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Differentiating between Disability and Workers' Compensation

By HR Tech Outlook | Friday, January 17, 2020

When a worker gets injured on the job, the employer is liable to pay for the medical bills and lost wages that the worker suffers. In most cases, employees who claim workers' compensation do not necessarily have a disability, but a temporary injury caused at work.

Fremont, CA: Workers often suffer injuries on the job or sustain illness or injuries away from work that could result in absence from work, which in some cases becomes eligible for disability or workers' compensation. Employers compensate their employees who suffer from work-related injuries in the form of workers' compensation insurance. At the same time, workers who suffer an injury or illness not related to work can request time off for treatment under disability insurance.

Differences

The primary difference between disability and workers' compensation is that the later covers work-related injuries. Employers purchase workers' compensation insurance to cover for incidents that can occur on the job. When a worker gets injured on the job, the employer is liable to pay for the medical bills and lost wages that the worker suffers. In most cases, employees who claim workers' compensation do not necessarily have a disability, but a temporary injury caused at work.

On the other hand, disability insurance pays a portion of the worker's earning when the worker cannot perform work-related duties due to an illness or injury. Unlike workers' compensation, employees cover for disability compensation by paying insurance premiums through an employer-sponsored benefit plan.

Similarities

Both disability and workers' compensation provides monetary compensation to the employee. The benefits of the two may vary depending upon the state of the employee and occupation. Usually, the benefits include a portion of the wages until the worker can return to their job in a fit for work conditions. In both cases, the benefits of the two are not applicable if the injury or illness is self-inflicted or intentional.

Limitations

Regardless of the benefits, both disability and workers' compensation have their shortcomings. When a worker takes leave from work for injury or illness, whether job-related or otherwise, he/she does not receive the complete wage but only a part of it as compensation. In some cases, disability insurance may cover less than 50 percent of the employee's remuneration. Also, employees must pay additional premiums to cover for long term illness or injuries.

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