations in cases of a tragic turn of events. Your loved ones will not be able to think straight at times like that so your lawyer will know what to do.
It is necessary that you take these steps as they can save you a lot of stress. If you have some questions regarding the workman’s comp feel free to contact us.
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