Workers’ compensation is a form of insurance that covers workers for workplace-related injuries or illnesses. In most places, employers must carry some workers’ compensation coverage in case one of their employees gets hurt on the job.
The amount they have to pay depends on where they live and how much money the employee makes. If you are injured at work, contact Phoenix Workers’ Compensation Attorneys for help.
Workers Compensation Coverage
According to the U.S. Department of Labor, Bureau of Labor Statistics, it pays benefits to “covered workers who are injured or killed in job-related accidents. A worker’s eligibility for compensation depends on state law.”
No minimum payment is required under state laws other than for medical care and temporary total disability benefits where” part of the employee’s wage may be covered under workers’ compensation laws.”
- The amount paid by the employer depends on the state or territory employees are employed in. The legal minimum coverage required for employers varies between states, ranging from $7,000 to just over $600,000 per year per employee, depending on which state government is setting requirements.
- However, these low figures do not mean that actual premiums are low. For example, California has one of the highest average premiums at approximately $6,600 annually. However, according to State Farm Insurance, this still only covers about 40% of what they would pay if they didn’t have insurance.
- Although many people believe that all workers or their families receive a full salary while hurt, this is not true. In most cases, they get a percentage of their compensation based on the state guidelines.
Who Pays For The Benefits
Both employees and employers pay workers’ compensation, although there are some exceptions to this rule. Employers are still required to have workers’ compensation coverage in California even if they do not have any employees. However, in New Mexico, it is only mandatory for businesses with six or more employees.
Different tax codes apply based on state requirements, but since most states follow the IRS code, the table below does not include state taxes. Some people may be exempt from paying taxes on their payments, including non-resident aliens, members of certain religious groups, part-time employees, or subcontractors.
The percentage of pay that employees receive is based on the state in which they are employed.
For example, if your pay before taxes is $1,000 per week and you have a disability that lasts for half the time you usually work, workers’ compensation would be 50% of your salary.
If this were New York State, you would get 50% of your weekly wages or $500 for up to 200 weeks. After 200 weeks, your benefits change to several options, including lifetime payments equivalent to 2/3 of what you received while working full-time minus any workers’ compensation payments made during their disability times three.
If you are injured while working, then workers’ compensation can help pay for your medical bills, partial salary during recovery and may also provide lifetime benefits.