Understanding the requirements and processes related to workers’ compensation can be overwhelming. As an employee, it can be difficult to know when you may be eligible to receive temporary or permanent disability benefits as the result of a work injury. As an employer, it can be daunting to navigate all the requirements for obtaining and maintaining workers’ compensation insurance for your employees.
For employers, knowing how to properly retain workers’ compensation insurance and how it should be used is an essential part of running a successful business. Not having the proper insurance coverage or keeping an injured employee from receiving the workers’ compensation benefits that they deserve, whether intentionally or unintentionally, can cause significant problems for your business. English Lloyd & Armenta can help provide some much-needed insight to help guide you through the legal processes related to workers’ compensation claims.
What Is Workers’ Compensation Insurance?
Workers’ compensation is the oldest insurance program in the nation and was accepted and implemented by most states in the early 20th century. This social insurance program requires employers to have workers’ compensation insurance to cover all of their employees, regardless of the size of their company or organization.
Injuries and illness are often a natural part of performing the duties of a job, but these injuries can be the cause of major mental, emotional, and physical stress for employees. As a way to help ease the process of recovering from a work injury, employers are required to take on the full financial responsibility for the benefits associated with workers’ compensation. There are several things that every employer in California is required to cover as a part of their workers’ compensation insurance.
What Are Employers Required to Cover With Workers’ Compensation?
Any individual or organization that employs at least one person is required to carry workers’ compensation insurance, but that does not look the same for every employer. There are three primary means of getting workers’ compensation insurance:
- A licensed insurance company can work with you one-on-one to ensure you have the workers’ compensation insurance that best fits your needs. These are privately held companies that help businesses navigate the process of setting up their workers’ compensation insurance.
- The State Compensation Insurance Fund, or State Fund, is a government entity, not a private business. This fund works on a nonprofit basis and is available to assist any business that is seeking workers’ compensation insurance. The state fund also serves as a sort of last resort for some companies or organizations that cannot receive insurance from a private insurer.
- Self-insurance is also an option available to employers, but it is not typically the recommended method. There are strict requirements in place that a company must meet before it can self-insure. These include a security deposit, a net worth of at least $5 million, and a minimum net income of $500,000 per year. Groups of employers in the same industry have developed a method of group self-insurance in recent years, but this option is typically for large corporations.
Operating your business without the proper workers’ compensation insurance is incredibly dangerous and potentially very costly. If one of your employees is injured and you do not have proper workers’ compensation insurance, you can face a fine of no less than $10,000, up to a year in jail, and additional fines adding up to $100,000 from the state of California.
In addition, if you are found to be running a business without workers’ compensation insurance, you can be fined up to $10,000 and potentially jailed for several months. You will also be required to cease all operations until the proper insurance is in place. Having workers’ compensation insurance in place is the best way to protect yourself as well as your employees.
What Does Workers’ Compensation Cover?
Workers’ compensation is meant to provide support and financial assistance to employees who have been injured while working. This could include a one-time event that causes an injury, such as a fall, or long-term exposure to something that eventually causes an injury, like hearing loss from a loud environment. There are several key things that a successful workers’ compensation claim covers:
- Medical care for both the immediate aftermath of the injury and the longer recovery time is covered by workers’ compensation. This may include visits to a doctor or specialist, any necessary medical equipment, travel costs associated with medical care, and more.
- Disability benefits are available to help relieve the financial burden of being unable to work for a period. Employees who receive workers’ compensation may be eligible for either temporary or permanent disability, depending on the severity of their injury.
- Supplemental Job Displacement Benefits provide additional financial support for workers who are unable to return to their previous employer following an injury. This helps the employee to retrain or further develop their work skills and find new work.
- Death benefits are available if an employee dies as the result of a work injury. These benefits are given to the family of the deceased to help cover any costs that result from the loss of their loved one.
The workers’ compensation insurance that employers are required to purchase covers the expense of each of these benefits if one of your employees is injured at work. It can be difficult, however, to understand how to proceed once the employee has filed their claim. You may find yourself in the difficult circumstance of needing to terminate an employee who is receiving workers’ compensation benefits, and it is important to know how to move forward legally.
Can an Employee be Terminated While They Are Receiving Workers’ Compensation?
California is an “at-will” state, so employers can terminate employees at any time and for any reason, so long as the termination falls within legal bounds. As an employer, you have every right not to hire an employee back following their time away due to a work injury if there is a legitimate reason for their termination. You cannot, however, fire them simply because they were injured at work. If you are concerned with how to handle a workers’ compensation case, contact English Lloyd & Armenta today.