Why have a waiting period before workers' compensation benefits begin?

The waiting period is a gap between the time that a work-related injury or accident occurs and the time that the payment of compensation benefits begins. It does not apply to medical or hospital care, which is paid from the time of injury regardless of the fact that income-replacement benefits are not being paid. In some states the waiting period only applies to temporary disabilities.

The waiting period serves to reduce the cost of workers' compensation coverage by eliminating a large number of small payments, thereby reducing administrative costs. The waiting period may be covered by paid sick days, as it runs from three to seven days in most instances, so the employee may not be without a source of income for the first days of a disability period. Further, most states provide that the waiting period is paid retroactively if the disability lasts a specified length of time.

If a disability resulting from a work-related injury lasts a specified length of time, most states permit the payment of benefits to cover the waiting period. The length of time that a disability must last before retroactive payment of benefits is required varies from five days to 42 days.

A few states provide that the waiting period before compensation benefits begin is canceled if the injured employee is hospitalized. For state-specific information, see Survey State Laws.