Different areas of workers compensation work in different ways. In general, employers purchase workers compensation and pay monthly premiums in return for protection. When an employee is injured, they must file a claim through their employer with the insurer in order to receive compensation.
Wage replacement under workers compensation steps in when an employee’s injury prevents them from returning to work for a certain amount of time. While they are unable to work, workers compensation replaces a portion of the employee’s wages so they are not left completely without income.
This type of compensation is calculated on a percentage basis. It depends on the policy and the employee’s typical paycheck. These payments will be paid at the same time as the employee’s paycheck normally would be. For example, if an employee is usually paid biweekly, the wage replacement payments will occur biweekly.