Some states have compulsory workers' compensation laws, while others have elective laws. In compulsory states, companies who employ only a few people (less than a set minimum) may not have to comply with the law, although all other employers do. In elective states, both employer and employee have the right to reject the law. However, if the employer rejects the law, the employer gives up any protection from liability offered under the law as well. Some states require that certain occupations (such as dangerous ones) be covered under workers' compensation, while other occupations are exempted. In addition, many states exclude farm workers and domestic employees from compulsory coverage.

You can't receive workers' compensation benefits unless your illness or injury was work-related. An accidental injury is a compensable injury only if employment was the source of the injury, and the injury occurred during the course of employment. An illness is considered work-related only if it qualifies as an occupational disease. To qualify as occupational, the illness must result from employment and be caused by conditions specific to that employment or occupation. Two examples will illustrate how injuries or illnesses must be work-related:

Example(s): Example 1: Jill was hurt when she fell down a wet flight of stairs at work while she was walking to a late-morning meeting. She was eligible to receiveworkers' compensation disability payments because her accident was work-related and happened during working hours at her place of employment. However, if Jill had fallen down a flight of wet stairs at home while she was running to catch a bus to work, her injury would not be compensable because it was only indirectly work-related and occurred away from work outside of working hours.

If you are injured on the job, you may receive either permanent or temporary disability benefits from workers' compensation. In addition, your disability may be classified as either total or partial. How your benefit is paid, and in what amount, is determined by the law in your state, and depends as well on how severe and permanent your injury is. These benefits can be paid to you weekly, in a lump sum, or both. Permanent disability benefits are often paid in a lump sum according to a schedule determined by the state. Temporary benefits are usually paid weekly, and the amount of benefit you receive is based on your wages at the time you were injured. In most states, you will receive 66 2/3 percent of your wages, although this percentage may be higher for permanent total disabilities. However, your benefit is also subject to a weekly maximum that varies widely from state to state.

Example(s): Frank broke his leg at work and began receiving temporary workers' compensation disability benefits. At the time he was hurt, he was making $600 per week, so at 66 2/3 percent of his wages, he received a disability benefit of $400, an amount less than his state's maximum weekly benefit of $444. However, had Frank lived in another state, he might have received less.

Medical care is provided under all state workers' compensation laws. In most cases, the full cost of the injured worker's medical treatment will be paid. A few states, however, limit payments for medical care and restrict the length of time during which medical care can be supplied.

Rehabilitation benefits are not included in each state's workers' compensation laws, but all states do provide rehabilitation under the Federal Vocational Rehabilitation Act. If you become disabled, you may receive physical, mental, or vocational rehabilitation; pay for expenses incurred during rehabilitation; and aids (such as a wheelchair) that you require. Some states, however, impose maximum limits on rehabilitation benefits.

Example(s): Liz purchased a private disability insurance policy that would pay her $1,200 a month (60 percent of her earnings) in the event she became disabled. Six months later, she was hurt at work and filed a workers' compensation claim as well as a disability insurance claim. However, because she had purchased a social insurance offset rider, she did not receive any benefit from her disability insurance policy because her workers' compensation benefit was higher (66 2/3 percent of her earnings).