What is Workers' Compensation?

Workers' compensation is insurance that is administered by the state and required for all employers. Through this insurance, workers who suffer from a work-related injury or illness may receive monetary compensation for their losses (Compensation may include lost wages, medical care, and out-of-pocket expenses.)

The original Workers' Compensation Act was passed in Massachusetts in 1911. Prior to this Act, workers who suffered work-related injuries or illnesses had to prove that their employer was at fault. This practice was ineffective in that many injuries were not directly caused by negligence, and lawsuits were so lengthy that workers could not support themselves during the elapsed time.

Under the Workers' Compensation Act, all workers with injuries "arising out of and in the course of his employment" are entitled to benefits that support them during disability and provide compensation for permanent injuries and medical expenses. A worker must show that they were "working" for the employer at the time of the injury, but not that the employer was negligent.

All employers in the U.S. are required to maintain a policy of workers' compensation insurance under the Workers' Compensation Act; it is a criminal offense if they do not. However, there are some employers who choose to disobey the law. In these cases, benefits to workers injured are paid by the Commonwealth of Massachusetts, and the state then pursues the employer for reimbursement.