As ‘Grand Bargain’ of Workers’ Compensation Breaks Down, Injured Employees Suffer
Starting with the enactment of federal laws in 1908 and continuing through the middle of the 20th century, U.S. workers steadily gained rights to seek compensation for injuries and illnesses they sustained on the job. The state-by-state workers’ compensation programs that emerged are often characterized by economic and labor historians as “grand bargains” that balanced the rights and interests of employers and employees.
Companies welcomed this trend at first, even pushing state legislators to pass workers’ compensation statutes on the premise that purchasing a form of insurance provided more financial stability than going to court to contest personal injury and wrongful death lawsuits. Even though companies won a majority of those cases, when judges or juries did find for the plaintiffs, the awards were often large.
Workers, understandably, supported laws that mandated coverage of job-related injuries and illnesses regardless of exact causes. Previously, defenses companies could use to deny liability included:
- Contributory negligence, showing that the hurt employee had acted irresponsibly or in violation of safety rules;
- Willing assumption of risk, showing that the person agreed to perform a dangerous task, perhaps in return for higher pay; and
- “Fellow-servant defense,” showing that the company took all the proper actions to safeguard the employee but negligence or recklessness by a co-worker caused the harm.
Under the worker’s comps statutes, all a person needed to do to qualify for workers’ comp payments was prove that an injury or illness occurred in the course of work-related activities. Such activities could range from falling on the factory floor to getting hit while driving a work vehicle to breathing in toxic fumes while doing a job.
New York adopted the first statewide workers’ compensation law in 1910; Mississippi became the last to do so in 1948. Concerns over whether employers were unconstitutionally denied their due process rights to contest unwarranted claims by hurt or sick workers were resolved by the U.S. Supreme Court in New York Central Railway Co. v. White (1917). Essentially, the justices ruled that the public’s interest in ensuring people did not suffer unduly from doing hazardous jobs permitted a state agency to require employers to set up an insurance fund.
An Accelerating Erosion
Beginning in the 1950s and continuing through today, state lawmakers and corporations have chipped away at worker’s protections under workers’ comp. Two excellent, if depressing, histories of this purposeful erosion appeared on ProPublica and Slate in the fall of 2015.
In reporting on a lengthy investigation ProPublica’s Michael Grabell and NPR’s Howard Berkes wrote that “since 2003, legislators in 33 states have passed workers’ comp laws that reduce benefits or make it more difficult for those with certain injuries and diseases to qualify for them.”
Those actions capped a trend decried as early as 1972 by a U.S. Department of Labor commission that looked into the operations of state workers’ comp programs as the federal Occupational Safety and Health Administration was being organized. That commission issued 19 recommendations for best practices for workers’ compensation, including: “Nearly every employee should be covered. Workers should be able to pick their own doctors. If employees couldn’t work, they should get two-thirds of their wages up to at least the state’s average wage. Compensation should last as long as the person is disabled, with no arbitrary caps. Spouses should receive death benefits until they remarry, children until they graduate college.”
The Labor Department stopped tracking states’ compliance with these recommendations in 2004. Partly as a result of no one watching, according to Grabell and Berkes, “only seven states now follow at least 15 of the recommendations made during the Nixon administration. Four states comply with less than half of them.”
A growing number of states are also moving to increase the number and types of employers that can opt out of paying workers’ comp premiums to the government, allowing those organization to operate as “self-insured” entities. What this translates to is letting companies contest work-related injury and illness claims without being subject to government oversight or court review.
Qualifying Claims More Difficult Than Ever
Taking more of a case-study approach and focusing primarily on occupational disease claims, Slate’s Jamie Smith Hopkins described a network of programs that “rarely works at all.” A symptom of this is that workers’ comp administrators cite fears of fraud not borne out by rigorous analyses in order to deny a significant proportion of applications for benefits almost out of hand. “In Ohio,” Smith Hopkins pointed out, “disease claims were denied nearly half the time in 2014, compared with just 14 percent of injury claims.”
Workers and their families also often run afoul of statutes of limitations that require making claims within two years of a workplace accident or job-related chemical exposure. Since diseases like cancer can take decades to develop, workers’ comp is rarely available to individuals who have retired or those who slowly became too disabled to remain employed.
Adding to these barriers are the extremely strict criteria used to rule on the admissibility and accuracy of medical evidence submitted in support of workers’ compensation claims. Regardless of the amount or quality of an applicant’s records and reports, the workers’ comp program in Ohio and every other state requires physical examinations and assessments by health professionals of their own choosing.
Workers’ Comp Remains Worth Fighting For
Despite the growing difficulties of receiving workers’ compensation, many people have no other option. Social Security Disability Insurance, Medicaid, and Medicare cannot substitute for the program put in place specifically to assist those who get injured or become sick on the job. And without the benefits that they should qualify for, individuals unable to work can end up homeless and without health care.
Federal lawmakers and state agencies must act to maintain the grand bargain of workers’ compensation. Regulatory neglect and pro-business legislation at the state level cannot combine to leave hurt and sick U.S. workers less protected than they were in the early 1900s.