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Definition of Workers Compensation Act

A Workers' Compensation Act is a piece of legislation that has been enacted in every state in the United States. While a Workers' Compensation Act varies from state to state, it is made up of statutes and laws that establish the liability of employers for injuries to employees while they are on the job or illnesses that result from their employment. These statutes and laws also require insurance to protect the employees. Workers' compensation is not founded on an employer's negligence. It is absolute liability for a percentage of salary or lost wages, medical coverage, costs of retraining and rehabilitation and payment for any permanent injury that is usually founded on an evaluation of how much a worker is limited.

A Workers' Compensation Act establishes a system of hearings and quasi-judicial decisions that are made by administrative law judges and appeal boards. If a worker does receive workers' compensation, the Workers' Compensation Act sets forth that this is the only remedy an injured worker has against their employer. The worker is not allowed to sue their employer in a personal injury lawsuit for things like pain and suffering. However, if a third party was responsible for a worker's injury or illness, the worker is allowed to bring a third party lawsuit against that third party.

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