Rationale for workers compensation - Essay Example

Rationale for workers compensation The workers compensation in law is a no-fault law in regards whether the employer was not negligent or whether the employee was negligent. It assists employees to be compensated without the employer having to undergo a court process. The rationale for workers compensation has two aspects in it, one being fairness to injured employees and the other being reduction of costs associated with workplace injuries. Workers compensation represents a compromise between the needs of employees and employers.

The theory that underlies in the rationale of workers compensation is that in the end both the employees and employers benefit more than through legal action. One of the objectives of workers compensation is prevention of accidents. The theory underlying in this is that employers will invest in accident- prevention programs to hold down compensation costs. Lower insurance premiums come as payoff to employers resulting to fewer accidents. Another objective is allocation of costs whereby cost allocation is spread cost of workers’ compensation appropriately and proportionately ranging from the most to the least hazardous.

Replacement of income for the injured employees is another objective for workers compensation whereby it replaces the lost income due to injuries occurred during the job. Rehabilitation of the injured employee is the last objective of workers compensation It is difficult to make generalizations of who is in workers compensation. Eighty percent of the work force in America is covered, but those who are not covered are categorized as the general agricultural employees, domestic employees, casual employees, hazardous work employees, religious employees, employees of a small organization, maritime employees, contractors, minors and extraterritorial employees.

Workers compensation help prevents future accidents by limiting stress-related claims, streamlining administration of the system and limiting vocational rehabilitation benefits (Wickert, 2012). In summary, workers compensation is here to benefit both the employers and employees in the end for smooth running of the business.ReferencesWickert, G. (2012). Workers compensation subrogation (1st ed.). Huntington, N.Y.: Juris Publishing Inc.