Worker's compensation often referred to as workers' comp, is a legal system that provides financial and medical benefits to employees who suffer job-related injuries or illnesses. It is a fundamental aspect of human resources management, aiming to protect both employees and employers. Worker's compensation ensures that injured or ill employees receive appropriate medical care and financial support while relieving employers from potential lawsuits related to workplace injuries.

Example
An employee working in a manufacturing plant sustains a back injury while lifting heavy machinery. Under worker's compensation, the injured worker would receive medical treatment, including doctor visits, surgery if necessary, and rehabilitation services, all covered by the employer's insurance. Additionally, the employee would receive wage replacement benefits during their recovery period, ensuring they can meet their financial obligations while unable to work. This system helps maintain a safe work environment and supports employees in times of need while safeguarding the employer from extensive legal liabilities.