Nine States Observe Workers' Compensation Centennial in 2011

As reported in other blogs, 2011 marks the 100th anniversary of workers' compensation as a statutory framework for providing benefits to workers who sustain industrial injuries within the United States. As noted below, nine states led the initial charge in enacting successful workers' compensation acts during 1911. I say "successful" because two other states—New York and Nevada—also enacted basic workers' compensation frameworks during 1911, but they were either declared unconstitutional (New York) or repealed (Nevada).

While the early state workers' compensation acts did not generally provide complete or even comprehensive benefits for lost wages and medical care associated with work-related injuries, the early acts were important in that they established what has become known as the "workers' compensation bargain" where, on the one hand, employers gave up basic common law defenses—e.g., assumption of the risk and contributory negligence—and became liable for work-related injuries without any determination of fault and, on the other hand, workers gave up the right to sue in tort to recover for pain and suffering [for a complete discussion of the origins of workers' compensation within the United States, see Larson's Workers' Compensation Law, ("Larson") Ch. 2, § 2.07]. Recovery under the workers' compensation scheme became not only the sole remedy available to the injured worker, spouses and dependents gave up their common law rights to sue as well [for a complete discussion of the effect of exclusive remedy provisions upon actions filed against the employer by spouses and other dependents, see Larson, Ch 101, § 101.02.].

During the past 100 years, each of the nine initial acts has, of course, been amended many times. Coverage has generally been expanded not only to include classic industrial injuries, but also occupational diseases, many "mental injuries", where there is no physical injury component to the claim [see Larson, Ch. 56, § 56.04, et seq.], and a host of other claims (e.g., sleep apnea) not contemplated a century ago.

Medical benefits have also expanded over the years. Coverage is no longer limited to repair of broken limbs; it now often includes gastric bypass surgery to achieve weight loss to enhance recovery and special modifications to the injured worker's residence, to provide an environment to accommodate the injured worker's special needs.

Basic System Has Been Resilient

Despite the broadening of coverage and efforts from time to time to whittle away at the exclusive remedy provisions of the various state acts—e.g., with regard to so-called "intentional" injuries within the workplace—the workers' compensation bargain remains essentially in place. Indeed, one characteristic shared by the early workers' compensation acts is their core resilience.

System Faces Challenges Nonetheless

That, of course, does not mean the American workers' compensation system is without challenges. One possible challenge comes in the form of President Obama's Healthcare legislation. Its effects on the comp system are far from clear. Some argue that the expansion of health care under the law should have a beneficial effect on workers' compensation claims, that to the extent coverage under the Obama healthcare plan is broad so as to cover virtually everyone, that broadened coverage may reduce the temptation for some workers, who currently do not have hospitalization coverage at all, to file questionable claims in an effort to get the costs of needed medical care covered by an employer. Others counter that the expansion of the federal government's role in overseeing healthcare may lead to oversight in other areas, such as workers' compensation, with a resulting demise of the existing state system of providing benefits. They argue that government-run programs never contract, that once the camel's nose is under the healthcare tent, it is only a matter of time until the camel begins to crowd its way into the workers' compensation scenario.

Other challenges abound. The weakened economy has, for example, introduced significant challenges for employers' return-to-work programs. Employers are often finding it difficult to preserve jobs for able-bodied employees; finding light work and making other accommodations to workers with physical issues is even more problematic. Injured workers who know that jobs await their recuperation have a strong incentive to get well, to swap wage loss benefits—usually no more than two-thirds of the average weekly wage—for full wages upon their return. In a weakened economy, where the worker realizes that a pink slip and not a paycheck likely awaits his or her recuperation, there is certainly a disincentive to get well. Recuperative periods become extended and claims losses rise.

Workers' compensation programs can be important forces in market-to-market competition. If state "A" provides 400 weeks of benefits for loss of use of a hand and state "B" provides only 200 weeks, state "A" is, at least to some extent, at a competitive disadvantage (this discrepancy is one of several arguments used by some who favor the federalization of the workers' compensation system). But aside from state-to-state differences, the interconnectedness of the world economy cannot be ignored. In today's economy, the employer in state "A" must not only compete with the employer in state "B", it must also compete with the employer in China or Peru, who may pay only 10 percent of the American employer's required wage and may not be required to provide any workers' compensation coverage for its employees at all.

Another difficult challenge for the workers' compensation system relates to the scheduled injury treatment of the worker described above—the worker who has lost the use of a hand. What constitutes loss of use? Unfortunately, the determination can vary from state to state since the states may use competing standards. A number of states use impairment standards set the AMA Guides. But which Guides? The new 6th Edition of was supposed to address issues and questions left wanting by the 5th Edition. It may have raised more questions than it answered. Some states use the 6th Edition because their statutes require use of "the latest edition." A few use the 6th Edition by choice. Others still use the 5th, while others use the 4th, or some other variation of the AMA Guides, or even some "home-grown" standard of their own. Can the states agree? Should they agree?

Churchill said, "Democracy is the worst form of government, except for the other forms that have been tried from time to time." Our workers' compensation system, like the democratic system that undergirds it, is imperfect. It was a giant stride forward, however, considering "the other forms [of providing or failing to provide benefits to injured workers] that had been tried from time to time." We salute the nine state jurisdictions that 100 years ago enacted special legislation to provide benefits to "injured veterans" of the work force (see Dr. Arthur Larson's discussion of the costs to society if it ignores the injured worker in Larson, Ch. 1, § 1.03.

Current Comparison of the Nine 1911 State Acts



Centennial celebrations


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