This article is about Justworks PEO. What product am I using?
Overview Section
Every employer may eventually deal with an employee who experiences a work-related injury or illness. These situations often require more than just regular PTO or sick leave. Whether it involves medical treatment, wage replacement, or time off to recover, it’s important for employers to handle workers’ compensation claims in line with company policies, procedures, and applicable federal and state laws.
Understanding Workers’ Compensation Benefits
Workers’ compensation is a "no-fault" system designed to support employees who experience work-related injuries or illnesses. It usually covers two main things:
Medical Treatment: May provide payment for doctor visits, hospital stays, surgery, medications, physical therapy, medical equipment, and travel to/from medical appointments.
Wage Replacement: May provide a portion of the employee’s pay if they are unable to work while recovering. This can include:
- Temporary Total Disability (TTD): For employees who unable to work temporarily
- Temporary Partial Disability (TPD): For employees who can work in a limited capacity
- Permanent Total Disability (PTD): For employees who are unable to return to work permanently
- Permanent Partial Disability (PPD): For employees who have lasting limitations but can still work
The Waiting Period: Most states require a "waiting period" (typically 3–7 days) before wage replacement benefits accrue. If the disability persists beyond a certain threshold (e.g., 14–21 days), the waiting period is often paid retroactively.
Employee Coverage
Full-time and part-time employees are generally covered under workers’ compensation. This means that if they are injured or become ill due to work, they are eligible for medical treatment and wage replacement benefits in accordance with state law.
Workplace Injury Reporting
Company administrators must report any workplace incidents to Justworks within 24 hours, even if the employee does not plan to seek medical treatment. You can learn more about the reporting process here.
Workers’ Compensation & Leave
Workplace injuries can happen to any employee, and employers need to handle them carefully to comply with policies and laws. Most injuries allow employees to receive treatment and return to work without taking leave. Some injuries may require time off, in which case employers can place the employee on unpaid leave.
Unpaid Leave & Pay Rules
Under the Fair Labor Standards Act (FLSA):
- Exempt employees: Salary can be reduced for full-day absences when the time off is covered under a legitimate paid leave plan, such as sick leave, PTO, or workers’ compensation, but not for partial day absences. For partial days, employers may require use of PTO or sick leave to cover missed time.
- Non-exempt employees: Paid only for hours worked. PTO can be used to cover lost time not covered by workers’ compensation. They may supplement worker’s compensation benefits with accrued PTO to reach 100% of their normal pay, provided this coordination follows state law and company policy.
Other leave protections, such as leave covered under the Family Medical Leave Act (FMLA), may run alongside workers’ compensation leave. Employers should review federal and state laws when managing leave.
Managing a Workplace Injury: Step-by-Step
This below process is a general outline of key steps employers should follow after a workplace injury, from reporting the incident and adjusting payroll to setting up leave and supporting the employee’s return to work. Following these steps helps ensure compliance with state laws and provides support for injured employees.
1. Injury Occurs
An employee is injured, and the employer submits a workers’ compensation report to Justworks within 24 hours.
2. Adjust Payroll
Justworks will reach out to the employer to review the claim and assist with updating payroll as needed (for example, stopping pay for unworked days). The employee may use PTO or sick leave during the waiting period.
3. Set Up the Leave
The employer determines whether other leave laws apply and formally places the employee on leave, ideally within 5 days of the injury. Justworks can help review leave protections and best practices.
4. Return to Work
Once the employee is medically cleared, they return to work and regular pay resumes for hours worked.
Workers’ Compensation Leave FAQs
Can I require my employee to utilize accrued sick leave or PTO during the waiting week?
Employers cannot require employees to use PTO or sick leave during the workers’ compensation waiting period, but may offer it as an option. Using PTO or sick leave during this time is allowed in most states, though continued pay beyond the waiting period can affect wage replacement benefits and should generally stop once the state-mandated waiting period ends.
Can my employee use intermittent leave while on Workers’ Compensation?
Workers’ compensation usually does not cover wage replacement for partial or intermittent leave. Employees are encouraged to schedule medical appointments outside work hours, but if time off is needed, they may use accrued sick leave or PTO. Additional leave protections, like FMLA or CFRA, may also apply.
How are payroll and benefits handled during leave?
Workers’ compensation from Zurich (Justworks workers’ compensation carrier) will go directly to the employee and will not include deductions like health insurance. Employers can either:
- Collect Payment Upon Return: Justworks collects outstanding premiums from the employee’s first paycheck after leave.
- Employee Pays During Leave: The employee pays premiums directly to the employer (outside of Justworks), either as a lump sum or in installments.
If premiums are paid during leave, as a best practice, the arrangement should be documented in writing with the advice of legal counsel, comply with applicable leave laws (like FMLA), and be communicated to Justworks to avoid duplicate collection.
Returning to Work
Reasonable Accommodations
When employees return to work after an injury, they may need reasonable accommodations to perform their job. Employers should engage in the interactive process to determine what’s needed. Common accommodations include light duty, administrative or workplace modifications, and additional recovery leave.
Resources:
The Job Accommodation Network (AskJan)
AskJan: Stay at Work / Return to Work
Permanent Disability & Separation of Employment
Employees permanently unable to work due to a compensable injury may qualify for Permanent Total Disability (PTD) benefits, providing ongoing wage replacement, often for life. Those with permanent impairments who can still work may receive Permanent Partial Disability (PPD) benefits, usually as a lump sum or scheduled payments. PTD or PPD is determined after maximum medical improvement (MMI).
Separation from employment related to permanent disability are typically involuntary (employer initiated), as the employee cannot perform their duties and the employer cannot accommodate the restriction.
Best Practices
Establish Workplace Policies
Employers should have clear, easy-to-follow policies on workplace safety, ergonomics, and accident reporting. Effective policies require training for employees and managers on safety roles, equipment use, and timely injury reporting. Managers may need extra guidance on investigating incidents, completing paperwork, and ensuring prompt care.
Policy templates are available to Justworks administrators in Mineral and should include the 24-hour injury reporting requirement. You can find sample policies below to get you started (note: you must be logged into your Justworks account for these links to work).
Injury and Accident Response and Reporting Policy
Preventing Workers’ Compensation Retaliation
Employers must not retaliate, discipline, or terminate employees for reporting workplace injuries or filing workers’ compensation claims. Organizations should maintain a supportive environment and ensure employees can report injuries or file claims without interference.
Justworks Support
Justworks supports you through the entire workers’ compensation process, from reporting the injury to resolving the claim. If you have any questions, please contact Justworks Support or your Customer Success Manager – Justworks’ workers’ compensation claims team may also reach out directly as needed.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.