Workers Compensation Insurance as Employee Benefit
Employers have a legal and a moral responsibility to provide their employees safety at their workplaces. But despite the best of safety measures in place, accidents cannot be totally eliminated and they can, at best, be minimized. It is the responsibility of an employer to maintain a safe workplace, have workers compensation insurance covering his employees and protect the workers from financial hardship in the event of a workplace injury. Workers compensation insurance covers workers injured not only while they are on the job, but also if they are involved in road accidents while on business. It also covers work-related illnesses.
Workers compensation insurance protects employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents. Without bothering who is at fault, Workers compensation insurance provides payments to injured workers. It also provides death benefits to surviving spouses and dependents. Workers’ compensation insurance protects employers and injured workers from financial costs when a worker sustains a work-related injury or health disorder.
If a business employs or engages workers whether on a regular, casual or contract basis, they are deemed to be employees and must be covered by a workers compensation insurance policy. For purposes of Workers compensation insurance, even trainees and apprentices are considered as workers. A worker will also include all persons who receive wages or commission, regardless of the number of hours they work each week, and even if they work away from the employer’s premises.
There are many employees – like workers lent or on hire, outworkers, mine employees, boxers, wrestlers, referees and entertainers, salespersons, canvassers, collectors, voluntary ambulance workers, rural workers etc – who are called deemed workers and these deemed workers are also to be covered by the Workers compensation insurance. Workers’ compensation insurance is compulsory. As an employer, if you are not insured under the worker compensation insurance, you may be liable for fines of up to $5,000 per worker, as well as an amount equal to any avoided premiums retrospectively for five years. The law is tough and if you continue to be uninsured even after the date of your conviction, you will commit a separate and further offence for every week you are uninsured.
All proprietor or partnership companies that employ workers must take workers compensation insurance policy. But only the employees and not the sole trader and partners would be covered by this insurance. Sole traders and partnerships should consider taking out a personal accident and illness policy or an income protection policy, in case they are injured and unable to work. But this is optional and not a mandatory requirement. A private limited company must have a workers compensation insurance policy to cover all its workers. Working directors or directors undertaking employee type of duties are considered workers of the company.
Workers’ compensation insurance covers workers when they are working for any trade or business and/or while acting under their employer’s instructions. The insurance coverage protects the worker and the business from financial loss when a worker sustains injury or health disorder. It provides injured workers with weekly payments to cover loss of earning capacity and payment of reasonable medical and vocational rehabilitation expenses to help them recover and return to gainful employment. In extraordinary circumstances, if a worker is not be able to return to work, he may be entitled to receive specialized retraining an in some cases, workers may be entitled to lump sum settlements. It has to be borne in mind that workers’ compensation insurance does not recognize injuries suffered by a worker during his journey between his residence and place of work or vice versa.
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By Peter Sam