We’ve all heard of workers’ compensation, but do we really understand what it does or how it works?

America’s workers’ compensation system has its roots in the early 20th century. Prompted by outcry over workers’ conditions, states and the federal government began to look into mandating compensation for on-the-job injuries. The first comprehensive workers’ compensation law was passed in Wisconsin in 1911, and nine other states quickly followed suit. The final state to pass workers’ compensation legislation was Mississippi in 1948.

Workers’ compensation in itself is a form of tort reform in that it limits workers right to a jury trial. Workers’ compensation is an agreement between an employer and employee that in the event the employee is injured on the job, they will receive compensation for their injuries through the state’s workers’ compensation system instead of through our civil justice system. If there is a disagreement over benefits, special workers’ compensation courts handle the dispute. They cannot sue their employer.

Under the law, workers are entitled to benefits or compensation if they’re hurt on the job or develop a work-related illness that prevents them from working. The benefits workers are entitled to include:

  •  Lost wages from missed work
  • Medical care (includes doctor visits, surgical expenses, hospital expenses, prescriptions, mileage expenses, orthopedic devices, and durable medical equipment)
  • Compensation for specific losses, such as the loss of a limb or its use
  • Compensation for severe disfigurement or scars
  • Coverage for participation in certain physical or vocation rehabilitation programs
  • Death benefits, such as payment of burial services

Workers’ compensation claims do not take pain and suffering or non-economic damages into account.

Benefits are paid by employers through a private insurance company, the State Workers’ Insurance Fund, or by the employer if the company is self-insured.

Most importantly, employers in Pennsylvania are required to maintain workers’ compensation. Much like the requirement that all drivers carry car insurance, every employer must maintain workers’ compensation. If an employer does not carry workers’ compensation coverage, injured employees can file suit in civil court. Employers operating without coverage also risk stop-work orders, fines, injunctions, and assessments.

Now that you know the basics of what workers’ compensation is, who it protects, what it covers, and how it’s administered, learn more about the different types of workers’ compensation claims.