The DARB Insurance Services Blog

Basic Overview
Workers Compensation Insurance is basically a form of no-fault insurance. It
gives employees the right to collect from their employers for injury, disability,
or death when the incident occurs within the course of employment. Workers
Compensation laws are designed around the idea that employers should be
charged with the cost of most work-related injury or occupational disease
regardless of who is at fault. Therefore, there is no assumption of risk or
contributory negligence. In return, these benefits are the exclusive remedy
available to employees against employers for injuries covered by WC laws. In
other words, employees cannot sue employers in court to obtain additional
compensation.

Benefits Provided
Workers Compensation laws vary from state to state, but in general, the
benefits fall under one of four categories:
Disability/Loss of Income: This benefit basically compensates employees
who are unable to work as the result of a work-related injury. It replaces a
portion of the lost income, not all.
Medical: This benefit pays for the costs of various medical services required
because of an employment related injury. There is no upper limit or time
period limit for which these expenses will be paid.
Survivor/Death: This benefit pays the surviving spouse, children, or other
relatives of an employee when the employee’s death is the result of a
work-related injury. In general, this compensation includes a weekly stipend
and a stipulated sum for funeral expenses.
Rehabilitation: This benefit basically compensates employees for the cost of
medical rehabilitation, such as physical therapy, due to a work-related injury.
It can additionally provide for vocational rehabilitation, such as retraining for
a different/new occupation. The expenses mest be reasonably justifiable.

Compensible Injuries
Work-related injuries, in regards to workers compensation laws, must arise
out of employment and arise in the course of employment. Three factors are
used to determine if the injury arose in the course of employment- time,
place, and circumstances. As such, the injury must occur during working
hours (during the time that work is actually being performed for the purposes
of employment), and occur at the place of employment or where employment
duties are actually being performed.

The recent raids on businesses that are employing illegal immigrants highlights a growing insurance problem. Workers Compensation is a state issue and illigal immigration is a Federal one. As such, regulating it is infinitely complex.

For example, on May, 12 2008, there was a raid on an Iowa meat-packing business that turned up 389 illigal immigrants– many of whom were barely teenagers. Both documented and undocumented workers were impacted by labor abuse, and officials were deeply concerned about the violations that extended beyond the problems of illigal immigration. These issues included harsh working conditions and child welfare.

The Workers Comp system, for better or worse, is not designed to handle these situations. On the one hand, courts have ruled that all workers, including undocumented ones, are entitled to compensation benefits. Conversely, many of these workers may prefer to be paid in cash for fear of deportation.

In July of 2008, the New York Court of Appeals denied an injured workers claim of vocational rehabilitation benefits after paying for his medical bills and indemnity for lost wages. The worker, who suffered severe injuries when his hand was caught in a printing press, was denied the training benefits because the court reasoned that it was not the legislations intent to restore employment to a worker that cannot be lawfully employed in the first place.
Another problem occurs when employers hire illegal immigrants in an effort to evade the purchase of workers compensation to begin with. In 2006, an undocumented worker employed by a tree cutting service in Rhode Island was severly injured by a chainsaw. When he went to court on his hearing date, he was arrested by the feds and deported. Many believe that the owner had tipped off the feds in order to evade getting into trouble. After the community at large rallied around the injured immigrant, he was able to obtain a temporay visa. This allowed him to gain a $30,000. settlement from the employer. The employer, however, refuses to live up to the settlement agreement. Consequently, this behaviour ultimately taxes the rest of the system, and in turn, penalizes employers that choose to abide by the rules.