# What is workers' compensation?

Source: https://launch-rec.com/glossary/workers-compensation. Category: Compliance. Market: US.

## Definition

Mandatory insurance covering workplace injury. Premiums are set by state and job class code, and form a large part of employment burden in manual niches.

## In practice

A clerical class code might cost under 1% of payroll; a construction or warehouse code can be many multiples of that. Your niche choice is also an insurance decision.

Misclassifying a job code to reduce premium is treated as premium fraud and is uncovered at audit, with retrospective billing.

## Related terms

- https://launch-rec.com/glossary/employment-burden
- https://launch-rec.com/glossary/state-registration