Workers’ compensation is an important system in California. The system makes sure that workers receive medical treatment after receiving a work-related industrial injury. Injured workers can receive payment for medical costs as well as a portion of replacement wages. Clearly the worker receives protection from the system, but it is important to remember that business owners and their business structures are also protected by the workers’ compensation system.
One essential way that businesses receive protection is through the “no-fault” system under workers’ compensation. This means that the employee is not required to prove that the business owner committed any type of negligence in order to receive compensation. While at first blush it may seem that this is a protection for the employee, it is also a protection for the employer. This Is because the no-fault system also prevents the injured worker from bringing a lawsuit in civil court to recover for the work-related injury. In a civil suit, the employee would need to prove that the employer committed negligent or intentional conduct leading to the injury. The amount of damages could be unpredictable. By contrast, under workers’ compensation, there are specific fee schedules set out for how much an employee will be able to recover. This system could save the employer substantial time in court as well as money for damages that employee could not recover in the workers’ compensation system.
Another important way that the workers’ compensation system protects your business is by requiring workers’ compensation insurance in almost every situation. Workers’ compensation insurance protects your business because if your worker is injured in the course and scope of his or her employment, your business will be on the hook for the medical costs and replacement wages, regardless of whether you were actually carrying insurance. In other words, if you do not carry the required insurance, having to pay all of these costs straight out of the business could create a significant and even detrimental impact on your business.
Finally, the workers’ compensation system helps businesses by making business owners and managers more aware of potential dangers and how to take action to help prevent injury. Forming safety committees, keeping equipment up to date, and providing the latest safety training for employees are all ways businesses can reduce their liability, and could even reduce their insurance premiums.
We have extensive experience helping our clients understand how their business fits in the workers’ compensation context. Contact us today for a consultation.