What is Workers' Compensation?

Quick answer

Workers' Compensation (WC) is a paid, no-fault insurance benefit for employees who are injured or become ill in the course and scope of their job. It typically pays up to two-thirds of an employee's weekly salary plus medical expenses, and it can also pay benefits to the family of an employee who dies from a work-related injury or illness.

Who this applies to / Prerequisites

Applies to employees in the course and scope of their job duties.
Independent contractors and some other worker classifications may not be covered — check state law and employer policy.

Steps: How Workers' Comp coverage generally works

Employers in every state except Texas are required to carry WC insurance for the vast majority of employees.
Coverage thresholds vary by state — some require coverage starting at 1 employee, others at 2–5 employees.
Employers obtain WC coverage through a private insurance carrier, by self-insuring, or (in a few states) by purchasing a plan directly from the state.
If an employee is injured or becomes ill on the job, they file a WC claim through their employer's carrier or state program.
The state's WC chart determines the payment amount based on the type and severity of injury or illness — payment is generally up to two-thirds of weekly salary, with medical expenses covered up to a set dollar amount.

You'll know WC is functioning as intended when the employee receives partial wage replacement and medical expense coverage without needing to prove employer fault, and without needing to sue the employer.

What if it doesn't work

Employee unsure if they're covered: Coverage depends on worker classification (employee vs. independent contractor) and state law — confirm with HR or the employer's WC carrier.
Payment amount is unclear: Amounts are set by the state's WC chart based on injury/illness type and severity, not a flat rate — check the relevant state schedule.
If none of these apply, contact your Leave Success Manager.

Limits and exceptions

Texas is the only state that does not require most employers to carry WC insurance.
WC is "no-fault" insurance — it does not require proving employer negligence, and it generally prevents the employee from suing the employer for the injury/illness.
Payment is capped at approximately two-thirds of weekly salary; medical expense coverage is capped at a state-determined dollar amount.
WC does not, by itself, guarantee job reinstatement.