Worker’s Compensation laws continue to grow more and more complex, not to mention more numerous. Understanding worker’s compensation laws is crucial to controlling your business costs and maintaining compliance with the law. Failure to understand worker’s comp can cost employers significantly in terms of time, fines and attorney’s fees.

Leaves of Absence

Familiarize yourself with your responsibilities under the federal Family and Medical Leave Act (FMLA) and other leave-related laws specific to your state. When employees take time away from work for illness or injury that is work-related, these absences are not included under FMLA. Employers must explain to workers that worker’s compensation leave that qualifies under FMLA runs concurrently for up to twelve weeks. FMLA leave is not added to workman’s comp leave.

Employee Health Benefits

Employers that provide health plans that fall under to the Early Retirement Income Security Act (ERISA) are not required to continue providing health benefits during the duration of an employee’s worker’s comp leave. For employees taking medical leaves that are not job-related, you must continue providing their benefit for only as long as your policies and procedures require you to. When benefits expire, however, the employee will still be able to obtain benefits under COBRA.


When a worker experiences serious injury or dies as a result of a work-related accident, this must be reported to your state Occupational Safety and Health Administration (OSHA) office within 8 hours after you know about it. You may hold off until the incident has been investigated and all the details identified so long as you make the 8-hour deadline. If you fail to report the incident it can cost you heavy fines or even criminal prosecution.

You do not have to report minor cases in which only first-aid was administered or the worker returned to work after treatment by a physician without loss of time after the date of the injury. You may pay the doctor for services if you wish to avoid payment through workers' compensation carrier or insurance carrier, but you still have to file a Doctor’s First Report with OSHA.

Choice of Physician

As employer, you have the right to select the doctor who will help employees who become sick or injured as a result of a work-related incident. You may insist the employee use the company doctor for the first 30 days after the incident so long as your employee hasn’t previously designated his personal physician. If you provide occupational health services through an HCO and the employee hasn’t previously designated a physician, you have control up to 90 days if you don’t provide health insurance. If you do, your control continues for 180 days. Having an HCO that provides occupational health services to your company can help you control costs, especially if your employees work in an industrial environment where injuries are more likely to happen.

Rate of Pay

If an employee is injured and able to come to work, but only on light or modified duty, his or her employer is only obligated to pay at the normal rate for work of that type. The employee who is offered temporary modified duty at lower pay may still receive partial temporary disability pay through worker’s compensation to make up the difference.

Off Premises Injuries

Workers' compensation insurance only covers injuries that happen at the job-site. The only time injuries occurring elsewhere are covered is where the injury arises out of employment and in the course of that employment. If the employer controls the employees method of commuting or his route to work, if he is allowed to engage in work activities such as answering calls or tele-commuting, if he is traveling for work purposes during work hours or visiting outside locations as part of his duties, then injuries received as a consequence are covered under workman’s comp. Be careful when writing policies and procedures and giving employees instructions. Avoid setting up situations where employees are covered by your worker’s comp insurance in places where you cannot exercise reasonable safety protocols.


Work-related and even non-work-related stress often leads to worker’s compensation stress claims. Watch workers carefully and document any signs of occupational stress-inducing job conditions. Act quickly to reduce stress levels for employees showing symptoms of stress by reassigning them to other less stressful work, acting to reduce exposure of workers to the stressor or encouraging stressed-out workers to take accrued vacation or leave time. Also, don’t fail to document any evidence that the employee is experiencing personal stress outside of work that is impacting his performance and/or safety on the job. Talk to the employee about your concerns and document the meeting.

Individuals you have employed for less than six months will not be compensated for work-related stress, unless it can be shown that the stress resulted from “a sudden and extraordinary employment condition.” Always act quickly if a new employee seems over-stressed by the job. Employers who discipline, counsel and even terminate such employees, provided such actions are done in good-faith, meet the requirements of the law and are non-discriminatory are not liable to stress-injury claims under worker’s comp.

Employing Injured Employees

An employer may refuse to continue employing an injured employee until he or she recovers fully from the injury. Employees ruled disabled by their injuries will be considered disabled under state and federal law and you will be required to provide reasonable accommodation to any worker who can still perform the essential functions of the job with accommodations. You do not have to displace another employee or create a new position for the worker who is disabled if they cannot do their old job, but if you fail to make reasonable accommodation, under the Americans with Disabilities Act (ADA), you can be sued under both worker’s comp and ADA at the same time. This issue can be incredibly costly and stressful, and should be avoided at all costs.

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