Before 1911, the working conditions of employees in the United States of America were not very impressive. Things were worse for workers employed under powerful employers. During this era, employers did not offer any compensations for injuries incurred by an employee within the scope of performing a job.
The employees had to legally file a lawsuit against their employers, which was a rare case. A very few employees could file a lawsuit because of the expense. The chances of them winning the case were not that strong. The employers used strong defenses such as Contributory negligence, assumption of risks, or fellow employee negligence, which were very difficult to overcome.
Workers’ Compensation Insurance
Workers’ Compensation laws, referred to as the Grand Bargain, were introduced in 1911. It was after these laws the workers began to receive their due rights. The workers’ compensation insurance is a bargain between the employers and the employees. An employer provides the workers the benefits if they get injured, fall ill or die while on the job, and in return, the employers are safe from a legal lawsuit.
Types of Workers’ Compensation Insurance
There are different types of workers’ compensation insurance, including;
Medical Treatment
For injuries that need medical treatment, an employer is expected to pay for all the medical treatments required. If the recovery time exceeds the waiting period, an employer must also pay cash benefits for the time an employee misses the work. It is to cover up the lost income while an employee is unable to work. An employee who recovers within the waiting time gets medical treatment benefits only.
Rehabilitation
There are injuries when simply treating them with medical treatments is not enough. Sometimes for recovery, along with medical treatment, some rehabilitative services are required. In this case, an employee will have to cover the cost of all the rehabilitative therapies. Also, suppose the injury has caused an individual to be unable to return to the pre-injury job. In that case, workers’ compensation will provide benefits so that the individual can train for another position.
Disability
Four types of disabilities lie under workers’ compensation insurance. These four types include; temporary partial disability, temporary total disability, permanent partial disability, and permanent total disability, and based on these, the employer provides the benefits.
Temporary partial disability is when an employee cannot perform some tasks of the job for a specified period, temporary total disability is when the injury restricts a worker from doing the total job for a limited time. The permanent partial disability restricts a worker from doing some job tasks forever. In contrast, the permanent total disability means that an employee is no more capable of the pre-injury job.
The benefits paid to depend upon the income that the employee received before the injury. Generally, the amount is equal to two-thirds of the wage. An employee is not expected to pay tax over this income.
Death
If an employee dies during work in an unfortunate situation, a company is expected to pay death benefits to the deceased employee’s family. Spouse, children, parents, or siblings are the expected beneficiaries of these benefits. Some states also cover the funeral and burial costs. The total cost of these benefits depends upon how much a deceased employee contributed to the lives of their dependents.
These are the four basic types of insurance. The provisions of each of these types differ in every state. As the state is the body that sets the laws, all the states have different policies. Even though injuries are unexpected, an employer reserves the right to terminate an individual if they do not return to work for a long time.
In Georgia, it is a legal step to fire an injured employee. Therefore, both the entities, the employer, and the employees must know about their rights and responsibilities when it comes to workers’ compensation.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
