When an employee gets hurt during and in the course of work, it is usually true that the "exclusive remedy" for the worker’s losses comes from the workers' compensation laws and the workers' compensation insurance company. However, that isn't entirely true. While the employee’s exclusive remedy against the employer comes from workers' compensation (assuming the employer carries workers' compensation insurance), the employee may also obtain damages or benefits from another person who is not the employer and who is responsible for the damages suffered. This is what's known as a "third-party claim."
Workers’ Compensation As The “Exclusive Remedy” for Injuries At Work.
Usually, if an employee gets hurt at work, the employee can make a claim for workers' compensation, but the employee cannot file a lawsuit against the employer. This is generally thought of as a good thing, because it means that employees who are hurt at work typically do not have to file a lawsuit with the time and cost that entails in order to get benefits. Lawsuits are tough, and in order to get paid under a personal injury claim, the injured person has to prove that someone else was negligent and responsible for the injury. That’s a problem for two reasons.
- First, not all injuries at work ARE caused by someone else. Often they are just bad luck, or might even be due to the employee’s own mistake. Under workers’ compensation, these injuries are covered regardless of whose fault it is or if there is any fault. As long as the injury is work related, it is covered, and that is a tremendous benefit.
- Second, personal injury cases can take years. In the meantime, the injured person might not be able to work, and the medical bills will continue to stream in. In a personal injury claim (for an injury that happens outside of work), there is no built in coverage to help pay medical bills or to cover the lost wages that occur while the lawsuit is going on. If the injured person doesn’t have health insurance, they are in a difficult place, as they can’t force the other person to pay for those bills until they can prove their case and show the other person was at fault. Similarly, lost wages are not paid as they occur, but only after settlement or a favorable judgment in court. Last but not least, there is no guarantee of job protection for a person who is out of work for an extended time during the pendency of a personal injury law suit.
As a result, people with serious injuries that occur outside of work have to hope they can prove someone else was liable, but they also have to figure out how to hold on financially while the lawsuit is pending. This can be a huge stress, as the courts are backed up and this process can take time.
By comparison, under worker’s compensation, the employee need only show that the injury occurred during and in the course of work. Upon that showing, and assuming the employee’s injury is causally related to the accident, then the employee will be entitled to all the benefits outlined under the workers' compensation laws, including pay for lost wages, medical bill coverage, job protections and other assistance. The advantages to workers’ compensation coverage as opposed to a claim for a personal injury outside of work include the following:
- Under a worker’s compensation claim, employees usually get payments much faster and without having to take the time to prove anyone was at fault.
- Employees who are injured without any fault being attributable to another will still get coverage, including payment for medical bills and lost wages.
- The job protections which are required under workers’ compensation law and not under the laws pertaining to personal injury, are invaluable to most.
There’s Always a Downside, Right?
The downside is that employees covered under workers' compensation are only entitled to 60% of their lost wages, calculated as of the date of injury. It is true, these payments are tax-free, but it is the rare employee who would find themselves in the 40% tax bracket! This means, the employee injured at work will not get compensation for all the wage loss suffered. By comparison, in a personal injury claim, the injured person is entitled to seek 100% of lost wages.
Moreover, as the rate of pay in a workers’ compensation claim is determined by a calculation that looks backwards, before the employee was injured, it does not take into consideration the loss of future bonuses or pay raises which might have come the employee’s way had the injury not occurred. For some people, who were expecting a big raise for example, this is a real disadvantage. Personal injury claims can better address the full range of lost wages a person really suffers when they are injured and unable to work as they did before the injury.
In addition, there is no compensation for pain and suffering under the workers' compensation law as there is under personal injury claims. Depending on the type of injury and the length of treatment and recovery, pain and suffering can be significant, and there is no way to get any compensation for this loss under workers’ compensation.
Finally, there are other limitations as to the amount of time an employee is entitled to receive benefits under the laws of workers’ compensation. This can result in smaller awards of compensation than if the employee had been hurt outside of the workplace.
In sum, workers’ compensation claims are easier to win and the money comes faster with job protection, but most employees are not fully covered for their lost wages while out of work, and there is no compensation for pain and suffering.
Combine Personal Injury Claim with Workers’ Compensation for a Third Party Claim
The good news is there are instances in which an employee can combine the benefits from both types of claims. This occurs when an employee is injured during and in the course of work, but as a result of the negligence of a third party, not the employer.
Examples of Third Party Claims
A perfect example of this might be an employee who is injured in a motor vehicle collision caused by a drunk driver while making a delivery for work. This employee would be covered under workers' compensation, as the injury took place during and in the course of work. In addition, this employee would be entitled to make a claim against the negligent drunk driver for the damages caused by the car crash.
Another common scenario for a third part claim is in the settling of an injury that occurs due to negligent maintenance of premises owned by someone other than the employer. For example, an employee who goes to a customer’s property to perform work duties and is hurt on the property because of the customer’s negligent maintenance or failure to repair or warn of an unsafe conditions, such as a torn carpet or broken stair at the customer’s location.
How Does It Work
These employees would be eligible to make two entirely separate, but coordinating claims; one for workers' compensation with the employer’s insurance carrier and a second for personal injury against the driver and his motor vehicle insurance company. This requires the assistance of an attorney experienced with both workers’ compensation AND personal injury law, or two separate attorneys who can work together as the claims are interdependent. There are all kinds of laws and strategies with respect to the combination of these claims, and an attorney experienced in both workers' compensation and personal injury claims can help you work through your options to maximize your recovery for your losses.
By combining the rights and benefits available under these two areas of law, employees can enjoy an unprecedented amount of coverage, which potentially includes payment for 100% of lost wages, payments for pain and suffering, payment for medical bills (for a lifetime as long as the medical treatment is reasonable, necessary and related to the work injury), and the important job protections provided under New Hampshire's workers' compensation laws, including temporary alternative duty and the 18 month right to reinstatement. Moreover, the injured employee with a third party claim may be eligible for settlement under both claims.
If you or someone you know was seriously hurt while working, and the injury occurred as a result of someone else's unsafe premises or another person’s wrongdoing or negligence (not your employer), then you may want to take advantage of a free telephone consultation from an experienced workers' compensation and personal injury law firm.
To learn more about personal injury claims, check out Part 1 - 2 of our personal injury blog series.
Part 2: What is a personal injury claim?