Workers’ compensation is a state-mandated system that provides medical and wage-replacement benefits to employees injured or made ill on the job. For employers, it also typically provides a degree of protection from lawsuits for those injuries.
Workers’ compensation is a state-mandated system that provides medical and wage-replacement benefits to employees injured or made ill on the job. For employers, it also typically provides a degree of protection from lawsuits for those injuries.
Workers’ comp generally covers reasonable medical care for work-related injuries and illnesses, a portion of lost wages during disability, and rehabilitation costs. In exchange, employees usually cannot sue the employer for those injuries, subject to state law.
Most states require employers to carry workers’ comp once they have employees (some states have exceptions for very small numbers or certain roles). Requirements and benefits vary by state. Sole proprietors and partners may be able to elect coverage for themselves.
Carrying workers’ comp helps you comply with state law, supports injured employees, and can limit your exposure to lawsuits over workplace injuries. Failure to carry required coverage can result in fines and loss of protections.
Many states require coverage from the first employee. Some have narrow exemptions (e.g. domestic workers, certain agricultural workers). Check your state’s rules or ask an agent.
Generally, workers’ comp applies to employees, not true independent contractors. Misclassifying employees as contractors can create liability and compliance issues. When in doubt, discuss with an agent or legal advisor.
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