Objectives of Workers' Compensation

A fundamental objective is to provide broad coverage of employees for job-related accidents and disease.Workers' compensation laws should cover most occupations or job-related accidents and disease. A second objective is to provide substantial protection against the loss of income. The cash benefits are designed to restore a substantial proportion of the disabled worker's lost earnings, so that the disabled worker's previous standard of living can be maintained. A third objective is to provide sufficient medical care and rehabilitation services to injured workers. Workers' compensation laws require employers to pay hospital, surgical, and other medical costs incurred by injured workers and provide for rehabilitation services to disabled employees to help them be restored to productive employment. Another objective of Workers' compensation is to encourage firms to reduce job-related accidents and to develop effective safety programs. Firms with superior accident records pay relatively lower workers' compensation premiums because experience rating is used to encourage firms to reduce job-related accidents and disease. Above all, workers' compensation laws are designed to reduce litigation. Disabled workers are paid benefits promptly without requiring them to sue their employers. The objective is to reduce the amount of cases held in court, which would help reduce or eliminate the payment of legal fees to attorneys.