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Workers' compensation

Workers' compensation systems (workers comp or compo) provide for financial compensation for work-related injuries of employees, in particular compensation of loss of wages, sometimes also for medical costs. These laws are usually a feature of highly developed industrial societies. Employees' compensation laws are often only implemented after long and hard fought struggles by trade unions, particularly in early industrialisation. There are often benefits available to dependents of workers killed on the job as well.

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.

Compensation prior to statutory law

Prior to statutory law, employees who were injured on the job were only able to pursue their employer through civil or torts law. In some countries like the United Kingdom this was difficult due to the legal view of employment as a master-servant relationship. Proof of employer malice or negligence was usually required, but difficult for an employee to attain. Although employers' liability was unlimited, courts usually awarded in favour of the employer, and paid little attention to the full losses experienced by workers: medical costs, lost wages, and damages for loss of future earning capacity. Chase H

Statutory compensation law

Statutory compensation law provided a number of advantages to both employees and employers. A schedule is drawn out to stipulate the amounts and forms of compensation an employee is entitled to if he/she has sustained given kinds of injuries. Employers can buy insurance against such occurrences. However, the specific form of the statutory compensation scheme may provide detriments. Statutory schemes often award a set amount based on the types of injury. These payments are based on the ability of the worker to find employment in a partial capacity: a worker who has lost an arm can still find work as a proportion of a fully-able person. This does not account for the difficulty in finding work suiting disablity. When employers are required to put injured staff on "light-duties" the employer may simply state that no light duty work exists, and sack the worker as unable to fulfill specified duties. When new forms of workplace injury are discovered, for instance: stress repetitive strain injury silicosis; the law often lags behind actual injury and offers no suitable compensation, forcing the employer and employee back to the courts (although in common-law jurisdictions these are usually one-off instances). Finally, caps on the value of disabilities may not reflect the total cost of providing for a disabled worker. The government may legislate the value of total spinal incapacity at far below the amount required to keep a worker in reasonable living for the remainder of their life.

A related issue is that the same physical loss can have a markedly different impact on the earning capacity of inviduals in different professions. For instance, the loss of a finger could have a moderate impact on a banker's ability to do his or her job, but the same injury would totally ruin a pianist.

Statutory compensation in the United States

Workers' compensation laws were enacted to make litigation less costly for both sides and to eliminate the need for injured workers to prove their injuries were the employer's "fault". The first US law was passed in Maryland in 1902. In the next twenty years, many states followed. This system was formerly known as workman's compensation, an expression that sustains today. Some jurisdictions, such as New York and Texas, have adopted the term workers' compensation as a gender-neutral alternative.

In the United States most employees who are injured on the job have an absolute right to medical care for that injury, and in many cases monetary payments to compensate for resulting temporary or permanent disabilities.

Most employers are required to carry workers' compensation insurance, and in most states heavy financial penalties may be imposed on an employer that does not. In many states there are public uninsured employer funds to pay benefits to workers employed by companies who illegally fail to purchase insurance. Insurance policies are available to employers through commercial insurance companies: if the employer is deemed an excessive risk to insure at market rates, it can obtain coverage through an assigned-risk program.

It is illegal in some states (although not in others) for an employer to terminate an employee for reporting a workplace injury or for filing a workers' compensation claim. Most states also prohibit refusing employment for having previously filed a workers' compensation claim. However, employers can consult commercial databases of claims data and it would seem nearly impossible to prove that an employer discriminated against a job applicant because of his or her claims history. To abate discrimination of this type, some states have created a "subsequent injury trust fund" which will reimburse insurers for benefits paid to workers who suffer aggravation or recurrence of a compensable injury. It is also suggested that laws should be made to prohibit inclusion of claims history in databases or anonymise it. (See privacy laws.)

It is also illegal to falsely claim workers' compensation benefits. Some employers hire private investigators to videotape claimants surreptitiously; some of these sub rosa videos have shown employees engaging in sports or other strenuous physical activity despite disability. TV shows have recently been made using these videos. However, this evidence may be ruled inadmissible in lawcourts if it has been taken unlawfully.

Some employers vigorously contest employee claims for workers' compensation payments. In any contested case, or in any case involving serious injury, a lawyer with specific experience in handling workers' compensation claims on behalf of injured workers should be consulted. Laws in many states limit a claimant's legal expenses to a certain fraction of an award, payable only if the recovery is successful. However, in certain states this fee is allowed to be as much as 40% or more of the monetary award.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Workers compensation".

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