Future Business Leaders of America (FBLA) Business Law Practice Exam

How does workers' compensation typically benefit employees?

1. It reduces their taxable income

2. It guarantees permanent employment

3. It provides financial support during recovery from work-related injuries

4. It offers annual bonuses based on performance

The correct answer is: It provides financial support during recovery from work-related injuries

Workers' compensation is designed to provide financial support to employees who suffer from work-related injuries or illnesses. When an employee is injured on the job, they can receive compensation that covers medical expenses, rehabilitation costs, and a portion of lost wages while they recover. This system ensures that employees do not face financial hardships during their recovery, allowing them to focus on healing without the added stress of lost income. The benefits provided by workers' compensation are crucial for employees as they help to mitigate the impact of an injury on their livelihood. This system promotes a safer workplace and encourages timely reporting of injuries, which can lead to improved workplace safety measures. In contrast, the other options do not reflect the primary function of workers' compensation. For instance, it does not serve to reduce taxable income or guarantee permanent employment, as these aspects are unrelated to the compensation structure that addresses injury and recovery. Additionally, while performance bonuses may be part of an employer's benefits package, they do not pertain to the specific protections and provisions provided by workers' compensation laws.