Workers' compensation (colloquially known as workers' comp in North American English or compo in Australian English) provides insurance to cover medical care and compensation for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain". While schemes differ between jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance). General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in worker compensation plans. Cash benefits are established by state formulas with maximum benefit level. The benefits are administered on a state level, primarily by the state department of labor.

These laws are usually a feature of highly developed industrial societies, implemented after long and hard fought struggles by trade unions. Supporters of such schemes believe they improve working conditions and provide an economic safety net for employees. Conversely, these schemes are often criticised for removing or restricting workers' common law rights (such as suit in tort for negligence) in order to reduce governments' or insurance companies' financial liability.

Employees' compensation laws were first enacted in Europe and Oceania, with the United States following shortly thereafter. Workers' compensation programs were a key component of the labor structure of the former Soviet Union and similar societies.