Workers Comp Basics
What Is Workers' Compensation?
Workers' compensation is a state-mandated insurance system that pays for medical treatment and lost wages when employees are injured on the job. In exchange for guaranteed benefits without proving fault, injured workers generally cannot sue their employer in tort. Every state requires most employers to carry it - except Texas, where employers can opt out. The benefits are real but limited; the rules are technical; and denied claims happen often.
The Short Answer
Workers comp covers medical bills and partial wage replacement (typically two-thirds of average weekly wage) for work-related injuries. You don't have to prove fault. In exchange, you generally can't sue your employer. Claims are filed with the state Workers' Compensation Board (or division). Denied claims go through administrative hearings, not state court. Time limits are short (often 30-day notice + 1-2 year statute). Texas is unique - employers can opt out, and non-subscribers can be sued in district court.
How we wrote this: Our editorial team reviewed published rates, court rules, statutes, peer publications, and our own data from working with vetted firms. We do not accept payment for placement, and we do not write sponsored content. More on our methodology →
What workers' comp covers
Medical treatment for work-related injuries. Doctor visits, hospitalizations, surgeries, prescriptions, physical therapy, durable medical equipment, mileage to and from medical appointments. Most states pay 100% of approved medical care - no copays.
Temporary income benefits. While you can't work due to the injury, you receive a percentage of your average weekly wage - typically 66 2/3 percent, capped at a state maximum that updates annually.
Permanent income benefits. After you reach maximum medical improvement (MMI), if you have a permanent impairment rating, you may receive impairment income benefits or supplemental income benefits depending on state.
Vocational rehabilitation. If you can't return to your previous job, training for a new occupation may be covered.
Death benefits. If a worker dies from a work-related injury, dependents receive ongoing benefits and burial expenses.
What workers' comp does NOT typically cover: pain and suffering, punitive damages, full lost wages, future medical that's not approved by the carrier.
When you're covered
You're an employee (not an independent contractor) of a covered employer.
The injury arose out of and in the course of employment. Most physical injuries qualify if they happened at work. Mental injuries are harder; some states cover them, others don't.
Repetitive stress injuries - carpal tunnel, back strains from lifting - are typically covered if linked to job duties.
Occupational diseases - exposure to toxic substances, asbestos, hearing loss from noise - are typically covered.
Travel injuries - usually covered if you were on a work errand. The morning commute is typically not covered ("going and coming" rule), but exceptions exist for traveling employees and special errands.
What's typically not covered: injuries from fighting, intoxication, intentional self-harm, horseplay, or activities outside the scope of employment.
How to file a claim
Step 1 - Tell your employer immediately. Most states require notice within 30 days. Some are stricter (some require notice within hours of the injury). Verbal notice usually suffices but written is better.
Step 2 - Get medical care. Often you must see an employer-approved doctor first; some states allow you to choose your own doctor for some types of care.
Step 3 - File the formal claim form. Each state has its own form. Texas: DWC-41. California: DWC-1. New York: C-3. Florida: DWC-25. Most states have 1-2 year deadlines for filing the formal claim.
Step 4 - Insurance carrier responds. Within 14-30 days the carrier accepts or denies the claim. If accepted, benefits begin. If denied, you have rights to challenge.
Step 5 - If denied, request a hearing. State workers' comp boards have administrative hearing processes. You typically have 30-90 days to request a hearing on a denial.
Step 6 - Hearings and appeals. Workers' comp hearings happen before administrative law judges, not in regular court. Decisions can be appealed to a state appeal board and ultimately to a state appellate court.
How benefits are calculated
Temporary total disability (TTD). When you can't work at all due to the injury, you receive a percentage of your average weekly wage (AWW). Most states: 66 2/3 percent of AWW.
Average weekly wage (AWW). Calculated from earnings in the 13-52 weeks before the injury. The AWW determines all your wage benefits, so disputes about the right calculation matter.
State maximum and minimum. Each state caps the maximum and floors the minimum. California 2025 max: $1,680/week. Texas max: 100% of state average weekly wage. Florida max: $1,295/week. New York max: $1,251.41/week.
Temporary partial disability (TPD). When you can do some work but not all - benefits make up two-thirds of the wage loss.
Permanent partial disability (PPD). After MMI, if you have a permanent impairment rating, benefits are paid based on the rating times state-specified weeks. The math varies enormously by state.
Permanent total disability (PTD). Lifetime benefits at the TTD rate for total inability to work.
When claims get denied
Denial reasons - the common ones: late notice; no employer-employee relationship; injury not work-related; pre-existing condition; recreational activity; intoxication or substance use; willful misconduct.
Most denials are challengeable. The carrier's initial denial is just an opening position; the administrative-law-judge ruling is what counts.
Independent medical examinations (IMEs). Carriers send you to their chosen doctor who often disagrees with your treating doctor. State-paid "agreed" or "qualified" medical evaluators (QMEs) provide more neutral opinions in disputed cases.
Treatment denials. Even on accepted claims, the carrier may deny specific treatments (surgery, MRI, prescription). State utilization-review processes adjudicate these.
Settlements. Most workers' comp cases eventually settle - either as full lump-sum closures of all future benefits, or as structured stipulations for specific issues. Settlements typically require state approval.
Texas - the non-subscriber exception
Texas is the only state where private employers can choose not to carry workers' comp insurance. Employers who opt out are called "non-subscribers."
If your employer is a non-subscriber, you can sue them in state district court for negligence. They lose the common-law defenses (contributory negligence, assumption of risk, fellow-servant rule) that normally protect employers.
Non-subscriber lawsuits often pay much more than workers' comp would have - full lost wages, full medical, pain and suffering, sometimes punitive damages. The 2-year personal-injury statute of limitations applies.
Verify employer status: Texas requires non-subscribers to post notice and to send specific forms. The Texas Department of Insurance maintains a list.
When to hire a workers' comp lawyer
Almost always when the claim is denied or contested. Pro se claimants face technical procedure and aggressive carrier representation. Workers' comp lawyer fees are statutorily capped (typically 15-25% of past and future benefits) and paid only on benefits actually recovered.
When you have a permanent impairment. Permanent disability ratings are technical and disputable; getting the right rating affects benefits for life.
When the carrier wants to settle. Lump-sum settlements close out all future medical and wage benefits forever - getting the number right is critical.
When third parties may be liable. If a non-employer caused the injury (faulty equipment, contractor on the job site, defective product), there may be a parallel personal-injury claim with much larger damages.
When the injury is catastrophic. Lifetime benefits, vocational rehabilitation, and structured settlements all need professional attention.
Initial consultations are free. Workers' comp lawyers don't charge unless you recover.
Need a vetted workers' compensation lawyer?
Tell us about your situation and we'll match you with two or three vetted attorneys within 24 hours. Free, confidential, no obligation.
Request Free Consultation →Quick lead form — free attorney match
Fill this out and we will match you with two or three vetted firms within 24 hours. No fee. No obligation. Privacy policy.
Frequently asked questions
Can my employer fire me for filing a workers' comp claim?
Most states bar retaliation for filing a workers' comp claim. If you're fired, demoted, or harassed for filing, you may have a separate retaliation claim. Document everything.
What if I can't see my own doctor?
Many states require employer-approved doctor for initial treatment, then allow you to choose your own after a certain period or with state board approval. Rules vary by state.
How long does workers' comp last?
Temporary benefits last until you reach MMI or return to work. Permanent partial benefits run for state-specified weeks based on the impairment rating. Permanent total benefits run for life in most states.
Are workers' comp benefits taxable?
Generally no. Workers' comp benefits are not subject to federal income tax.
Can I sue my employer instead of filing workers' comp?
Generally no - workers' comp is the exclusive remedy for work injuries. Exceptions: Texas non-subscribers (you can sue), intentional employer misconduct (some states), third parties (you can sue them).
How much does a workers' comp lawyer cost?
Statutorily capped contingency. Typically 15-25% of past and future income benefits, paid only when benefits are recovered. You owe nothing if you lose. Initial consultations are free.
Related reading
One last thing. This article is general information, not legal advice. Every situation is different. The free consultation is the right next step. — The LawFirmSquare team