Workplace accidents are inevitable and can cause serious injuries. As per Workers’ compensation laws, the employer is liable to compensate the claims to employees if they suffer an injury, death, illness, or disability due to work-related accidents. The Workmen Compensation Act, of 1923 also defines the compensation based on the severity and nature of injuries.
Though workers’ compensation is on a ‘no fault’ basis, the employer also has the right to content workers’ compensation claims if they think injuries have nothing to do with work-related accidents or the wounds are not severe or for many other reasons.
Many employers dispute workers’ compensation insurance claims made by employees in order to safeguard their brand image. And, they also contest to discourage the other injured employees from making claims with a fear of being held liable. However, it is also important to note that not every employer is involved in such practices. There are employers who actually support their employees during an unforeseen event.
Some employers may contest workers’ compensation claims for various reasons. Let us take a look at some of the reasons:
Financial impact from workers compensation claims
One of the main reasons for employers to contest workers’ compensation claims is their concerns over the financial impact of workplace accidents. As soon as the injured or affected employee makes a claim during such events, it becomes a statutory obligation for employers to pay compensation to them. Compensating the employees can result in higher workers’ compensation insurance premiums. Financial impact and insurance costs can be major concerns for employers to fight claims.
Incorrect categorisation
Some employers may miscategorise the employees to deny their claims and escape from obligations. This way employers can dispute workmen’s compensation claims.
Sceptical of fraudulent workers compensation claims
Sometimes employers may have suspicion of fraud in the claims made by the employees. In order to protect themselves, employers may dispute the worker compensation claims made by employees. However, it is important to understand that fraudulent claims may arise from both parties – employers and employees. The compensation claim process also involves surveillance, scrutiny, and careful investigation of claim events.
Dispute over the severity of an injury
Employers may fight workers’ compensation claims if they have a dispute in terms of the cause of injury or the severity of injury caused to employees. If the employer thinks the injury is not caused at work or the injury is not as severe as the employee claimed, it can lead to a dispute. Employees may have to undergo further medical investigation if the employer disputes the workers’ compensation claim.
Lack of adequate insurance
Lack of adequate workers’ compensation insurance coverage can be one of the main reasons for employers to fight workers’ compensation claims. Without proper insurance, workers’ compensation can become a huge financial obligation. Penalties associated with the non-compliance can add up to the financial burden. In such cases, the employer may contest compensation claims to avoid the financial burden.
Regulatory scrutiny concerns
Employers may fear that approving workmen’s compensation claims may get them under regulatory scrutiny. They may also have concerns about further increases in workmen’s compensation claims. Administrative burden and financial obligations increase with the increased number of claims. In many cases, the employer may contest claims out of such fears and concerns.
Workers’ compensation laws vary from one jurisdiction to another. Hence, it is extremely important for employers to understand the law applicable. Employers need to be aware of provisions under the Workmen Compensation Act, of 1923 before contesting workers’ compensation claims.
Conclusion
The employer may contest workers’ compensation claims for a variety of reasons. However, an employer disputing a claim does not always signify an inappropriate practice. Having adequate insurance coverage can ensure the employer fights only justifiable compensation claims.
