• Most workers are eligible for workers’ compensation, but all states exclude some workers.
• Though employees are covered by workers’ compensation, the employer cannot be sued for negligence; however, there are instances where both the employee and employer have been penalized following an injury or illness.

Most workers are eligible for workers’ compensation (WC) coverage, but every state excludes some workers. Exclusions often include business owners, independent contractors, domestic employees in private homes, and farm workers.

In theory, employees are covered by WC whether or not they were following company policy at the time they were injured on the job. At the same time, even if an injury or illness is due to employer negligence, the employer cannot be sued. However, in practice:

• Some states reduce compensation if an employee was on drugs or alcohol at the time of an accident or was not following established safety rules,
• Some employers are successfully sued for negligence deemed to be willful, and
• Third-party manufacturers can still be sued by workers injured due to the use of faulty products.

In essence, employees relinquish the right to sue for work-related injuries in return for a statutorily imposed system of medical and disability benefits. Before WC laws, a worker suffering a serious injury might be permanently disabled and not receive any compensation. If the injury was due to employer negligence, the worker could sue, but that would take time and money.

Although workers can seek only statutory compensation for work-related injuries, they can still sue third parties, like product manufacturers. Employees can also pursue certain penalty claims through the WC system. They can also seek compensation through Equal Employment Opportunity Commission (EEOC) or state agencies responsible for enforcing anti-discrimination laws.