History and Origins

The need for and idea of workers' compensation has origins in Germany in the early 1800s. The industrial revolution brought dangerous new workplaces into existence such as railroads, factories and mines with accompanying increases in injuries, deaths and new work-related diseases. Social and political sympathy for the common worker grew and led to the enactment of early workers' compensation legislation.

The concept soon spread to other European nations, ultimately resulting in an 1897 British law that was the impetus for the first US workers' compensation laws. Almost all US states had some type of workers' compensation system by about 1920. The federal government followed suit for most federal employees and for certain industries.

Prior to the establishment of workers' compensation, English and American laws were inadequate to protect workers harmed in increasingly hazardous industrial jobs. Ordinary employees rarely had the means to bring negligence lawsuits against their employers; when they did, employers had a "trinity" of defenses, sometimes called the unholy trinity, to defeat the claims. An employer usually defended such a suit by asserting that a co-employee was instead responsible, that the injured worker had contributed negligently to the accident or that the worker had assumed the risk of injury by accepting the job.

Theory and Policy

Workers' compensation provides an exclusive remedy to the worker for work-related injury and sickness without regard to fault, when the harm arose out of and in the course of employment. The worker gives up the right to sue his or her employer for the harm in return for certain monetary recovery, usually for lost wages and medical expenses, but sometimes including other benefits like vocational rehabilitation or retraining. The employer no longer has to worry about defending lawsuits or about disproportionate awards.

States require that employers carry workers' compensation insurance, set aside sufficient resources to cover claims (self-insure) or contribute to state-run workers' compensation award funds. The allowable methods for employer payment vary by state.

The social and economic policy is that these employer "costs" are ultimately paid by society as a whole in the form of higher prices for goods and services. Some theorize that the cost of the program is actually paid for by lowering wages, but that the tradeoff to workers is well worth it. Workers' compensation is also seen as an incentive to employers to develop safer workplaces.

Exceptions

Most states have developed exceptions to the exclusiveness of the workers' compensation remedy in extreme situations. When employers act in bad faith or intentionally or criminally harm employees, many states allow workers to bring lawsuits outside the workers' compensation system. A lawsuit against a third party may also be possible, such as against a manufacturer of faulty or dangerous equipment that caused the injury. In such circumstances, the employer may be able to get reimbursement for workers' compensation benefits already paid.

Conclusion

If you have questions about a workers' compensation claim, a workers' compensation attorney can answer them and advise you of your legal rights.

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