Like many states, it’s required by law in Alabama for employers to have workers’ compensation coverage. This insurance protects your business by providing you with limited civil liability in the case of an employee’s on-the-job injury or occupational disease. This coverage can help you avoid double compensation, penalties and fines.
Read on to learn what Alabama workers’ compensation is and how it can protect you and your small business in the event of a work-related accident.
Alabama’s Department of Labor aims to protect the state’s employees and employers by providing compensation for job-related injuries and diseases through the Alabama Workers’ Compensation law.
The law requires that all job-related injuries must be reported to the insurance carrier. The insurance carrier is responsible for filing the Employer’s First Report of Injury to the Alabama workers’ compensation division. The division must keep a record of all job-related injuries that have been reported until final compensation is issued.
Employee benefits fall under four categories:
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- Doctor visits
- Emergency room care
- Surgery
- Medications
- Physical therapy
- Medical equipment, such as crutches and wheelchairs
- Chronic pain management
These benefits can include wage coverage for the time it takes an injured employee to recover and return to work. The amount of wage replacement depends on:
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- The level of disability
- The worker’s earning capacity
- Alabama state regulations
Disability benefits could be for life if the employee’s disability permanently prevents them from returning to work.
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- Job training
- Skills assessment and testing
- Job development and placement
- Resume assistance
- Tuition reimbursement
- Books and additional expenses
If an employee dies in a work-related incident, their dependents will be provided workers’ comp benefits. Dependents can include a spouse, minor children, or elderly parents living in the same household.
Benefits also include burial expenses and funeral costs in most states.
Additionally, an employee can also receive death benefits years after an injury. For example, if a worker is exposed to toxic chemicals on the job and develops cancer years later as a result, they can receive benefits.
- As an Alabama employer, you’re not required to have workers’ comp insurance coverage if you employ fewer than five workers, full-time or part-time. This includes officers of a corporation in any one business.
- Members of a limited liability company (LLC) and officers of a corporation or S corp. are covered by workers’ compensation.
- Alabama contractors involved in the construction of single-family, detached dwellings must carry workers’ comp coverage. Any business where employees face a risk of injury on the job are strongly encouraged to purchase workers’ comp insurance, even when it’s not required by law.
- You’re not required to have workers’ comp coverage if you employ:
- Domestic workers
- Farm laborers
- Casual employees
- Municipalities with a population lower than 2,000 people (according to the most recent federal census)
- If you employ workers in any of the above categories, you can still choose to provide workers’ comp coverage and include these employees in the company’s insurance program.
- Alabama’s Workers’ Compensation Division works to ensure that employees who have experienced a work-related accident are properly paid their compensation benefits. The division will ensure these individuals receive proper medical attention.
- The division also provides services and information to:
- Claimants
- Employers
- Attorneys
- Insurance companies
- Judges and legislators
- Labor and management groups
- Government agencies
- The employer/insurance carrier is responsible for directing medical care after an employee submits a claim. Except in the case of an emergency, the employer/carrier’s selected primary care provider will provide medical care for the claimant. The employer/carrier must direct care from the time the work injury notice is given – not after treatment has already begun.
- As an employer, you’re only responsible for the payment of medical bills associated with the injury claimed by the employee.
- Claimants can be reimbursed for mileage to doctor visits through workers’ comp coverage.
Remember, every situation is different. Alabama workers’ compensation laws are subject to change, so be sure to do your research and speak with a trusted advisor.
Please note that this content is intended for educational purposes only. As laws change regularly, refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about the basics of workers’ comp or check your current rate in 3 minutes.
