Much like with most states, in Arizona a business must provide workers’ compensation coverage for their employees. This is based on the concept that workers should not be left in financial peril because they were injured while working for someone else. This means that as an employer, you need to provide it or else face legal consequences.
In Arizona, workers’ compensation is considered a “no fault” insurance. That means that if someone was injured on the job, they get coverage, no matter what caused it. The employer or the insurance company cannot blame the worker, the employer, or any co-workers for the injuries. Employees have a legal right to this compensation regardless of the circumstances.
Arizona workers’ compensation provides comprehensive coverage for employees who have been injured or gotten seriously ill while on the job and have to miss work. This type of situation could lead to serious financial hardship for an injured employee, but this protection will hopefully prevent this from happening.
To start with, workers’ compensation can provide funding for a portion of their past salary to continue to be paid. This is because if an injured employee can’t work, they will not be able to make money. This benefit will help them to continue paying bills and putting food on the table while they heal from their injuries.
Workers’ compensation will also provide benefits for medical expenses. Hospital bills can be astronomically high, and even if the employee does not have standard medical insurance, they can still get coverage through workers’ compensation. This will extend to physical therapy and other costs related to healing and recovery.
If an employee were to die as a result of their injury or illness, then their dependents and spouse may be eligible for compensation based on their lost wages. Plus, there is also coverage to help with funeral and burial costs.
One of the goals of workers’ compensation is to get employees back to their jobs. However, sometimes that isn’t possible. Either the employee is too injured to ever return to work, or they are unable to return to their previous job. Worker’s compensation can provide long-term financial benefits, and also assistance with back to work programs. These can include training and education to provide new skills for a new career.
What Employees Require Coverage?
As per Arizona law, all employees, including both part-time and full-time, must have workers’ compensation from their employers. However, there are some rare exceptions to this. For example, independent contractors do not have to have the coverage if you were to hire them. Neither do domestic employees who work from home. You also do not have to provide workers’ compensation to temporary or casual employees that are not hired for your normal business operations.
If you work for yourself and have no staff, you do not have to get workers’ compensation for yourself. However, many sole proprietors find that it is a good idea to have it just in case. You can still injure yourself at work even if you are the only one working.
In Arizona, your premiums will depend on the type of business you have and the types of workers you have on your staff. There are several classifications based on how much risk there is associated with any given job. Your insurance provider will place each worker inside one of those classifications and charge you a rate based on that.
Types of Incidents That are Covered
Most incidents that happen at work that result in an injury or illness are covered under workers’ compensation.
If an employee has a small injury that prevents them from working, such as an injured knee or ankle, they can get compensation for that missed time. They may also have some small medical bills and rehabilitation costs. More serious injuries will require higher levels of medical intervention and require extensive rehabilitation. Worker’s compensation will provide that funding as well. If they miss significant time from work, coverage will also provide them with ongoing wage supplements and other costs.
Illnesses can also come from the workplace. These are mostly from working in unhealthy spaces with exposure to dangerous substances. The employees must be able to prove that their illness was a direct result of that exposure, however.
Repetitive injuries also qualify. This could be from ergonomic issues from sitting at a desk, or muscle and joint injuries from repetitive tasks. Even though they take a long time to become apparent, recovery can be surprisingly long as well.
Penalties For Non-Compliance
Some businesses try to get away without having workers’ compensation. In some cases, the workers even understand this, but go along with it because they feel they really need the job and hope that they never need the coverage. However, since this is illegal, there are serious penalties for non-compliance with the law.
The first major penalty is that an employee who gets injured could bring a lawsuit against you. This can happen even if they knew that you didn’t have workers compensation coverage. The damages and legal costs from even one such case would most likely be much more than it would have cost you to pay for coverage in the first place.
If an employee files for workers’ compensation benefits, and you do not have coverage, the state will pay for their benefits, but look to your business for reimbursement. On top of that, they will charge you a penalty of 10% on top of what they paid out. Again, simply having the coverage would be more affordable.
Finally, if you are found to not have workers’ compensation coverage, you could face escalating fines until you get it.
There is no good reason not to have workers’ compensation in Arizona. Besides being the law, it also provides valuable protection for you and your employees. Without it, an injured staff member, or your business will be on the hook for medical costs, rehabilitation expenses, lost wages, and any damages that are awarded in a lawsuit.