Certified Disability Management Specialist (CDMS) Practice Exam 2025 – Comprehensive All-in-One Resource for Exam Success

When a company fails to comply with state workers' compensation laws, it significantly undermines its ability to defend against employee lawsuits. Workers' compensation is a form of insurance that provides benefits to employees who suffer job-related injuries or illnesses. In exchange for these benefits, employees typically relinquish their right to sue their employers for negligence related to those work injuries.

If a company is found to be non-compliant with workers' compensation regulations, it may lose the protections that these laws afford, exposing it to lawsuits from injured employees. This lack of compliance can be interpreted as negligence or a failure to meet legal obligations, making it more difficult for the company to successfully defend itself in court. The legal liabilities increase substantially, as the company may be held liable for damages that would otherwise be covered under workers' compensation.

Therefore, the failure to comply with these laws directly impacts the company's legal defenses, placing it at greater risk in potential lawsuits from employees.