Workers Compensation: Understanding Employer Responsibilities

Employers have countless obligations, from procuring workers’ compensation insurance to reporting incidences and processing claims. Unfortunately, some employers fail to meet these commitments, denying benefits to their employees and exposing their companies to damaging lawsuits.

Understanding all the legal obligations and finding an affordable plan can be daunting for employers, which is why they should consider workers’ compensation from a Professional Employer Organization (PEO).

What is the Employer’s Responsibility When a Worker is Injured?

Worker’s compensation helps the employer provide the appropriate medical and financial assistance after injury, along with getting them back to work as quickly as possible. Here’s what employers need to know about their workers’ comp responsibilities.

Workers Comp Employer Responsibility: Providing Coverage

Most states require the employer to procure workers’ compensation insurance. The compensation system in some states exempts certain professions and industries from the obligation and allows financially capable employers to self insure.

A good policy should cover medical treatment for injuries and compensate for lost wages while the employee is still out of work.

By design, the worker’s compensation coverage should have the following features:  

1. Medical Coverage pays for the expenses incurred in diagnosing and treating job-related injuries and ailments.
2. Partial Disability Claims coverage should compensate employees who shift jobs because their injuries do not allow them to continue with their current occupation.
3. Full Disability Claims compensate employees unable to resume work because of permanent incapacitation from a job-related injury.
4. Rehabilitation / Retraining compensation covers the training and rehabilitation expenses incurred when getting a worker back to work after a long-term injury.
5. Death Compensation is paid to eligible family members when an employee loses their life from a work-related injury or illness. It will cater for loss of income, funeral costs, and any other expenses following the incident.
   
   

Workers Comp Employer Responsibility: Ongoing Duties

Under most worker compensation laws, the employer needs to perform the following duties in addition to providing coverage:

1. Display a notice of compliance with worker’s compensation laws in a visible place.
2. Provide medical first-aid for workers injured at the workplace and send them for further medical treatment when required.
3. Maintain a record of work-related injuries.
4. Complete an injury report and mail it to the nearest workers’ compensation board office. Send a copy to the insurer within 48 hrs of the incident.
5. Comply with requests for further information from the insurer or investigating authority. Most insurers will want to know the employee’s working conditions and earnings at the time of the incident to determine the compensation.
6. No Retaliation: Retaliation is when an employer punishes an employee for exercising their rights under workplace compensation laws. Indeed, some employers disapprove of employees who file workers’ compensation benefits claims, responding with discriminatory practices, harassment, or unjust termination. Most state laws protect employees from these actions, allowing them to sue for retaliatory discharge.
   
   

Workers Comp Employer Responsibility: Handling Workers’ Comp Claims

An employer’s first responsibility is to provide employees with a safe work environment. Employers must have a clear avenue for reporting workplace-related injuries should they happen, and they should maintain an official record of all injuries.

When an employee is injured at work, the employer needs to fulfill the following responsibilities to ensure the best possible outcome for both parties:

Conduct Investigations

Employers should conduct an appropriate investigation for all workplace compensation claims. Besides, the outcome would help them resolve any issues responsible for the workplace accident. If an employer finds a valid reason to deny the claim, they should clearly state the facts from their investigation.

Provide List of Approved Healthcare Providers

Some states allow employers to pre-approve healthcare providers who attend to their injured workers. The list should be displayed at a conspicuous place, and if not, they should share it with the employee on reporting a work-related injury or illness. If the employer fails to provide a list with the appropriate medical attendants, the employee has a right to seek treatment elsewhere.

Handle Claims in Good Faith

Denying benefits without a valid cause and paying a lower benefit than what is actually owed are all acts of bad faith and grant the employee a right to legal action.

What Happens if Employers Fail to Uphold Their Workers’ Comp Obligations?

In most states, an employer who knowingly fails to provide workers’ compensation insurance will be penalized under a class A misdemeanor. Subsequent violations may be treated as a felony. Employees can report employers to their local workers’ compensation board office.

Workers’ compensation is treated as an exclusive remedy for injuries at the workplace. An exclusive remedy is a provision that protects employers from legal action as long as they compensate the employee for medical expenses, lost wages, and any related costs.

However, some states still allow employees to bring legal action for negligence and claims handled in bad faith.

Why get workers comp coverage from a PEO?

Professional Employer Organizations can minimize the costs associated with purchasing workers’ compensation. They can get better deals by taking advantage of economies of scale. You may also get flexible payment options for premiums.

PEOs dealing with workers’ compensation can protect you from legal compliance issues because they are well-versed with state labor regulations. PEOs can also represent the employer at hearings. In time, your costs will drop because they’re better at challenging invalid claims and controlling premiums.

Partnering with a PEO frees you to focus on your core business needs, leaving them to handle the challenging obligations of worker compensation. Besides the cost-cutting benefits, they can help you develop proper safety programs and better return-to-work policies for injured employees.