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Psychological Impact of Losing Workers Compensation Benefits

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Workers’ compensation is the benefits an employee receives when they get injured in the workplace or whenever the injury is caused by their jobs. These benefits aid workers with some form of financial assistance (usually monetary) while they can’t attend to work because of their injuries. 

Workers need to have this benefit because it provides them security. Whatever happens to them within the jurisdiction of their jobs, they will be compensated. These benefits do not only cover physical injuries but also illness. Some work comps are extending their coverage for Covid damages. 

Losing workers’ comp benefits can have a psychological impact on employees. This loss can affect how they perform at work and home. It can also affect their mental health. Here are more detailed psychological effects to workers losing benefits:


Salary and work benefits are one of the ways a company or employer can show their gratitude to their employees. These are a sign of how they treat them. With these, employees gauge how they are valued by the company. 

So losing this benefit could make employees feel that they are no longer valued. They may think that they are no longer important for the company. They might resent their employers. 

Since workers feel undervalued, it will lead to more conflict for employees and the company. The feeling of being valued less can result in workers not performing well in their jobs. 

Lower morale

For employees who feel like they are not valued, it will also affect their mood – their morale will also be affected. 

Similarly to how work benefits, like workers’ comp benefits, let the company show how much they value employees, these benefits are also what attracts and motivates an employee to keep on working and stay at the company. 

Employees will feel that the job is not worth it anymore because they are not insured. There will be a difference in the workplace atmosphere. Once morale is affected, it will be evident that the workers are not happy with what they are doing.


One of the possible impacts to employees, when they lose their workers’ compensation benefits, is that they become unsatisfied with what they are doing. They do not feel content with the tasks. 

Employees are not able to meet their basic needs like self-actualisation. To them, it may seem that their job will be more of a burden than a benefit. There have been studies that show how the same employees had lower job satisfaction just because of the change or loss of comp benefits. 

Their unsatisfied needs, both material (benefits) and psychological (self-actualisation and self-esteem), will relate to them having low morale at work. 

Decreased productivity

Naturally, due to being undervalued and unsatisfied and also the decrease in morale, the workers will perform poorly. Employers can’t expect workers to work hard without the benefits. Without it, workers would not be productive and will not be able to get tasks done. 

Aside from decreased productivity, there will also be an effect on their work’s qualities. Employees would not be motivated to do the job well. They will be doing their work to the bare minimum since they are also receiving the bare minimum. 

Reduced loyalty

Employees would not be that loyal to their companies when they lose comp benefits. They would not trust them. This would affect the relationship between the company and the employees. 

They would always have doubts about the decisions concerning them made by the company. Employees would feel that they should leave and find other companies that will provide and cater to their needs.  

Feeling unsafe

Aside from how it affects employees in the workplace, it also affects them personally and their families. A work comp in Georgia would provide income for them when they can’t physically do their jobs because of a work-related injury. When they are not able to get this compensation, they will feel unsafe. 

Since they are not insured, they would not feel safe working. This is alarming especially for those who have dangerous jobs like construction workers. There will be no assurance that they will be able to provide for their families if ever something happens to them.

Workers’ comp benefits do not only give them medical care and financial assistance. This benefit can also protect them from becoming liable for their injuries. If they do not have this benefit, they can easily be demanded by their employers even if they are not at fault. 


Employees will already be stressed because of the injury they received due to their occupation. Since they would not be able to work because of a work incident they would not be able to get a salary. That is why the work comp benefits are important to them.

If they lose it, there are no doubt employees will feel an excessive amount of stress. The lack of benefits will result in many problems for them. No compensation means they do not have money. 

They will be stressed about how to get money for their personal and family’s everyday needs. They can form anxieties because of the stress. There are also cases wherein the lack of compensation results in heavy problems that employees become depressed. It causes so much worry that sometimes they experience sleeping disorders. 

It is unfortunate when an employee falls ill or gets injured because of their job. However, it is much worse when they can’t earn money because of these injuries. They rely on workers’ comp benefits to help them get by the days or weeks that they would not have a salary. 

Losing the workers’ comp benefits will be devastating for employees. It will negatively affect them tremendously. It will have a psychological impact on them that can even be hazardous for their health. 

The loss of work comp benefits will make them feel undervalued. It will also affect their morale and how they perform in the office. They would not be satisfied being part of and working for the company. It is easy for them to lose trust and replace their loyalty to other companies. 

It will definitely affect their mind. The lack of insurance will make them feel unsafe to work. No work comp benefits bring a harmful amount of stress that can cause anxiety, depression, and sleeping disorders. 

Tommy Williamson did his degree in psychology at the University of Edinburgh. He has an ongoing interest in mental health and well-being.

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