Compensation System

Table of Contents

Compensation System

Compensation System Introduction Compensation in the work place includes forms of insurance which provides wage placement and medical benefits to injured employees. There many compensation systems, which an organization should put in to consideration. Employees have the right for a tort claim. If the organization fails to compensate the injured employee he/she has the right to sue the organization. Compensation systems changes from one jurisdiction to another.

When establishing a business in a new place, the employer should be familiar with the compensation systems. The compensation can take place in different plans like weekly or monthly payment of wages, economic loss compensation, payment of medical expenses and compensation to the dependants of a killed employee in the work place. Compensation of loss which occurs as a result of employee negligence does not take place in many jurisdictions.

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Compensation System
Compensation planning


There many workers compensation systems which ensure that all employees have received their rights of compensation as stipulated in the Statutory. Longshore and Harbor Workers Compensation Act (LSA) cover all employees in the maritime industry. The Jones Act provides compensation and protection of seamen (Lee, 2009). Another program is called Federal Coal Mine Health Safety Act which covers people working in mine industries. It provides compensation to the miners who develop lungs complications. Veterans Administration is another program which provides compensation to people with complications and disabilities not related to their services (King, 2007).

Compensation System
Compensation System

In case of disability insurance, an organization should provide weekly payment of wages. This will enable employees to care for medical and family expenses. The employee will receive money weekly, and this can help in quick recovery through receiving a favorable medical care. The company providing weekly payment can incur loss because of payment of processing fee each week instead of making a single payment.

Economic loss compensation can be made for past and future loss (Max, 2012). Many people have provided wrong information about loss claim in order to get compensation in this plan. In case of health insurance, employee receives compensation for medical bills. This compensates workers when they develop a complication while providing services (Duke, 2010). The last plan is compensation of the dependants of employees who die in the work place.

There same instances in which a person can not receive a compensation. When individual suffers as a result of negligence he/she does not get compensation from any system (Jones, 2012). In case, a person does not report the loss, for a certain period he/she does not get any compensation. For example, when an employee suffers certain decease and fails to report before getting medical treatment, he can not get any compensation. Workers have the right to sue an organization if they do not get compensation of losses incurred while in service (Hajo, 2008).

Compensation System
Compensation plan


Organizations should respect the employees and ensure their safety because they help in business growth. Employers should avoid thinking that they help employees through payments. Employees assists in organizational growth, and they should be handled with respect. Each organization should respect the laws concerning the employee’s compensations. Employees should also understand their rights of compensation before accepting any job offer.


Ben Hajo(2008). Workers Compensation in America. New York: McGraw-Hill Press.

Holborn Jones, (2012). Labor and Social Insurance Systems. New York: Princeton University Press.

Kennerly Max, (2012). Workers Compensation. California: California University Press.

Mike Duke, (2010). Workers Compensation Systems. Boston: McGraw-Hill Press.

Newton Lee, (2009). Compensation Claims and Benefits. New York: DIANE Publishers.

Simon King, (2007). Social Security Programs. London: Green Lion Publishers.

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