WORKERS' COMPENSATION
Workers' compensation is employer-paid insurance that provides cash benefits and medical care for workers who become disabled because of an injury or sickness suffered because of their job. If death results, benefits are payable to the surviving spouse and dependents.
Employers without workers' compensation insurance are subject to fines, criminal prosecution, and civil liability. Employees of businesses conducted for profit and certain farm workers must be covered by workers' compensation insurance; but independent contractors are not covered. (See Chapter 17 for a discussion of how the Americans with Disabilities Act affects workers' compensation.)
Penalties
Failure to provide workers' compensation insurance coverage can result in
- fines,
- criminal prosecution,
- personal liability of the employer for any workers' compensation benefits due injured workers, and
- an employee's exercising the option to sue the employer rather than file a compensation claim.
Duties
Employers must perform the following duties:
- Post a notice of compliance in a conspicuous place at each job site.
- Provide immediate emergency medical treatment for employees who sustain on-the-job injuries.
- Furnish further medical attention if an injured worker is unable to select a doctor or advises the employer in writing of a desire not to do so.
- Complete a report of the injury and mail it to the nearest workers' compensation board office. A copy of the report should also be mailed to the employer's insurance company. An employer who refuses or neglects to make an injury report may be guilty of a misdemeanor, punishable by a fine.
- Make a written report of every accident resulting in personal injury that causes a loss of time from regular duties beyond the working day or shift on which the accident occurred or that requires medical treatment beyond first aid or more than two treatments by a doctor or persons rendering first aid. (See the "Employer's Report of Injury" form at the end of this chapter.)
- Comply with all requests for further information regarding injured workers by the workers' compensation board or the insurance company that is, statements of the employee's earnings before and after the accident, reports of the date of the employee's return to work, or other reports that may be required to determine the employee's work status following the injury.
How Employees Avoid Workers' Compensation Laws
Workers' compensation benefits usually are the exclusive remedy of injured employees against their employer. However, there are a number of exceptions where the "conditions of compensation" do not exist, enabling employees or their survivors to sue an employer or a third party.
Third Parties. A third party such as a property owner, a manufacturer of machinery, or a subcontractor that is liable for the employee's injuries can be sued. That third party in turn can sue the employer for contribution or indemnification. New York limits the third- party liability of employers to cases involving grave injuries.
Uninsured employers. If an employer doesn't have workers' compensation insurance coverage, injured employees may bring a civil suit against the employer. Some states permit both a civil suit and a compensation claim.
No employer-employee relationship. One must be in the service of an employer under an appointment or contract of hire or an apprenticeship express or implied, oral or written. If the services are voluntary, there may be no employer-employee relationship. Similarly, the required relationship does not exist if the injured person is employed as or by an independent contractor.
Excluded employment. Certain employees are not covered by the state workers' compensation legislation. For example, farm workers, corporate officers, working partners, domestics, railroad laborers, those employed by businesses employing less than a minimum number of employees, and casual employees are typically not covered.
Excluded injuries. Although most physical injuries are covered by workers' compensation, claims for some other types of injuries are not. They include false imprisonment, malicious prosecution, defamation, invasion of privacy, deprivation of civil rights, and emotional distress. In these instances the employee may commence a civil action.
Injury outside the course of employment. If the employee's injuries are inflicted outside the course or scope of employment, workers' compensation acts do not apply.
Employer's intentional misconduct. Certain states increase awards by one-half when an employee is injured by the "serious and willful" misconduct of the employer. In certain states, if the employer exposes the employee to toxic chemicals and knows of the danger, yet fails to correct it or warn the employee, a civil suit or criminal prosecution may be permitted.
Dual capacity doctrine. An employer may be held liable to an injured employee on the basis that it occupied a second capacity in addition to that of an employer. Dual capacity exists where the nonemployer aspect of the employer's activity generates a different set of obligations than the employer's duties to its employees. These situations can arise, for example, if an employer manufactures a product that causes harm to the employee or if a doctor treats a nurse. The doctrine applies where the employer takes on an obligation separate and distinct from that involved in the employment.
Corporate employees. Where the employee's injuries arise from the acts of a separate subsidiary of the employee's corporate employer, the parent is liable for the injury; the subsidiary is viewed as an entity separate and distinct from the parent. Also, where a corporation is consolidated rather than merged, separate entities may be involved.
Fellow employee. An employee may be permitted to sue a coworker for injuries caused by willful misconduct or intoxication.
Injured Workers Protected from Retaliation
Although workers' compensation laws provide remedies to injured employees, they also protect employers because they provide employees their only remedy against employers for job-related injuries. To protect employees from employers who use the exclusive remedy protection to harass injured employees, the following states prohibit employers from punishing, retaliating against, or discharging employees who exercise their rights under workers' compensation laws: Arizona, California, Hawaii, Maine, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Texas, and Wisconsin.
The burden of proof in a retaliatory discharge suit is on the employee. However, the employee does not have to prove that the workers' compensation claim is the sole reason for the discharge. The test is whether the employer's action is rooted substantially or significantly in the employee's exercise of rights.
A basic case often can be shown by the proximity of time between the filing of the claim and the date of discharge, especially when coupled with a satisfactory work record. Once a basic case is established, the burden shifts to the employer to show that he or she based the discharge on nonretaliatory motives.
California law entitles employees to 50 percent additional compensation (not to exceed $10,000). New York law provides for reinstatement, payment of back wages, and penalties ranging from $100 to $500. Employees who have testified or are about to testify in a workers' compensation proceeding are also protected by New York law.
Some states, such as California, make retaliation a criminal offense. However, certain courts have used such criminal statutes as a basis for denying an employee's civil cause of action for a retaliatory discharge.
Some states, such as Alabama, North Carolina, Florida, Mississippi, and New Mexico, do not recognize retaliatory discharge as a cause of action.
Besides termination, retaliation may take the form of more subtle types of discriminatory treatment, such as demotion or salary reduction. Injured employees are protected from discriminatory conduct immediately after an injury and before a formal workers' compensation claim is filed. An employee's cause of action may be valid even though all the employee did was give notice to the employer of a claim.