If you are a UK subsidiary of a US parent, then understanding the differences between Workers’ Compensation and UK Employers’ Liability might be challenging for you, or your parent company. Yet, there may be differences that need addressing at a local level.
US workers’ compensation laws were largely influenced by the Employer liability laws in Europe. Employers' Liability Insurance (ELI) is the equivalent to Workers' Compensation and is a legal requirement in the UK for any business with employees (with some exemptions such as family businesses and most public organisations).
In the United States as well as the UK, injuries in the line of work are covered by the workers’ compensation insurance. In both cases, the employer requires proof that the injury or the illness was a direct result of the workers’ occupation and work.
In the US, workers’ compensation is a no-fault system meaning that it doesn’t matter if the employee was responsible for the accident that led to injuries or not, they are entitled to workers’ compensation benefits either way.
In the UK employees who are injured or made ill at work because of an act or omission by their employer may be entitled to bring a claim for damages in the civil courts. This does not give the employee an automatic right to compensation but, if the employee’s civil action succeeds, the insurance policy (ELI) will ensure that the employee is compensated.
The insurance policy must provide cover of at least £5 million arising out of any one occurrence. The insurance is provided by private insurance companies who in some cases also provide some preventive services such as testing and inspecting high-risk plant. Such tests and inspections are required by law for plant such as pressure systems and lifting machinery and equipment.
Commuting is one of the biggest differences between the workers’ compensation laws. In the United States as well as most of Europe, workers are compensated for the injuries obtained during the commute. However, the UK do not cover accidents during commutes to and from work.
The UK enforcing body The Health and Safety Executive (HSE) advise that ‘As long as you have taken reasonable steps to prevent accidents or harm to your employees, you shouldn’t have to pay compensation’. These reasonable steps encompass a well-documented and effectively implemented occupational health and safety management system.
Sources: HSE - Employers’ Liability (Compulsory Insurance) Act 1969 A brief guide for employers - https://www.hse.gov.uk/pubns/hse40.htm
OSHA Education Center - https://www.oshaeducationcenter.com/articles/workers-comp/
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