Workers’ Compensation Glossary of Terms
Workers' compensation is the oldest social insurance program. While this glossary was created for the state of California, many of these terms are applicable in all states. Use this glossary of terms to better understand workers' compensation.
California only: California has a no-fault system, which means that injured employees need not prove the injury was someone else's fault in order to receive workers' compensation benefits for an on-the-job injury.
accepted claim/admitted claim. A workers’ compensation claim in which the claims administrator agrees that the worker’s injury or illness is covered by workers’ compensation. Even if a claim is accepted, however, there may be delays or other problems.
agreed medical evaluation (AME). A doctor who is selected by agreement between the injured workers’ attorney and the claims administrator to conduct a medical examination and prepare a medical-legal report to help resolve a dispute.
alternative work. If the treating physician reports that the injured worker will probably never be able to return to the usual and customary occupation that was held at the time of the injury, the employer has the option of offering an alternative position. The new position must be at least 12 months in duration and must pay at least 85 percent of the wages and benefits that were being paid at that the time of injury. It also must be within a reasonable commuting distance of where the injured worker lived at the time of the injury.
Americans with Disabilities Act (ADA). A federal law that prohibits discrimination against people with disabilities. If you believe you've been discriminated against at work because you're disabled and want information on your rights under the ADA, contact a U.S. Equal Employment Opportunity Commission office. For the EEOC office in your area, call 1-800-669-4000 or 1-800-669-6820 (TTY). For additional information, visit the U.S. Department of Labor website.
AOE/COE - Arising Out of Employment, and in the Course Of Employment or caused by a worker’s job and occurring while working. An injury or illness must be AOE/COE to be covered by workers’ compensation.
appeals board. A group of seven commissioners who review and reconsider decisions of workers’ compensation administrative law judges. Also called the Reconsideration Unit. For additional information, visit the California Workers' Compensation Appeals Board website.
applicant/associate/employee (EE). The injured worker.
applicants’ attorney (A/A). A lawyer who represents injured workers in their workers’ compensation cases.
application for adjudication of claim (application or app) : A form (PDF) you file to open a case at the local Workers' Compensation Appeals Board (WCAB) office if you have a disagreement with the insurance company about your claim.
audit unit: A unit within the DWC that receives complaints against claims administrators. These complaints may lead to investigations of the way the company handles claims. Visit the California Department of Workers' Compensation Audit and Enforcement Unit Web page for additional information and forms.
auditor. Person who conducts the audit. This can an be an employee of the insurance company; an employee of the contract company (like ISO) that has been hired by the insurance company to do the audits; or an independent contractor. It is unusual for the same auditor to do your audit from year to year.
benefits increases Table.
benefit structure. The benefit structure defines what injured workers are entitled to receive when they sustain an injury "arising out of and in the course of" (AOE/COE) their employment. There are five basic types of workers' compensation benefits available, depending on the nature and severity of the worker's injury:
Cal/OSHA. A unit within the state Division of Occupational Safety and Health (DOSH). Cal/OSHA inspects workplaces and enforces laws to protect the health and safety of workers in California. Visit the California Department of Safety and Health website for additional information.
California Labor Code. Access Workers' Compensation sections in the California Labor Code.
challenge. Disagree with, object to, or place in dispute
claim form (DWC-1). A form (PDF) used to report a work injury or illness to your employer.
claim adjuster/claim administrator/claim examiner. A person who handles workers' compensation claims for employers. Some claims administrators work directly for large employers that handle their own claims.
classification codes. The state regulates the insurance industry and approves codes that are assigned to specific classes of work types (like administrative clerk, or custodian). These classification codes are used to describe the work being insured and the premium collected for that insurance, so it is important for an insurer to assign the correct classification code to the work actually being done. Sometimes it is appropriate to assign one classification code to part of a person's work and a different classification code to another part of a person's work.
commission on health and safety and workers' compensation (CHSWC): A state-appointed body that conducts studies and makes recommendations to improve the California workers' compensation and workplace health and safety systems. For additional information, visit the California Commission on Health and Safety and Workers' Compensation website.
compromise and release (C&R). A type of settlement where the workers receive a lump sum payment, which includes the permanent disability amount and the estimate future medical care costs.
contractor, independent. Anyone who enters into a contract. More commonly anyone who performs services for a fixed price and undertakes to produce the performance of works or services. The individual, in pursuit of any independent business, undertakes to do work using his/her own means and methods without submitting himself to another's control. The "employer" of a contractor would not pay FICA or Social Security taxes for this individual. He or she is not a paid employee.
current policy term. The period of time that the active policy is in effect. Also see policy term.
cumulative trauma (CT) injury. An injury that was caused by repeated events or repeated exposures at work. Examples: hurting your wrist from doing the same motion over and over or losing your hearing because of constant loud noise.
date of injury (DOI). If the injury was caused by one event (a specific injury), this is the date of the event. If the injury was caused by repeated exposures (a cumulative injury), this is the date that the worker knew of should have known that the injury was caused by work. death benefits. Money paid to qualified surviving dependents of a worker who dies from a work-related illness or injury. These benefits are paid usually at the same weekly rate as the maximum TD benefits in effect at the time of injury/illness. The maximum benefits will vary depending on the number of total and/or partial dependents.
declaration of readiness (DOR or DR). A form (PDF) used to request a hearing before a workers' compensation judge when you're ready to resolve a dispute.
defense attorney (DA). The employer or the employer's insurance carrier’s legal representative.
delay letter. A letter sent by the claims administrator to the injured worker that explains why payments are delayed, what information is needed before payments will be sent, and when a decision will be made about the payments.
denied claim. A workers’ compensation claim in which the claims administrator believes that the worker’s injury or illness is not covered by workers’ compensation and has notified the worker of this decision.
description of employee’s job duties Form RU-91. A form (PDF) filled out jointly by you and the insurance company that helps your treating physician decide whether you will be able to return to your normal job and working conditions.
disability evaluation unit (DEU). A service provided by the state whereby the final medical reports of the Primary Treating Physician or Qualified Medical Examiner are evaluated to provide a summary rating of the permanent disability.
disability rater. An employee of the state Division of Workers’ Compensation who rates an injured worker’s permanent disability after reviewing medical reports or medical-legal reports that describe the worker’s condition.
disability rating. See permanent disability rating.
dispute. A disagreement about the worker’s entitlement to payments, services, or other rights and benefits.
division of workers’ compensation (DWC). A division within the state Department of Industrial Relations (DIR). The DWC administers workers' compensation laws, resolves disputes over workers' compensation benefits and provides information and assistance to injured workers and others about the workers' compensation system. For more information, visit the California Division of Workers' Compensation website.
employee claim form for workers’ compensation benefits (California). A form to report a work injury or illness to your employer.
employer’s report of occupational injury or illness form (CA Form 5020). A form the employer completes to report a work injury to their carrier.
experience modification factor. A calculation that applies to policies with more than $5,000 in premium. Carriers compare individual employers with other employers within the classification based upon the frequency of accidents and severity of injuries.
fair employment and housing act (FEHA): A state law that prohibits discrimination against people with disabilities. If you believe you've been discriminated against at work because you're disabled and want more information on your rights under the FEHA, contact the state Department of Fair Employment and Housing at 1-800-884-1684. In some cases, the FEHA provides more protection than the federal Americans with Disabilities Act (ADA). Visit the California Fair Employment and Housing website.
family and medical leave act (FMLA): A federal law that provides certain employees with serious health problems or who need to care for a child or other family member with up to 12 weeks of unpaid, job-protected leave per year. It also requires that group health benefits be maintained during the leave. For more information, contact the U.S. Department of Labor at 1-866-4-USA-DOL. For additional information visit the U.S. Department of Labor Leaves Benefits website.
field nurse case managers. A nurse assigned to the case, by the insurance company, to attend medical evaluations with the injured worker.
findings and award (F&A). A written decision by a workers’ compensation administrative law judge about an injured worker’s case, including payments and future medical care that must be provided to the worker.
health care organization (HCO). An organization certified by the Department of Industrial Relations to provide managed medical care within the workers' compensation system. Visit the California Division of Workers' Compensation Managed Care Program - HOCs website for additional information.
hearing. A legal proceeding or event where a workers’ compensation administrative law judge holds a meeting to discuss issues or receives information from different persons in order to make a decision about a dispute or a proposed settlement.
independent contractor: There is no set definition of this term. Labor law enforcement agencies and the courts look at several factors when deciding if someone is an employee or an independent contractor. Some employers misclassify employees as an independent contractor to avoid workers' compensation and other payroll responsibilities. Just because an employer says you are an independent contractor and doesn't need to cover you under a workers' compensation policy doesn't make it true. A true independent contractor has control over how their work is done. You probably are not an independent contractor when the person paying you:
- Controls the details or manner of your work
- Has the right to terminate you
- Pays you an hourly wage or salary
- Makes deductions for unemployment or Social Security
- Supplies materials or tools
- Requires you to work specific days or hours
Visit the California Division of Labor Standards Enforcement website for additional information.
independent medical evaluator (IME). A physician selected by the judge (in California) or by the adjuster (in Arizona) to determine the cause of the medical condition, the permanent impairment of the injury, and/or the permanent limitations, if any, that the worker has sustained.
industrial medical council (IMC): No longer in existence. See California Division of Workers' Compensation Medical Unit.
information & assistance (I&A) Officer. An employee of the state Division of Workers’ Compensation who answers questions, assists injured workers, provides written materials, conducts informational workshops, and holds meetings to informally resolve problems with claims. Most of their services are designed to help workers who do not have an attorney.
information &assistance Unit (I&A): A unit within DWC that provides information to all parties in workers' compensation claims and informally resolves disputes. For additional information visit the California Department Division of Workers' Compensation Information and Assistance website.
injury and illness prevention program (IIPP): A health and safety program employers are required to develop and implement. This program is enforced by Cal/OSHA. For additional information see the Guide to Developing Your Workplace Injury and Illness Prevention Program provided by California Department of Industrial Relations.
IRS Form 941. This is a form used by the federal Internal Revenue Service to report income on your employees. It is turned in to the IRS quarterly and is a good source of information for your workers' compensation premium audit because it should be very accurate and comprehensive. Generally, it should not be the only documentation of your compensation for audit purposes. See the IRS.gov website for more details.
IRS Form 944. This form serves the same purpose as the IRS Form 941, but is turned in annually, rather than quarterly. You would usually use only the Form 941 or the Form 944, not both. See the IRS.gov website for details.
mail audit (voluntary audit). This type of audit relies on you to send in to your insurance carrier the compensation information on your employees. GuideOne provides a form for you to use that asks for the required information. You do not need to work with an auditor to do this type of audit.
medical care. All medical treatment necessary to cure or relieve the effects of a work-related injury or illness will be paid either by the employer or the insurance company providing coverage. This includes physician services, hospitalization, physical restoration, dental care, prescriptions, X-rays, laboratory services, and all other necessary/reasonable care ordered by the treating doctor(s). Injured workers are entitled to receive all medical care reasonably required to cure or relieve the effects of the injury, with no deductible or co-payments by the injured worker
medical provider network (MPN): An entity or group of health care providers set up by an insurer or self-insured employer and approved by DWC's administrative director to treat workers injured on the job. For a list of providers visit the California Division of Workers' Compensation Medical Providers Networks website.
modified job (mod work). If the treating physician reports that the injured worker will never be able to return to the same job duties that they had at the time they were injured, the employer is permitted to offer the injured worker a modified job instead of vocational rehabilitation benefits; that is the current job at the time of the injury with changes that meet the doctor’s work restrictions. It must last at least 12 months and pay the same wages and benefits as the job at the time of the injury.
offer of modified or alternative work form RU-94. A form (PDF) you get from the insurance company if: you were injured before 2004 and; your treating physician says you probably will never return to your job or one like it and; your employer is offering modified or alternative work instead of vocational rehabilitation benefits.
offer of modified or alternative work (DWC form #AD 10133.53): A form (PDF) you get from the insurance company if: you were injured in 2004 or later and; your treating physician reports you have a permanent disability and; your employer is offering modified or alternative work instead of a supplemental job displacement benefit. This form also explains how your permanent disability payments may be lowered by 15 percent because your employer is returning you to work.
penalty. A fine charged to an employer or claims administrator and paid to the injured worker. It can refer to an automatic 10 percent penalty for a delay in one payment, or a substantial penalty for unreasonable delays in one or more payments.
permanent alternate position. If the treating physician reports that the injured worker will never be able to return to the same job duties that they had at the time they were injured, the employer is permitted to offer the injured worker an alternate position job instead of vocational rehabilitation benefits. The new position must last at least 12 months, and pay at least 85 percent of the wages that the injured worker was making at the time of the injury.
permanent disability (PD) benefits. Money paid if an injury or illness results in a permanent impairment that reduces the injured workers ability to compete in the open labor market. The amount the employee will receive depends on the extent of the disability. Other factors that are considered when calculating PD include the date of the injury, the age when injured, and occupation. PD benefit amounts are set by law. PD benefits are paid every two weeks until the benefit is completely paid or when the employee settles the case and receives a lump sum. (Also see the Workers' Compensation Benefits Increases Table.)
permanent disability rating schedule (PDRS): A DWC publication (PDF) containing detailed information used to rate permanent disabilities. One of three schedules will be used to rate your disability, depending on when you were injured.
permanent modified position. If the treating physician reports that the injured workers will never be able to return to the same job duties that they had at the time they were injured, the employer is permitted to offer the injured workers a modified job instead of vocational rehabilitation benefits. The modified job is the current job at the time of the injury with changes that meet the doctor’s work restrictions. the midfield job must last at least 12 months and pay the same wages and benefits as the job at the time of the injury.
permanent partial disability (PPD) benefits. Payments to a worker who can still work, but whose ability to compete in the open labor market is reduced. (Also see the Workers' Compensation Benefits Increases Table.)
permanent total disability (PTD) benefits. Payments to a worker who is considered permanently unable to compete in the open labor market. (Also see the Workers' Compensation Benefits Increases Table.)
permanent disability (PD) rating. The numerical assessment of a physician's description of an injured worker's permanent disability. This is derived by applicant of the functions in the permanent disability rating manual to the language used by the physician to describe the disability, usually involving workers' compensation terms.
petition for reconsideration (Recon): A legal process to appeal a decision issued by a workers' compensation judge. Heard by the Workers' Compensation Appeals Board Reconsideration Unit, a seven-member, judicial body appointed by the governor and confirmed by the Senate. For additional information, see How to File a Petition for Reconsideration (PDF) provided by the California Division of Workers' Compensation.
qualified injured worker (QIW). An injured worker who probably will never be able to return to his or her usual job and working conditions, and who probably could find a suitable job after receiving vocational rehabilitation services.
qualified medical evaluator (QME). A doctor who is selected by either the injured worker, the worker’s attorney, of the claims administrator to conduct a medical examination and prepare a medical-legal report to help resolve a dispute. QMEs are certified by the state Industrial Medical Council.
reconsideration (recon). A legal process for appealing a decision made by a workers' compensation administrative law judge.
reconsideration of a summary rating. A process used when you don't have an attorney and you think mistakes were made in your permanent disability rating. A guide (PDF) on how to file an appeal is provided by California Division of Workers' Compensation.
rehabilitation unit. A unit within DWC that resolves vocational rehabilitation disputes, approves potential settlements of vocational rehabilitation services, and reviews and approves vocational rehabilitation plans for injuries that happened before Jan. 1, 2004. Visit the California Division of Workers' Compensation Rehabilitation Unit website for additional information.
serious and willful misconduct (S&W). A petition (PDF) filed if your injury is caused by the serious and willful misconduct of your employer.
settlement. An agreement between the injured worker and the claims administrator about the worker’s compensation payments and future medical care that will be provided to the worker. Settlements must be reviewed by a workers’ compensation administrative law judge to determine whether they are adequate.
specific injury (SP). An injury that was caused by one event at work. Examples: hurting your back in a fall, getting burned by a chemical that splashes on your skin, getting hurt in a car accident while making deliveries.
state auditor. State auditors are employees of the state who do an additional audit to ensure that the commercial audit was accurate and met legal requirements. The state only samples all of the policies being audited, so it would be rare for you to be audited by the state. If you are audited by the state, it is important that you give the state auditor the same information that you gave your insurance auditor, or make clear to the state auditor what information you may have changed.
state disability insurance (SDI). A partial wage-replacement insurance plan paid out to California workers by the state Employment Development Department (EDD). SDI provides short-term benefits to eligible workers who suffer a loss of wages when they are unable to work due to a non work-related illness or injury, or a medically disabling condition from pregnancy or childbirth. Workers with job injuries may apply for SDI when workers' compensation payments are delayed or denied. Call (800) 480-3287 for more information on SDI or visit the California Employment Development Department website.
statement of duties, GuideOne. Form provided by GuideOne that records the duty descriptions of employees. This form will be filled out or reviewed by the auditor at the time of the audit. It would be easier and probably more accurate if the insured filled it out throughout the year and presented it to the auditor at the time of audit.
stipulations with request for award (Stips). A type of settlement where the claims administrator usually agrees to continue paying for medical care for the injury, after agreeing to a particular level of permanent disability.
subjective factors. The amount of pain and other symptoms reported by an injured worker, which cannot be directly measured or observed, that a doctor describes as contributing to the worker's permanent disability.
suitable, gainful employment. Employment or self-employment that is reasonably attainable and that offers an opportunity to restore the injured worker as soon as practicable and as near as possible to maximum self-support.
temporary disability (TD). Paid if a physician verifies that an injured employee cannot work because of work-related illness or injury. TD benefits are not paid for the first three days of work missed unless the employee is off more than fourteen days or hospitalized. The amount of TD compensation is determined by law and is two-thirds of the employee’s wages. Payments must be made every two weeks for as long as the employee is eligible. TD benefits stop when the employee returns to work or treating physician releases the employee for work or says that the injury has reached a point of maximum improvement. (Also see the Workers' Compensation Benefits Increases Table.)
temporary partial disability benefits (TPD). Payments to a worker who can do some work while recovering but who earns less than before the injury. (Also see the Workers' Compensation Benefits Increases Table.)
temporary total disability benefits (TTD). Payments to a worker who cannot work at all while recovering. (Also see the Workers' Compensation Benefits Increases Table.)
transportation expenses. A benefit to cover your out-of-pocket expenses for mileage, parking and toll fees related to a claim. Usually a reimbursement. A medical mileage expense form (PDF) is available from the California Division of Workers' Compensation.
transportation reimbursement. Paid by the insurance carrier or employer for the reasonable cost of transportation incurred while obtaining medical care and rehabilitation. The injured worker is entitled to round trip mileage from his or her home or work to the place of treatment, examination, or rehabilitation at the rate of .34 cents per mile (as of 11.01.02).
Uninsured Employers Fund (UEF). A fund, run by the DWC, through which your benefits can be paid if your employer is illegally uninsured for workers' compensation. For additional information, visit the California Division of Workers' Compensation Special Funds Unit website.
utilization review (UR). The process used by insurance companies to decide whether to authorize and pay for treatment recommended by your treating physician or another doctor. Visit the California Division of Workers' Compensation Utilization Review website for additional information.
vocational rehabilitation (VR). Once a physician determines that an injured worker is medically eligible and unable to return to his or her previous type of work, the employer and worker jointly select a rehabilitation counselor who will determine whether vocational rehabilitation is feasible, and if appropriate, develop a suitable rehabilitation plan. The goal of a rehabilitation plan is to return the injured worker to suitable, gainful employment. The benefits are paid if it is unlikely a worker will be able to return to the usual job prior to his/her injury and the employer does not offer other work.
vocational rehabilitation maintenance allowance benefits (VRMA) are paid while the employee is participating in vocational rehabilitation. VRMA is paid every two weeks for as long as the employee is eligible. For injuries occurring on or after January 1, 1994, there is a $16,000 limit on all rehabilitation benefits.
voluntary audit. See mail audit.
work restrictions. A doctor’s description of clear and specific limits on an injured worker’s job tasks, usually designed to protect the worker from further injury. workers' compensation audit. A review of the compensation paid during the policy term to determine whether the exposure used to determine the original premium was accurate. If during the policy term, the actual exposure changed from the original estimate of what it would be, then an adjustment to the premium would be made at the time of the audit. If there was more exposure than the estimate indicated, then more premium will be charged. If there was actually less exposure than the estimate, premium will be refunded.
workers’ compensation appeals board (WCAB). Consists of 24 local offices throughout the state where disagreements over workers' compensation benefits are initially heard by workers' compensation judges. The WCAB Reconsideration Unit in San Francisco is a seven-member, judicial body appointed by the governor and confirmed by the Senate that hears appeals of decisions issued by local workers' compensation judges.
workers' compensation administrative law judge. An employee of the state Division of Workers’ Compensation who makes decisions about disputes and approves settlement. The administrative law judges hold hearings at Workers’ Compensation Appeals Board (WCAB) offices, and their decision may be reviewed and reconsidered by the Appeals Board. Also called "Workers’ Compensation Judge." For a list of appeals board offices, visit the California Division of Workers' Compensation Appeals Board website.
workers' compensation insurance. Insurance that provides compensation to a worker (not the employer) when the worker cannot continue to work. It is based on the compensation that the worker was receiving before becoming unable to work.
workers' compensation insurance rating bureau (WCIRB). An agent of the state Department of Insurance and funded by the insurance industry, this private entity provides statistical and rating information for workers' compensation insurance and employer's liability insurance, and collects and tabulates information to develop pure premium rates. Visit the WCIRB California website for additional information.
California Workers’ Compensation Handbook, Stanford D. Herlick., 2001 Edition.
State of California, Workers’ Compensation Web page.
Workers’ Compensation, Laws of California, 2003 Edition.
© 2018 The GuideOne Center for Risk Management, LLC. All rights reserved.This material is for informational purposes only. It is not intended to give specific legal or risk management advice, nor are any suggested checklists or action plans intended to include or address all possible risk management exposures or solutions. You are encouraged to retain your own expert consultants and legal advisors in order to develop a risk management plan specific to your own activities.