Workmen’s Compensation

BIBLIOGRAPHY GENERAL WORKS

SERIAL PUBLICATIONS

Workmen’s compensation legislation, intended to assure some recompense for occupational injuries sustained by workers, is the most prevalent form of social insurance—universal in advanced countries and widespread even among developing nations. It is generally among the first social welfare measures to be adopted. Its early acceptance has been facilitated by the fact that it usually does not create a wholly new benefit for workers but replaces existing common law or statutory rights to indemnity for injuries attributable to the employer. It is also generally associated with incentives for prevention of accidents. Moreover, individual and social costs of failure to meet the losses sustained in work injuries and fatalities are especially conspicuous. The necessity for dealing with the problem appears to appeal to a common sense of justice.

European origins . Germany provided the pioneering workmen’s compensation act in 1884, following rapidly upon enactment of its compulsory sickness insurance act a year earlier, although specific laws providing compensation for particular groups of workers date back to the eighteenth century. British legislation followed in 1897, but it departed widely from the German design. The different patterns adopted by these countries became the two central influences upon compensation legislation in the Western world. In retrospect, most authorities now agree that it has proved unfortunate that the British pattern was the one largely followed in the United States, mainly because it was better known there.

Before the adoption of workmen’s compensation legislation, an occupationally injured worker could secure redress only by suing his employer. Everywhere this was slow, costly, and usually ineffective. The legal defenses available to an employer, against whom fault had to be proved, were numerous and formidable, and awards for workers were few and meager. Both Germany, in 1871, and England, in 1880, had first experimented with employer’s liability laws, which were designed to remove or abate some of the more unfair defenses. In both countries such measures were soon found unsatisfactory.

The basic differences between the German and British approaches to compensation, in capsule form, were as follows.

(1) The German required compulsory insurance by the employer with nonprofit public entities which were obliged to ensure that workers received the benefits due them. The entire system was under the administrative supervision of the Federal Insurance Office, and disputes were adjudicated through special courts. In England, employers were declared legally liable for industrial injuries, but insurance was not mandatory. In practice, most large employers did insure with private carriers. Claims for compensation were settled by negotiation between the worker and the employer or insurance carrier. Disputes were carried through the conventional court system. The British regarded the law as self-administering and provided no official administrative agency for supervision of the system. In Germany, protection of the worker’s rights had become a state obligation; in Britain, it was still basically a private matter.

(2) Litigation was minimized in Germany and was never a cost to the worker. It continued to be a prominent feature of British experience, although the worker’s chances had been improved.

(3) In addition to the cash compensation for wage loss, the German law originally also provided medical care benefits (connected with sickness insurance funds), and by 1925 it had added rehabilitation benefits as one part of an increasing emphasis on restoring the injured worker to employability. The British made no specific provision for medical care or rehabilitation.

(4) The German system provided lifetime payments for permanent disability and for widows and children in death cases. Lump-sum settlements were permitted only for minor disabilities. The British law encouraged lump-sum settlements in cases of permanent disability, and they were mandatory in fatalities.

These undesirable features of the British tradition, which was abandoned in Great Britain shortly after World War II in favor of a basically new approach, are still prominent in American legislation and practice.

Development in the United States . Workmen’s compensation came late in the United States, although almost three decades before any other form of social insurance. The frightful human toll of maimings and fatalities around the turn of the twentieth century, years during which industrial accidents were reaching record-breaking heights, aroused the national conscience. Industrial safety, hygiene, and compensation represented three parallel reform movements. In the United States, employer’s liability legislation also preceded workmen’s compensation. By 1910 practically every state had passed some sort of employer’s liability statute. But here, too, these soon proved inadequate, merely mitigating the harshness and cumbersomeness of the common law. The essential basis of employer’s responsibility remained tort liability.

The first state acts to be based on the compensation principle of “liability without fault” —establishing employer liability for assured but limited compensation, irrespective of fault, in return for the worker’s forsaking common law rights to unlimited damage suits—were enacted by Maryland in 1902, Montana in 1909, and New York in 1910. All these were held unconstitutional. But by this time public opinion was highly aroused. Under the leadership of President Theodore Roosevelt, an act covering some categories of federal employees was passed in 1908. In 32 states, 40 official commissions investigated and strongly condemned the existing legal situation and with virtual unanimity recommended adoption of laws based on “liability without fault.”

Despite the adverse constitutional decisions, 30 compensation laws were enacted between 1910 and 1915. But the negative constitutional rulings, particularly in regard to the New York act by the Court of Appeals in 1911, had marked effects. Although seven states amended their constitutions to make certain that compensation would be legal, most laws were narrowed and restricted because of the decisions. In 1917 the issue of constitutionality was permanently settled by the U.S. Supreme Court, which declared the state police power an adequate basis for all proposed types of compensation laws. But the earlier rulings left an enduring and heavy heritage of “elective” provisions and limited coverage of industries, occupations, and injuries, which curtailed the effectiveness of the laws.

By 1920 all but six states had enacted legislation; action by Mississippi in 1948 completed the roster. Today every state operates some kind of workmen’s compensation program. In addition, there are three federal jurisdictions: the District of Columbia, federal government employees, and longshoremen and harbor workers. Most states require subject employers to carry insurance with private companies or to give proof of ability to self-insure. Eighteen states have state funds, eleven of which are “competitive” with private carriers; seven are “exclusive,” although in two of these self-insurance is also permitted.

Since about 63 per cent of the business is carried by private companies and 12 per cent is handied by self-insurance, and since the states assume widely varying degrees of supervision or involvement in the system, data on workmen’s compensation experience have always been inadequate. For example, about a score of states do not have such basic data as the amount of benefits paid, by type of insurer or by type of benefit, and about 35 states have no information on number of covered workers or amount of covered payrolls. Fortunately, the Social Security Administration, which has no operational responsibilities in this field, has carefully developed techniques for obtaining reliable estimates of essential data.

Coverage. Despite wide coverage, workmen’s compensation has never really supplanted the common law and employer’s liability legislation, especially the latter, as remedies for occupational injury. About one-fifth of United States workers are still not covered, a proportion that has remained stable over the past decade. Prominent among the omissions are interstate railway workers and merchant seamen, who feel that their experience under special federal employer’s liability legislation compares favorably with that of workers under state compensation systems. Noncoverage at the state level is attributable to elective laws and exclusion of certain types of employment (e.g., small firms, agricultural work, domestic employment). State laws vary widely in these, as in other, respects. In 13, the ratio of actual to potential coverage is less than 65 per cent. In addition, some types of injuries, particularly occupational diseases (as distinguished from “accidents"), are excluded. Only two states still fail to cover any occupational diseases, but 20 more do not cover all of them. Since World War II, protection has been greatly broadened through liberal judicial interpretation of causal relationship of injury to employment and the meaning of such terms as “accidental injury.”

Benefits. There are three categories of compensation benefits—cash, medical, and rehabilitation— intended to indemnify the injured worker or surviving dependents for loss of wages and/or occupational capacity and for medical and hospital expenses and, where possible, to restore working capacity. Since the end of World War II, cash compensation has fairly constantly represented about two-thirds of total payments, while medical care and related costs have consumed about one-third.

Cash benefits vary in accordance with four classes of injuries: temporary total disability, permanent partial disability, permanent total disability, and death. One of the basic concepts of the American systems was that benefits should be proportionally related to wage loss, as distinguished from uniform benefit amounts paid in Britain. Most of the statutes express the intent to replace about two-thirds of the weekly wage during total disability. However, there are many qualifications in the formulas, including a weekly dollar maximum, a maximum total dollar amount, a maximum amount of time for which benefits may be paid, and a waiting period. In practice, adjustments in these statutory limitations have lagged far behind changes in wage scales, with the following conspicuous results: (1) the weekly maximum has become the effective rate for so large a proportion of beneficiaries as to approximate a flat-sum system;

(2) benefit levels have fallen far below the intended objective for the majority of workers; and

(3) the effective rate of compensation, as a percentage of lost earnings, is considerably lower today than it was in the early periods of the programs.

Recent estimates indicate that, on the average, cash benefits do not replace more than one-third of wage loss. The proportion is highest for temporary disability cases, considerably lower for permanent disability, and lowest for death cases, where the ratio probably does not exceed 15 per cent. This does not take into account the worker’s outlay for medical expenses in states which still limit such benefits, or the legal fees he may have to pay in contested cases. Despite the original intent of workmen’s compensation, much the largest share of the cost of industrial injury falls on the worker and his family or on public assistance or private charity.

Medical benefits are in some degree now included in all the laws and represent the most significant quantitative advance in the programs since the beginning. In part, this progress derives from recognition that effective medical care constitutes a long-term economy, for it reduces the period or intensity of disability. Nonetheless, about half the states still retain some limitations on the time, the amount of expenses, or the types of injury covered.

Qualitatively, medical care progress has been less impressive. Inadequate medical administration and failure to orient medical care toward rehabilitation have been subject to growing criticism from all quarters. In less than half the states does the workmen’s compensation agency have any authority to supervise medical care, despite the uniform testimony to this necessity from such sources as the American Medical Association and the American College of Surgeons.

In recent years, with the rapid advance of rehabilitation techniques, the theoretical focus of workmen’s compensation has been sharply shifted from concentration upon indemnity to maximum restoration of the worker to his previous condition. Despite almost universal verbal dedication of experts and administrators to the principle that rehabilitation should now be the primary goal of the compensation process, because of both its distinct economies and its humanitarianism, the programs have not responded to the new needs. Only half the workmen’s compensation jurisdictions have any specific provisions in their acts to encourage rehabilitation, and these vary widely in their adequacy. Most workmen’s compensation recipients who need such services do not receive them. For those who do, the delay between injury and acceptance for rehabilitation is so long as to threaten the success of the undertaking. Lack of supervision of the kind and quality of medical care has been a major obstacle.

Many authorities have alleged that the basically litigious and indemnity-oriented character of workmen’s compensation generates disincentives to acceptance of rehabilitation procedures. This has led to recommendations that in permanent disability cases compensation be based upon degree of physical impairment rather than on loss of earning capacity. The widespread practice of commutation of periodic benefit rights into lump-sum settlements, which removes the worker from the purview of the workmen’s compensation system (and frequently otherwise defeats the program’s purpose), has also retarded rehabilitation.

The significance of the issue is enlarged by the fact that steady growth of other social insurance and welfare measures, which often overlap with workmen’s compensation, is steadily relegating the latter to a supplementary place in financial protection. The distinctive role of workmen’s compensation is increasingly in its rehabilitation potential. Little wonder that the challenge of rehabilitation is widely regarded as both the crucial opportunity and the Achilles’ heel of workmen’s compensation. Canadian programs, particularly in Ontario, have amply demonstrated that rehabilitation can successfully be made the core of an effective workmen’s compensation system. Although the Canadian practices are widely spoken of in the United States with unstinted admiration, they have nowhere been imitated there.

Costs. The aggregate annual cost of the system to employers has consistently been less than 1 per cent of payroll in covered employment since the end of World War II, moving between 0.90 per cent and 0.99 per cent in all the years from 1946 to 1962. Before the war, costs were as high as 1.2 per cent. National averages conceal great variations among states, industries, and individual employers, rising from negligible proportions to 30 per cent or more of payroll in extra-hazardous industries in some states. The major issue in respect to cost has been the high proportion which fails to find its way into benefits. Overhead expenses of insurance— the major factor—and administration consume about 40 per cent of total costs, far more than in any other form of social insurance.

Major issues in the United States . After more than a half century of experience, workmen’s compensation in the United States is under severe and fundamental challenge as to whether it can meet its stated objectives and, more profoundly, whether the original objectives are adequate for contemporary conditions. The programs have not exhibited adaptability and dynamism commensurate with the altered environment. In part this is related to declining interest. Both absolute and relative rates of injury are decreasing; the injury severity rate (measured by lost workdays) has declined steadily; and the death rate was cut in half in the period 1938-1958. To some degree the preventive incentives of workmen’s compensation may be credited with contributing to advances in industrial safety.

The human toll is still distressingly large—about fifteen thousand killed annually, some eighty thousand disabled for life, and about two million temporarily disabled each year. The problem remains grim for those directly affected, but they represent a declining proportion of the population. Moreover, increasingly, the injured and the survivors of those fatally injured have other recourse, particularly in the federal Old Age, Survivors, and Disability Insurance program, as well as the far less general provisions of private employee-benefit programs.

Despite the growth of overlapping jurisdictions among public programs and the increasing complexity of distinguishing between occupational and nonoccupational disability, most American authorities agree with the conclusion of England’s Beveridge Report (Great Britain 1942) that continuation of a separate program for the occupationally disabled worker is desirable. But just as England also accepted, in 1946, the necessity of the Bev-eridge Report’s corollary recommendation for a fundamental overhauling of the compensation system, United States experts are convinced that the state programs must be revised to do a far more effective job of rehabilitating the injured worker and restoring him to employment. Unless this can be done, the case for a separate system crumbles.

At the core of this challenge lies not just revised legislation, but a new approach to compensation administration, which in the United States has more nearly resembled arbitration procedure than supervisory responsibility. (Five states have no administrative agency and still rely on “court administration.”) Whether this can be achieved under so many completely independent jurisdictions without any form of central coordination or assistance at the federal level is a sore question. In any case, administrators need tools. Restorative programs will require far broader coverage of injuries; adequate benefit levels, particularly to correct the inequities falling upon the permanently injured and dependent survivors; authority to deal with quality of medical care; minimization of litigation and lump-sum settlements; and more modern methods for rating permanent disability.

Although the desirability of continuing a separate program for occupational injury is accepted, it is generally acknowledged that some form of reconciliation between overlapping social insurance benefits is required. The difficulties of finding a satisfactory formula in the face of the autonomous and widely varying state programs are formidable.

A reformed system need not be more costly. The net costs of effective medical care and rehabilitation are very low; in fact, they often represent net savings. Moreover, improved administration, particularly in reduction of excessive expense ratios in insurance, could bring economies more than sufficient to meet any increased costs of a balanced and comprehensive system of protection. Unfortunately, while the shortcomings of the present system have been a lively subject of discussion for many years, the prospects for effective action do not appear bright.

Herman M. Somers

BIBLIOGRAPHY GENERAL WORKS

Berkowitz, Monroe 1960 Workmen’s Compensation: The New Jersey Experience. New Brunswick, N.J.: Rutgers Univ. Press.

Cheit, Earl F.; and Gordon, Margaret S. (editors) 1963 Occupational Disability and Public Policy. New York: Wiley. → Contains discussion of experiences throughout the world.

Great Britain, Inter-Departmental Committee ON Social Insurance and Allied Services 1942 Social Insurance and Allied Services. Papers by Command, Cmd. 6404. London: H.M. Stationery Office; New York: Macmillan. → Known as the Beveridge Report.

Skolnik, Alfred M. 1962 New Benchmarks in Workmen’s Compensation. Social Security Bulletin 25, no. 6:3-18.

Somers, Herman M.; and Somers, Anne R. 1954 Workmen’s Compensation: Prevention, Insurance, and Rehabilitation of Occupational Disability. New York: Wiley.

U.S. Social Security Administration, Division of Program Research 1967 Social Security Programs Throughout the World, 1967. Washington: Government Printing Office.

SERIAL PUBLICATIONS

Chamber of Commerce of the United States of AmericaAnalysis of Workmen’s Compensation Laws.→ Published since 1950. Includes the Canadian provinces.

International Association of Industrial Accident Boards and CommissionsProceedings.→ Published since 1914 by the U.S. Bureau of Labor Standards. Provides general information on administration and policy issues.

International Labour Review.→ Published since 1921 by the International Labor Office, which has also published numerous special studies.

International Social Security AssociationBulletin. → Published since 1948. Reports regularly on new developments in many nations.

Social Security Bulletin.→ Published since 1938 by the Social Security Administration. Provides financial and benefit data annually, usually in the January issue.

U.S. Bureau of Labor StandardsState Workmen’s Compensation Laws.→ Published since 1943.

Workers' Compensation

Workers' compensation is a mandatory type of business insurance that provides employees who become injured or ill while on the job with medical coverage and income replacement. It also protects companies from being sued by employees for the workplace conditions that caused such an injury or illness.

Businesses are required by law in all fifty states to pay for the medical treatment and lost wages of employees who suffer job-related injuries or illnesses. In order to avoid crippling expenses in this regard, companies purchase workers' compensation insurance policies of one kind or another. Most states give businesses the choice of buying workers' compensation policies either directly from the state or from a private insurer. Each state determines its own system's payment schedules, employee eligibility requirements, and rehabilitation procedures. Although provisions of each state's laws differ greatly, the underlying principle is the same—that employers should assume the costs of injuries, illnesses, and deaths that occur on the job, without regard to fault, and partially replace wage income lost. While income replacement under workers' compensation is usually a percentage of the actual wage, it is counted as a transfer payment and thus is not subject to federal income tax for the employer or employee. Some state laws exempt certain categories of employees from coverage. Those most likely to be excluded are domestics, agricultural workers, and manual laborers.

Given the mandatory nature of workers' compensation coverage and the potential expense involved, the cost of workers' compensation insurance policies is a considerable concern for small business owners. In fact, workers' compensation premiums stand as most companies' second-largest operating expense, after payroll. These rates are based on the employer's total payroll, the classification of the employees, and the employer's accident record. The wages paid each employee are assigned a rate based on the occupational classification in which that employee works. For example, an employee who does office work will be assigned a rate that is lower than one who works re-roofing. The employer's cost of workers' compensation for the office worker will likely be in the range of 0.25 to 1.0 percent of wages earned while the employee who works on roofing projects will cost the company as much as 10 to 15 percent of that employee's gross wages.

Small business owners have less control over the cost of workers' compensation coverage than they do over health insurance costs. State legislatures set the level of benefits and employers pay the full cost, so medical cost-containment strategies like co-payments do not apply. Some insurers avoid handling workers' compensation policies for small businesses because they feel that smaller companies lack the funds to provide a safe working environment. In general, the rates depend upon the type of business, number of employees, and company safety record.

Penalties for failing to carry workers' comp insurance policies can be severe. In general, business owners who are neglectful in this manner can be held liable for the medical expenses incurred by the worker in their employ. Nonetheless, many businesses engage in what is known as "premium fraud," in which they either do not carry insurance as required or lower the costs of their policy premiums through fraudulent record keeping. Methods used to fraudulently reduce insurance premiums include underreporting of employee count or the wages they are paid, paying workers under the table in order to falsify the number of employees, misclassifying the kind of work engaged in by employees in order to reduce premiums through a misclassification of their occupation, etc. However, momentum is building to beef up penalties for these kinds of fraudulent actions, which injure insurers and honest employers alike. Honest employers end up with higher insurance premiums as a result of these sorts of fraud. Law-abiding employers may suffer as a result of fraud in another way as well. Construction companies, for example, may lose out on projects to bidders whose lower bids are made possible because they are absorbing lower overhead costs through intentional workers' compensation fraud.

TYPES OF COVERAGE AVAILABLE

There are three basic methods available for employers to obtain the required workers' compensation protection: state insurance funds, private insurance, and self-insurance through insurance pools. The latter option—which involves setting aside funds in anticipation of workers' compensation claims, rather than purchasing insurance—is seen as a cost-saving method for safety-oriented firms. In the states that permit it, many large employers now self-insure, and many small businesses form groups to insure themselves and decrease the risks.

Group self-insurance plans are worth consideration for small businesses with better-than-average workplace safety records. Such plans work best when the companies involved are in the same or similar industries, so that their level of risk is roughly equivalent. The companies can then join together to purchase stop-loss coverage to protect themselves against claims over a certain amount. Though self-insurance can be less expensive than private workers' compensation policies, small businesses should make sure that they have the financial resources to withstand potential losses.

MANAGING WORKERS' COMP CLAIMS AND COSTS

Small businesses can explore a variety of other measures to reduce their workers' compensation premiums as well. These include:

First and foremost, make the workplace as safe as possible. Companies can reduce premiums by minimizing the number of claims made by their workforce. This requires the implementation of safety programs in such areas as materials handling and ergonomics.

Select the right insurer. Business owners seeking workers' comp insurance policies should seek out insurers with proactive claims adjusting policies. In addition, Occupational Hazards contributor Shawn Adams counsels companies to give preference to insurers who assign specific adjusters for accounts. "[When] claims are … handled on a file basis … your account is handled by whatever adjuster happens to be assigned the file for your claim. An assigned adjuster is one who can take responsibility for your account, as opposed to having different adjusters handle different claims against your policy but not coordinating the claims in a comprehensive manner."

Pay attention to your own claims trends. Businesses should take steps to monitor all aspects of their work safety record and insurance coverage, and ensure that all subcontractors carry workers' comp coverage.

BIBLIOGRAPHY

Adams, Shawn. "Risk Management Methods to Reduce Your Workers' Compensation Rates." Occupational Hazards. March 2001.

Priz, Edward J. Ultimate Guide to Workers' Compensation Insurance. Entrepreneur Press, 2005.

Washington, Corey. "Insurance Bite Still Painful for Employers." Business Press (San Bernardino, CA). 10 April 2006.

                                Hillstrom, Northern Lights

                                  updated by Magee, ECDI

WORKERS' COMPENSATION

A system whereby an employer must pay, or provide insurance to pay, the lost wages and medical expenses of an employee who is injured on the job.

Workers' compensation law is governed by statutes in every state. Specific laws vary with each jurisdiction, but key features are consistent. An employee is automatically entitled to receive certain benefits when she suffers an occupational disease or accidental personal injury arising out of and in the course of employment. Such benefits may include cash or wage-loss benefits, medical and career rehabilitation benefits, and in the case of accidental death of an employee, benefits to dependents. The negligence and fault of either the employer or the employee usually are immaterial. Independent contractors are not entitled to workers' compensation benefits, and in some states domestic workers and agricultural workers are excluded or only partially covered.

It is the goal of workers' compensation to return the injured employee quickly and economically to the status of productive worker without unduly harming the employer's business. A worker whose injury is covered by the workers' compensation statute loses the common-law right to sue the employer for that injury, but injured workers may still sue third parties whose negligence contributed to the work injury. For example, a truck driver injured in a rear-end collision by an unemployed third party would be entitled to collect workers' compensation and also to sue the third party for negligence. In such cases a plaintiff who recovers money from a third-party lawsuit must first repay the employer or insurer that paid workers' compensation benefits. The plaintiff may keep any remaining money. Many jurisdictions permit the employer or its insurer to sue negligent third parties on the employee's behalf to recover funds paid as workers' compensation benefits.

In most states parties to workers' compensation disputes resolve them in an administrative, rather than judicial, tribunal. Courts usually relax the standard rules of procedure, evidence, and conflict of laws to allow for expediency and simplicity in keeping with the goal of getting an injured worker the benefits necessary to return to work.

Workers' compensation statutes require most employers to purchase private or state-funded insurance, or to self-insure, to make certain that injured workers receive proper benefits. The cost of insurance is reflected in the cost of goods or services produced by the employer; thus the cost of workers' compensation liability is passed ultimately to consumers.

Workers' compensation law is somewhat unique in that negligent acts of either the employer or the injured employee generally are irrelevant to the determination of compensability. Victims of injuries not related to work in most cases must prove the negligence of another party before recovering money in a lawsuit. Conversely, a defendant in a personal injury lawsuit may avoid or mitigate liability to a plaintiff whose own negligence caused or contributed to the personal injury. Yet workers' compensation is a no-fault law, and an employee's negligence or an employer's lack of negligence is usually not a factor.

The underlying social philosophy of this no-fault system is evident when one considers what would happen without workers' compensation. For example, assume a responsible employer encourages a safe workplace and implements a rule requiring workers to obtain the assistance of a coworker before climbing a tall ladder to a storage area. One employee, hurrying to get her work done for the day, ignores this rule and climbs the ladder without assistance. When she reaches the top of the ladder, it shifts and she falls, injuring her spine and paralyzing her legs.

Society could choose to treat this injured worker in one of three basic ways. It could refuse to render any aid, instead forcing the injured worker to seek help from friends or family. If the worker was without ties to persons both willing and able to assist, this plan would leave her destitute. A second option would be to give her government aid, or welfare, such as medicaid or food stamps. This alternative would be less speculative but still not ideal because it would force local taxpayers to pay for the worker's benefits regardless of whether they had any connection to the injury.

The third solution is the workers' compensation system. This system preserves the injured worker's dignity and well-being by providing an income and medical care and keeping her off welfare. The system passes the cost of compensating injured workers to consumers of products that, through their manufacture, cause the workers to get injured. Thus the social philosophy underlying workers' compensation is the efficient and dignified provision of financial and medical benefits to those injured on the job and the allocation of the expense to an appropriate source: the consumer.

Workers' compensation is also distinguishable from other personal injury laws where negligence is a factor because although the employer is liable for paying injured workers' benefits, the purpose of workers' compensation is not to punish or hurt the employer. For this reason, an integral component of workers' compensation is the requirement that employers purchase workers' compensation insurance, or provide a self-insured fund, to pay the benefits. This way, the employer can pass along the cost of insurance to the purchasers of the employer's product.

History

Workers' compensation laws in the United States developed during the early 1900s as a result of the industrial age and growing numbers of industrial injuries. Before these laws were developed, workers injured on the job often found themselves without remedy against their employer or their fellow workers.

The law of vicarious liability developed in England in approximately 1700 to make the master, or employer, liable for the acts of the servant, or employee. In 1837, however, the English case Priestly v. Fowler, 3 M. & W. 1, 150 Reprint 1030, created the fellow servant exception to the general rule of a master's vicarious liability; no longer would the master be held liable for an employee's negligence in causing injury to a coworker.

After Priestly, courts in the 1800s continued to develop employer defenses to liability for injured workers. One such defense, assumption of the risk, allowed employers to escape liability with the questionable logic that employees could avoid or decline dangerous work duties. Another defense, contributory negligence, allowed employers to escape liability, notwithstanding the employer's negligence, where the employee was also negligent. Therefore, during a century of burgeoning industry and its inherent risk of work-related accidents, workers faced nonexistent or inadequate remedies for their injuries.

At the end of the nineteenth century, state lawmakers recognized the problem and began studying the compensation system developed in Germany in 1884. Rooted largely in its socialistic tradition, Germany's compensation system mandated that employers and employees share in the cost of paying benefits to workers disabled by sickness, accident, or old age. Britain followed suit in 1897 with the British Compensation Act, which later became the model for many state workers' compensation laws in the United States.

In 1910, representatives of various state commissions met at a conference in Chicago and drafted the Uniform Workmen's Compensation Law. Although not overwhelmingly adopted, this uniform law became the blueprint for state workers' compensation statutes. All but eight states had adopted a workers' compensation law by 1920, and, in 1963, Hawaii became the last state to do so.

Accident and Injury

Workers' compensation benefits are most commonly provided to workers who are injured by a specific accident on the job, such as the worker who trips and falls down the employer's staircase, or the worker who gets a hand caught in factory machinery. But a compensable accidental injury might also include an occupational disease, such as lung disease that resulted from an employee's exposure to asbestos in the workplace. Cumulative trauma associated with work duties, such as carpal tunnel syndrome caused by repetitive keyboard work, also can be compensable.

Jurisdictions differ as to whether work-related mental illness is compensable. In the majority of states, mental illness caused by work, such as stress, anxiety, or depression, is not compensable. A common exception to this rule exists when a specific accident or injury at work leads to mental illness. For example, an employee who suffers from panic attacks upon hearing the phone ring at work generally will not be entitled to workers' compensation benefits. But an employee who witnesses a vicious assault and battery at work, and who then develops anxiety and panic attacks as a result, would be entitled to compensation in most jurisdictions.

Requirements for Benefits

An injured worker is entitled to workers' compensation benefits only if the injury arose out of and in the course of employment. The first part of this requirement, "arising out of employment," ensures that there is a causal connection between the work and the injury. Usually the employee has the burden of proving that the injury was caused by exposure to an increased risk from employment.

In determining whether an injury is compensable, it is helpful to categorize the risk causing the injury in one of three ways. First, there is the risk that is associated distinctly with the employment. An example would be a house painter injured in a fall from a scaffold; the house painter would not have been on the scaffold but for his employment. This type of injury is always compensable as arising out of employment.

The second category of risk is risk that is personal to the claimant. An example is a worker who develops lung cancer due to years of smoking. Assuming this cancer was not caused by carcinogens in the workplace and would have developed notwithstanding employment, the disease would be considered personal and not arising out of employment. Injuries from purely personal risks are never compensable.

The third category of risk, neutral risk, is the most problematic in determining the compensability of a work injury. Neutral risks are neither distinct to the employment nor distinctly personal. Examples would include a teacher shot in a drive-by shooting while standing in his classroom; an auto mechanic bitten by a stray dog while dumping oil into an outdoor receptacle; and an executive struck by lightning when walking to his car after a meeting.

Whether an injury resulting from a neutral risk is compensable is difficult to predict and often depends on the jurisdiction of the tribunal, the nature of the injury, and the precise facts surrounding the accident. For example, injuries caused by lightning are usually compensable if the claimant can show that the work conditions increased the risk of being struck. An employee struck while working atop a metal electric pole likely would receive workers' compensation benefits for a lightning injury or death, whereas an employee struck while walking to her car after her work shift would have a more difficult time collecting benefits. In Reich v. A. Reich & Sons Gardens, Inc., 485 S.W. 2d 133 (Mo. Ct. App. 1972), the employee was killed by lightning while standing next to several vehicles in a wheat field. The court deemed the death compensable, citing testimony that the employee's risk of being hit by lightning was greater than that of other people in the vicinity, who were sheltered in cars and buildings and were not standing in an open field.

Using the same logic, injuries from sun-stroke, freezing, and other effects of heat and cold exposure arise out of the course of employment if the employee can show that such exposure was greater than that to which the general public was exposed. Workers who contract contagious diseases at work will receive benefits upon a showing that the workplace offered an increased risk of exposure.

Another type of neutral-risk injury is an assault. Most courts will deem an assault as arising out of the course of employment if the nature or setting of the work increased the risk of assault or if a quarrel that led to the assault originated at work. In Bryan v. Best Western/Coachman's Inn, 885 S.W.2d 28 (Ark. 1994), the claimant worked as a security guard at a motel. The claimant and the motel night clerk were involved in a personal dispute, which led to a fight between the claimant and the night clerk's boyfriend, injuring the claimant. The court held that even though the dispute was personal and not related to work, the claimant, because of his job, faced an increased risk of assault. His injuries therefore were compensable.

Even idiopathic injuries, or injuries resulting from risks personal to the employee as opposed to risks associated with the job, may be compensable if the job contributes to the risk or aggravates the injury. An employee who misses breakfast and suffers a fainting spell ordinarily will not be entitled to workers' compensation, because the fainting spell does not arise out of employment. But if the same worker faints and in so doing hits her head on her desk and fractures her skull, her injury will be compensable. In Silverman v. Roth, 9 A.D. 2d 591, 189 N.Y.S.2d 311 (1959), the employee died of heart failure after suffering a heart attack and falling from a ladder. The precise sequence of events was impossible to determine. Nevertheless, the court awarded benefits, citing evidence that even if the heart attack occurred before the fall from the ladder, the heart condition would have been aggravated by the shock of the fall, and thus the fall from the ladder was a contributing factor in the employee's death.

In addition to the requirement that an injury arise out of employment, the employee seeking workers' compensation also must show that the injury arose "in the course of employment." To arise in the course of employment, the injury must take place within the employment period, in a location where it is reasonable for the employee to be, and while the employee is fulfilling work duties. This does not mean that the employee must actually be doing his job, or doing it within the precise work hours, when the injury occurs for it to be compensable. Distinguishing between injuries that do or do not arise out of the course of employment is often a difficult and confusing task.

One common issue arises when an employee is injured going to or from work. Clearly, employment necessitates that an employee travel to work and home again. Yet it is not the purpose of workers' compensation to protect the employee from the risk of travel. Courts have, through the years, reached a compromise: an employee with fixed hours and work locale going to or coming from work generally is covered by workers' compensation if the injury occurs on the employer's premises.

This rule can lead to rather harsh results, as in Heim v. Longview Fibre Co., 41 Wash. App. 745, 707 P.2d 689 (1985). There, the claimant was driving his motorcycle through the usual exit from his employer's premises when a coworker turning into the premises hit the claimant, killing him. The precise location of the crash was fewer than five feet from the employer's property, on a public access road to the plant used by company personnel. Nevertheless, the court held that the injury did not arise in the course of employment and denied death benefits. Employees injured off work premises may still recover damages in tort against any persons whose negligence caused them harm.

Some courts, recognizing the harshness of the premises rule, have attempted to extend the premises rule to include injuries that occur within a reasonable distance of the employer's premises. And most courts recognize the compensability of an injury that occurs off the employer's premises when an employee is going to or coming from work, where the trip itself is a substantial part of the employee's service to the employer. In Urban v. Industrial Commission, 34 Ill. 2d 159, 214 N.E.2d 737 (Ill. App. Ct. 1966), the employee, a traveling salesperson, was killed in a car accident while driving in the direction of his home, although the evidence was not clear that he was actually returning home. The court ruled the death to be compensable.

Benefits

Workers' compensation provides two general categories of benefits to injured workers: indemnity benefits and medical benefits. Indemnity benefits compensate for the worker's loss of income or earning capacity resulting from the work-related injury. Depending on the employee's medical status and ability to work following the injury, she may be entitled to different types of indemnity benefits. A worker whose injury is only temporary and does not preclude her ability to work her normal job duties and hours typically will not receive indemnity benefits because her injury has no effect on her ability to earn a living. A worker whose injury temporarily causes him to miss time from work will be entitled to payment of all or a portion of his lost wages, known as temporary partial disability benefits. A worker whose injury temporarily renders him unable to work at all may receive temporary total disability, which is usually a portion of the worker's average wage. A worker who is able to work at least part time but who has a work-related permanent disability may be entitled to permanent partial disability benefits. The formula for permanent partial disability benefits varies from jurisdiction to jurisdiction but usually considers the employee's average weekly wage combined with the degree of permanent disability. Finally, a worker who is permanently disabled from working at all may be entitled to permanent total disability benefits.

A frequently disputed issue between an employer and an injured employee is the degree that the employee's injury restricts her from returning to suitable employment, mitigating the need for indemnity benefits. Some state statutes permit or require the employer to provide an injured employee with vocational rehabilitation, job search assistance, or job retraining if the injury would otherwise prevent the employee from returning to gainful work.

In the case of a compensable work-related death, the decedent's spouse, dependent children, or both spouse and children may be entitled to dependency benefits. Most jurisdictions pay death benefits to a spouse until the spouse dies or remarries, and to children until they reach age 18. Other jurisdictions place limits on benefit amount or duration.

Employees injured on the job also may receive reasonable and necessary medical benefits that are related to the work injury. Such benefits are compensable if they serve to cure the injury, or, if the injury is incurable, relieve its effects. These benefits may include medical treatments such as sutures, casts, or surgery; psychiatric or psychological treatments; hospital, nursing, and physical therapy treatments; chiropractic or podiatric treatments; prescription medications; supplies such as wheelchairs or wrist braces; orthopedic mattresses; or attendant care services. Most workers' compensation statutes also provide for the reimbursement of the employee's travel expenses incurred in obtaining medical services.

The System Today

Workers' compensation has been criticized as an expensive component of doing business and a system made more expensive by undetected fraud. What was intended to provide the employer and the injured worker with an amicable and humane resolution of a work injury often results in contentious disputes and costly litigation. Some employees feign injury to receive wage-loss benefits, and some employers balk at providing benefits to legitimately injured workers for fear that insurance premiums will rise. But the system has been effective in keeping injured employees employed and promoting the importance of a safe workplace.

further readings

Agnelli, Joseph F. 2003. Workers' Compensation Law Conference: A Comprehensive Update on the Latest Practice Issues. Boston: MCLE.

Burnett, John T. 2003. "Spoliation of Evidence Claims in the Context of Workplace Injuries: How to Prevent an Old Dog from Learning New Tricks." Trial Advocate Quarterly 22 (spring).

Douglas, Michael L., and Tahlia Day, ed. 2002. Workers' Compensation 101. Waterford, Penn.: Douglas.

Hauser, Allison Hunnicutt, and Sarah M. Baggett. 2002. "Workers' Compensation: The Statutory Framework for Defending a Claim." Trial Advocate Quarterly 21 (fall).

Larson, Lex K., and Arthur Larson. 1996. The Law of Workmen's Compensation. New York: Bender.

Reville, Robert T., Leslie Boden, and Jeff Biddle. 2003. Comparing Compensation Adequacy: Workers' Compensation Permanent Disability Benefits in Five States. Santa Monica, Calif.: Rand.

The Workers Compensation and Employers Liability Policy. 2003. Chicago: Dearborn Financial Services.

cross-references

Employment Law; Labor Law; Master and Servant.

Workers' Compensation

Sections within this essay:

Background

Workers' compensation is a system that requires employers, typically through their insurance companies, to pay lost wages, medical expenses, and certain other benefits to employees who are injured on the job. Because employers pass on the costs of workers' compensation benefits or insurance premiums in the pricing of their products, consumers ultimately fund the workers' compensation system.

Workers' compensation is different from other types of torts in that it is not based on fault or negligence. A worker who is injured due to her own negligence or that of her employer typically is entitled to the same workers' compensation benefits as a worker whose injury did not result from negligence at all. The idea behind workers' compensation is not to right a wrong or punish negligence; rather, it is away to protect employers from negligence lawsuits and injured workers from destitution. The goal is to return injured employees to work efficiently and economically without damaging the employer's business.

Workers' compensation is legislated by every state, and the laws vary among jurisdictions but carry many of the same features. An employee who sustains an occupational disease or personal injury arising out of and in the course of employment is entitled automatically to certain benefits. These benefits may include lost wages, payment of medical treatment, provision of vocational rehabilitation or job placement assistance, and in the case of an employee's work-related death, benefits to the employee's dependents. Some workers, such as independent contractors, are excluded from workers' compensation protection.

History

Workers' compensation came about in the United States in the early 1900s, a product of the industrial age and a result of increasing numbers of job-related injuries and deaths. Until the development of workers' compensation laws, workers had little or no recourse against their employers for injuries sustained on the job. When job injuries led to the inability to work and the inability to pay for medical care, these workers frequently were left destitute.

The system of workers' compensation grew from the law of vicarious liability, an English law developed in approximately 1700. The law of vicarious liability made a master or employer liable for the negligent acts of a servant or employee. An 1837 English case, Priestly v. Fowler, modified the law of vicarious liability with the fellow servant exception, which relieved a master or employer of liability for a negligent employee who caused injury to a co-employee. Following the example set in Priestly, U. S. courts continued to modify the law of vicarious liability and provide the employer with greater protections against liability resulting from negligence. The doctrine of assumption of the risk presumed, often incorrectly, that employees could refuse dangerous job assignments, thereby relieving the employer of liability when those job assignments caused injury or death. Employers could also rely on the defense of contributory negligence, which completely absolved them of liability when the employer's negligence along with the employee's negligence caused his injury.

Workers were left with inadequate remedies against their employers for injuries resulting from work. At the same time, the industrial age was spawning an increase in work injuries. States began to recognize a problem by the end of the nineteenth century and looked to the compensation systems of other countries for guidance. In 1884, Germany, with its socialist traditions, had developed a compensation system whereby employers and employees shared the cost of subsidizing workers disabled by injury, illness, or old age. Next was England, which in1897 developed a similar system called the British Compensation Act. Finally, in 1910, representatives from various states met in Chicago and drafted the Uniform Workmen's Compensation Law. This uniform law was not widely adopted, but states used it as a model to draft their own workers' compensation statutes. Most states had such laws in place by 1920, and when Hawaii passed its statute in 1963, all fifty states had workers' compensation laws.

Rationale

Workers' compensation is a no-fault law, meaning that it is irrelevant whether the employer was not negligent or whether the employee was negligent. No-fault law differs from most types of personal injury lawsuits, which require the injured party to prove the negligence of another party before recovering money and which allow a defendant who was not negligent to escape liability.

The rationale behind a no-fault workers' compensation system can be illustrated by imagining what would happen without it. Assume, for example, that an employer owned a loading dock and instructed its employees how to safely lift heavy merchandise on the dock, requiring them to use a forklift to lift any carton weighing more than 100 pounds. A worker, hurrying to complete his shift, negligently ignored the forklift requirement and attempted to lift a carton weighing 110 pounds and badly injured his back as a result. He had to undergo surgery and became disabled from working at all for six months.

Without workers' compensation, society would have essentially two different options in dealing with this injured worker. It could decline any assistance and force the worker to fund his own medical care and unemployment, which could be impossible and could leave him destitute. Or, it could provide government assistance such as Medicaid, welfare, or food stamps. This option would guarantee the injured worker's survival, but at the expense of local taxpayers regardless of any ties to the employer or injury.

With workers' compensation, the injured worker receives an income and payment for medical care from a private source rather than at government, or taxpayer, expense. It is not the goal of workers' compensation to punish or hurt the employer, and that is why state laws require employers either to establish a self-insured fund or to buy workers' compensation insurance. Employers fund the costs of the system but pass those costs along to the consumers of the products or services that cause or contribute to the worker's injury. The goals of the workers' compensation system are therefore accomplished: the worker retains his dignity, receives appropriate financial and medical benefits, and the consumer becomes the ultimate source of payment.

Third Party Negligence

In exchange for workers' compensation protection, an injured worker loses the right to sue the employer under the common law for negligence. An injured worker retains the right, however, to sue a third party whose negligence caused or contributed to the worker's injury, even if the worker receives workers' compensation. A common example of this involves a sales employee whose job duties include driving to customers throughout a certain territory. If that employee, while making a sales call, is injured by a negligent motorist who runs a red light, the employee is covered by workers' compensation but can additionally sue the motorist under a common law tort theory. If the worker recovers money from the negligent third party motorist, the worker must repay the employer or insurer who paid workers' compensation benefits and keep only what is left. In some jurisdictions, the employer or insurer paying workers' compensation benefits may sue a negligent third party on behalf of an injured worker with the hopes of recovering part or all of those benefits from the third party. This is known as subrogation.

Procedure

Workers' compensation disputes in most states are resolved in an administrative court rather than a judicial court. This is in keeping with the goal of returning the injured worker to productive employment quickly and efficiently. Workers' compensation courts often follow their own rules of procedure and evidence, and the administrative system typically is more relaxed and speedy than the judicial system. As with judicial courts, parties can represent themselves but frequently hire attorneys for representation.

Workers' compensation laws require employers to either be self-insured, meaning they must have enough verifiable financial resources to be able to pay workers' compensation benefits directly to their injured employees, or to purchase private workers' compensation insurance. Many major insurance companies in the United States offer workers' compensation policies in various states. Other insurance companies are smaller and may provide coverage in only one or a few states. Some states choose to fund their own insurance companies, either as the state's exclusive provider or in competition with other private insurers.

Compensable Injuries

Various types of injuries are covered by workers' compensation. Perhaps the most typical type of injury involves a specific trauma or event; for example, a painter who falls off a scaffold or a car mechanic who injures his back after lifting an engine. Another type of injury is a cumulative trauma injury, an injury caused by repetitious work over time. An example of cumulative trauma injury is carpal tunnel syndrome caused by using a computer keyboard. A third type of compensable injury is occupational disease, and an example of that would be lung disease caused by exposure to asbestos at work.

Mental illness caused by work is compensable in some, but not all, jurisdictions. Mental illness such as stress, anxiety, or depression, even when caused by work, is not compensable in most states. However, mental illness that accompanies a work-related physical injury is compensable in most states. For instance, a nurse who develops depression related to his work in an emergency room typically would not be entitled to workers' compensation, but a nurse who is attacked and physically injured by a patient and as a result develops anxiety could receive workers' compensation benefits for the physical as well as the mental injury in most states.

Injuries are deemed to be work-related and compensable under workers' compensation if they arise out of and in the course of employment. The requirement that the injury arises out of employment ensures a causal relationship between the injury and the job, and it is usually the employee's burden to prove that an increased risk of the job caused a compensable injury.

There are three general categories of risks that determine whether an injury is compensable. The first type of risk is one that is associated directly with the employment, such as a when a roofer falls off a roof. An injury like this clearly arises out of employment and is always compensable.

The second category of risk involves personal risk. An example of personal risk is an employee with high blood pressure who suffers a stroke while on the job. Assuming nothing on the job caused the stroke, or assuming the stroke would have occurred notwithstanding the employment, the stroke would be considered personal rather than arising out of employment. Purely personal risks are not compensable.

It is more difficult to determine compensability with the third category of risk called neutral risk. Neutral risks are those that are neither distinctly personal nor distinct to the employment. Examples of neutral risks include a worker who has an allergic reaction to a bee sting sustained while on the job, or an employee who is struck by lightening while on the job. Whether neutral risks are compensable depends on the jurisdiction and the fact surrounding the injury and the job duties. In general, an employee trying to collect workers' compensation must demonstrate that the job increased the risk of the injury and that the risk was greater than that to which the general public was exposed. The risk of being injured by lightning, for example, is greater for an employee working on the top of a metal communication tower than it is for the general public. Therefore, a lightning strike would be a compensable injury for that employee. Assault is another neutral risk injury. If a worker is assaulted on the job and injured, courts generally look at whether the nature of the job increased the risk of assault, such as the case of a prison guard. If an argument led to a workplace assault, the court would determine whether the argument was work-related or personal. Other common forms of neutral risk injuries include sunstroke, frostbite, heart attacks, and contagious diseases.

To be compensable, the injury must not only arise out of, but also in the course of, employment. This means that the injury must occur at the place of employment, while the employee is performing the job and within the period of employment. Employees who are injured while traveling to or from their jobs typically are not covered by workers' compensation, although there are exceptions to that rule.

Types of Benefits

There are two general categories of workers' compensation benefits, medical and indemnity. Medical treatment that is medically reasonable and necessary and serves to cure or relieve the effects of the injury is compensable. Disputes may arise over the kind of treatment the injured worker receives, and courts and legislators try to strike a balance between the patient's right to select medical care and the employer's right to curb excessive or unnecessary treatment.

Indemnity benefits are those that attempt to compensate the injured employee for lost earnings or earning capacity caused by the work injury. Some injured workers never lose time from work and may be entitled only to medical benefits. Other injured workers are out of work temporarily and receive temporary total disability payments, usually two-thirds of the worker's average wage. Injured workers who are able to return to a job only part time or at a reduced wage receive temporary partial disability payments, which supplement the worker's reduced paychecks. Workers who sustain injuries that cause permanent disability are entitled to permanent partial disability payments if they are able to return to work. The calculation of permanent partial disability payment varies among states but usually depends on a disability rating given by a doctor. If a worker is permanently precluded by a work injury from ever working again, that worker is deemed permanently and totally disabled and may receive workers' compensation benefits until retirement or death. When a work injury causes death, most states require the payment of dependency benefits to the employee's spouse, children, or both.

The workers' compensation system is criticized at times for being outdated in a post-industrial age world. Workers' compensation premiums and expenses drive up the cost of products, and the system is made more expensive by fraud and litigation. Disputes often arise between employers and employees regarding the legitimacy of workers' compensation claims. Yet proponents of the system say it is effective in returning injured workers to work and that it promotes safe workplaces.

State Workers' Compensation Laws

ALABAMA: For temporary or permanent total disability, an injured worker receives 66 2/3 percent of the wage with a minimum and maximum wages established by law. The employer selects the employee's physician.

ARIZONA: Disability rate is 66 2/3 percent of the wage with no minimum weekly payments but maximum payments established by law. The employee selects the physician.

CALIFORNIA: A state agency oversees the selection of the physician.

DISTRICT OF COLUMBIA: The employee selects the physician from a list created by the District of Columbia.

FLORIDA: After employee reaches maximum medical improvement, a $10 co-payment is required to be paid by the employee for all medical services.

GEORGIA: Maximum period of temporary total disability payments is 400 weeks.

ILLINOIS: No limit on duration of temporary total disability payments.

IOWA: Disability rate for temporary or permanent total disability is 80 percent of "spendable earnings."

KANSAS: Temporary total disability capped at $100,000. Permanent total disability capped at $125,000. Workers' compensation benefits subject to offset for unemployment and social security benefits.

MASSACHUSETTS: Disability rate is 60 percent of wage.

MISSISSIPPI: Maximum period of temporary disability is 450 weeks. Cap on temporary total disability is $131,787. Cap on permanent total disability is $136,507.

NEVADA: Injured worker can waive the right to workers' compensation.

NEW YORK: Disability rate is 66 2/3 percent of wage. Employee selects physician from state's list of workers' compensation physicians.

OREGON: Duration of temporary disability payments is duration of disability.

TEXAS: Employers are not required to purchase workers' compensation insurance.

WEST VIRGINIA: State funded insurer is the exclusive workers' compensation insurer in West Virginia.

Additional Resources

West's Encyclopedia of American Law. West Group, 1998.

Organizations

U. S. Department of Labor

200 Constitution Avenue NW
Washington, DC 20210 USA
Phone: (866) 487-2365
URL: www.dol.gov

WORKERS' COMPENSATION

Workers' compensation is a form of insurance that provides medical coverage and/or income replacement for employees who sustain injuries or suffer other disabilities because of workplace conditions or accidents. The cost for workers' compensation is the responsibility of the employer and is regulated by the state and/or country in question. The major purpose of workers' compensation is to assist injured workers and their dependents. Certain workers' compensation laws limit the amount an injured employee can receive in benefits.

Historically, the earliest workers' compensation law was passed in Germany in 1884, with Great Britain following in 1897, and the United States in 1908. Most industrialized countries provide compulsory workers' compensation. In the United States, all fifty states have passed workers' compensation laws and are further regulated in certain aspects from the federal government. The benefits provided are dictated by law.

Workers' compensation was initially intended to provide protection from hazardous types of industrial work. In the early twenty-first century most places of employment that have large numbers of employees, such as schools and factories, also provide workers' compensation benefits. Some situations in agriculture-related employment, as well as small businesses, do not provide workers' compensation.

Although workers' compensation was originally designed as protection from accidental injuries, as time passed, additional types of job-related conditions were added. For example, if a worker acquired a disease as a direct result of the job, the worker would be covered by workers' compensation. Workers' compensation laws today generally cover accidents occurring while working on the job.

State workers' compensation laws provide the framework when the job is a state-related position. At the federal level, the Federal Employment Compensation Act (FECA) provides workers' compensation for nonmilitary and federal employees. The FECA also, in most cases, provides compensation for accidents or other disabilities sustained while employees are performing their duties, as long as the accidents are not willful or caused by intoxication. Medical expenses for disability are also covered. Occasionally, employees may be retrained for another type of job. Disabled employees receive a portion of their monthly salary while they are disabled and may receive more if the injury is permanent or if there are additional dependents. The act also provides compensation to survivors of employees. The FECA is administered by the Office of Workers' Compensation Programs.

Several areas related to workers' compensation are covered by a variety of laws. The Federal Employment Liability Act provides for injuries incurred by interstate railroad employees if the interstate railroad has been negligent. Another is the Merchant Marine Act (also known as the Jones Act), which provides protection against injury for those working in positions on the seas. Certain specified employees who work for private maritime employers are covered against injury by the Longshore and Harbor Workers' Compensation Act. Miners are protected by the Black Lung Benefits Act for this disease, which is supervised by the secretary of the U.S. Department of Labor.

While most injuries are legitimate, it is important to note that workers' compensation claims are scrutinized carefully before awarding benefits. Detailed documentation is an essential requirement before making a judgment in settling a workers' compensation claim.

bibliography

Hood, Jack B., Hardy, Benjamin A., Jr., and Lewis, Harold S., Jr. (2005). Workers' compensation and employee protection laws in a nutshell (4th ed.). St. Paul, MN: Thomson/West.

McCoy, Doug (2002). Workers' compensation: The survival guide for business. Newark, NJ: LexisNexis.

Popow, Donna J. (2004). Principles of workers' compensation claims (3rd ed.). Malvern, PA: American Institute for Chartered Property Casualty Underwriters/Insurance Institute of America.

Priz, Edward J. (2005). Ultimate guide to workers' compensation insurance. Irvine, CA: Entrepreneur Press.

Workers' compensation: An overview. Retrieved December 13, 2005, from http://www.law.cornell.edu/wex/index.php/Workers_compensation

Dorothy A. Maxwell