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How Workers’ Compensation Payments Work: Understanding the Process

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As an employer, workplace injuries are some risks your company has to deal with. When an employee is injured in the line of duty, you have to compensate them for their healthcare expenses, loss of income, and other costs. This is why the vast majority of states legally require employers to purchase workers’ compensation coverage.

As an employee, you might also be interested in knowing how the worker’s compensation process occurs. So that if ever find yourself needing to file a worker’s comp claim, you’ll know exactly what to expect.

The Onset of Workers Compensation Payments

One of the most frequently asked questions is when workers’ compensation payments begin.

While specific laws addressing the issue might vary from state to state, generally the employer must start paying for the injured employee’s medical bills as soon as they start treatment.

And when do the medical bill payments stop? Often, it’s after the injured worker has recovered fully. In some states, such as Pennsylvania, injured employees can receive payments up to 500 weeks or until fully recovered.

Of course, medical bills aren’t the only expense an injured employee will incur. There are non-medical expenses, such as benefits for lost wages and transportation costs, that must be paid. Typically, this will be settled after acceptance of the workers’ compensation claim by the employer’s insurance coverage provider.

The employer or the insurance company can make these payments in installments or in a lump sum.

Are all Employee Injuries Eligible for Workers’ Compensation Payments?

Accidents are part of life. Where does your liability as an employer end?

Generally speaking, an employee must sustain an injury when working for the employer to be eligible for these benefits. For example, if an employee is hurt when loading boxes at the warehouse, the employer would be liable. However, if they get into an accident when getting a lunch break outside of your premises, it’s likely that they won’t be eligible for workers’ compensation.

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After an employee reports an injury, it’s procedural to conduct an investigation to establish the facts of the accident. It’s not uncommon for some workplace injuries to be found ineligible for compensation.

For example, suppose a worker was hurt on the job but wasn’t wearing the appropriate protective equipment that the company has provided, or they were operating a machine they aren’t authorized to operate. In that case, the employer might have a strong case against the injured employer’s compensation claim.

Are Workers’ Compensation Payments Taxed?

Generally, workers’ compensation payments are tax-exempt. As an injured worker, you can expect to receive the entire amount — through a worker’s compensation lawyer (if you have one) will take a portion of the amount as their payment.

Understand Workers Compensation

Whether you’re an employer or an employee, having a good understanding of workers’ compensation payments is essential. With this guide, you now have the most important information on the subject.

How Workers’ Compensation Payments Work: Understanding the Process

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