Workers' compensation is a "no-fault" system that protects employees injured on the job by guaranteeing medical treatment and payment for lost wages while they are out of work because of a work-related injury or illness. The employee does not have to prove that the injury was the employer's fault to receive benefits. At the same time, employers are protected from legal fees and large jury awards that could result if employees could sue for work-related injuries and illnesses.
For most employees, state workers' compensation statutes define the injuries covered, benefits levels, and how claims are filed, contested, and settled. Even though workers' compensation laws provide the exclusive remedy for job-related injury and illnesses, employees might still be covered by the Family & Medical Leave Act (FMLA) or the Americans with Disabilities Act (ADA).
Premiums for workers' compensation insurance have risen at an alarming rate over the last decade, making cost-control measures a priority for employers.