Understanding the Difference Between Workers’ Comp and Unemployment Benefits

When faced with a workplace injury or job loss, understanding your options for financial assistance is very important. In Minnesota, two primary systems exist to help workers in different circumstances: workers’ compensation and unemployment benefits. While both provide financial support, they serve distinct purposes and have different eligibility requirements.

What Is Workers’ Compensation in Minnesota?

Workers’ compensation provides benefits to employees who suffer work-related injuries or illnesses. This form of insurance coverage follows a no-fault system; this means that employees don’t need to prove employer negligence to receive benefits, and employers cannot use employee negligence as a defense against claims. Multiple conditions may be covered by workers’ comp, including traumatic injuries, repetitive injuries, occupational diseases, and certain mental health conditions like post-traumatic stress disorder. 

By filing a claim for workers’ compensation, employees can recover three main types of benefits:

• Wage Loss Benefits: After a workplace injury or illness, employees may not be able to return to work for a period of time. During this period, they can recover temporary disability benefits via workers’ comp. If the worker suffers permanent impairment, they can recover ongoing permanent disability benefits.
• Medical Benefits: Workers’ compensation will provide coverage for necessary medical treatment related to the work injury. If the employee needs to travel to receive specialized care, they can recover benefits to help pay for these expenses.
• Vocational Rehabilitation Benefits: In some cases, the injury or illness is so severe that the employee cannot return to their previous position. Workers’ comp will provide financial assistance to help them return to work, which may include job placement services or retraining.

What Are Unemployment Benefits in Minnesota?

Unemployment benefits provide temporary financial assistance to workers who have lost their jobs through no fault of their own. The Minnesota Department of Employment and Economic Development (DEED) administers this program.

To be eligible for unemployment benefits in Minnesota, applicants must meet the following criteria:

• Earning Requirements: Their past earnings meet minimum thresholds set by the state. Currently, employees must have earned wages that were at least 5.3% of the statewide average annual wage during the four most recently completed calendar quarters.
• Circumstances of the Job Loss: Their job loss is due to circumstances outside of their control, such as layoffs, reductions in force, or termination for reasons other than misconduct. If the employee quit their job, they must have had a good cause, such as relocating for a spouse’s job or escaping domestic violence.
• Ability and Willingness to Work: The employee is able to work, available for work, and actively seeking employment.

Are Workers’ Comp or Unemployment Benefits Right for You?

If you are exploring your options for financial assistance, you may wonder whether you should pursue a workers’ comp or unemployment claim. This choice will depend on the circumstances surrounding your job loss or inability to work.

If you are unable to work due to a job-related injury or illness, workers’ compensation is likely the appropriate option. However, if you have lost your job due to layoffs, company downsizing, or other non-injury reasons, unemployment benefits may be more suitable. 

In these situations, it is best to consult with an attorney to learn which option is right for you. A Minneapolis workplace injury attorney can provide valuable assistance, from evaluating your options to guiding you through the legal process. Contact a lawyer as soon as possible to discuss your next steps.