Workers’ Injury Law and Advocacy Group Holds 40th Anniversary Symposium on the Status of Workers’ Compensation in the United States

Workers’ Injury Law and Advocacy Group Holds 40th Anniversary Symposium on the Status of Workers’ Compensation in the United States

 By Stephen Embry, Esq.

Workers’ compensation remains inadequate and inequitable 40 years after the 1972 National Commission on Workers’ Compensation Laws reviewed the state of injured workers benefits. That is the conclusion reached by scholars and practitioners in the field of workplace injury who recently gathered in Chicago to examine the history and prognosis for workers’ compensation in a national symposium sponsored by the Workers’ Injury Law and Advocacy Group.

The symposium marked a recent confluence of events occurring 100 years ago which led to the adoption of the first wave of workers’ safety laws and workers’ compensation laws in the United States.

In 1911 the Triangle Shirtwaist Fire claimed the lives of over 100 workers and sparked an outrage that led to the creation of the first workers’ compensation laws, the first industrial safety laws and the creation of the United States Department of Labor.

Workers’ compensation system is often referred to as a great compromise in which workers’ gave up their rights to damage suits while employers agree to pay prompt benefits without fault to workers for injuries occurring during the course and scope of employment. However it is a compromise under constant attack.

By the early 1970’s there was a rapidly growing suspicion that this agreement needed revision and that the compromise was increasingly one sided in favor of the employer.

Speakers at Workers’ Injury Law and Advocacy Group Symposium included Professor John Burton, Professor Peter Barth and Attorney John Lewis, original members of the 1972 Commission who shared their memories of how the Commission came into being and how it conducted its affairs.

Professor Burton quipped that in 1972 there were four de facto political parties in the United States Congress: Northern Democrats, Southern Democrats, Republicans and Jacob Javitts. He recalled the role Senator Javitts and his staff had in inserting the mandate for the 1972 Commission into the legislation creating the Occupational Safety and Health Administration and the National Institutes of Occupational Safety and Health.

He mused that this may have been a historical fluke difficult to recreate. However, Professor Burton noted that the Commission was filled with Republican academics and professionals and it was likely the anticipation that the Commission’s finding would bland on un-exciting. However, it did not turn out as expected.

The Commission held hearings and meetings around the country and its members were shocked by its findings. It concluded that the state workers’ compensation system were “inadequate and inequitable.” In particular, it found that wage replacement and benefit levels to support workers and their families were so low that many workers were unprotected or uncovered by the patchwork of state based workers’ compensation systems. They found that medical care often did not meet basic needs and that the systems were rife with caps and limited durational benefit restrictions which resulted in inadequate benefits to replace wages lost as a result of occupational injuries. Professor Burton recalled that the Commission met in a safehouse in Virginia to craft its proposals, isolated from the political winds of the times. There, they unanimously agreed to recommend 19 essential minimum standards for state-run systems with adoption of an enforcement driver that was to have resulted in Federal action if the states did not meet these minimum requirements in a prompt fashion.

Professor Burton noted that there were several themes which were not anticipated by the Commission but which have grown increasingly important over the last 40 years. These include the growing and inadequacy of partial disability for partial wage lost and the rise of occupational diseases as well as the effects of managed care of medical benefits.

Stephen Embry, past president of the Workers’ Injury Law and Advocacy Group, who had worked on the Presidential News Summary in 1972, amplified Professor Burton’s observations. He noted that when President Nixon arrived in the White House, both Jacob Javitts and Barry Goldwater were both Republicans while the Democratic party included Strong Thurman and Hubert Humphrey. Thus, both parties faced consensus-driven, internal political pressure which encouraged consensus creation. He noted that consensus politics faced challenges in the early 1970’s arising from pressures created by the Civil Rights and Vietnam and anti-war movements, that the Republican party faced a choice of trying to attract southern Democrats or to appeal to working class voters on social and economic issues.

This led some segments of the Republican party, to appeal to the working class voter on social and economic issues, reflected in support for creation of the Occupational Safety and Health Administration, NIOSH and a benign neglect towards workers’ compensation.

The symposium noted that whatever the historical and political elements were leading to adoption of the 1972 Commission’s findings, it initially had a marked positive effect at the State and Federal levels, as many states adopted many of the essential recommendations of the Commission and improved benefit levels.

At the Federal level, the United States Congress adopted the 1972 amendments to the Longshoreman and Harbor Workers' Compensation Act, which included many of the recommendations of the Commission. Professor Peter Barth, one of the members of the 1972 Commission noted that workers’ compensation benefit levels and coverage at the State level improved dramatically until the early 1980’s. This was likely driven by several influences, including the fear of Federal action and the Commission findings.

The consensus was that while improvements in state workers’ compensation systems were real, it was also unfortunately temporary. Labor Leader James Ellenberger noted that since the early 1980’s benefit levels have been eroded as the states have engaged in a reverse auction, driving benefits for workers down. Many states now have caps or durational limits on benefits including widow’s benefits. The legislators and courts have also curtailed workers’ compensation remedies by inserting procedural and evidentiary road blocks to workers’ success. These include the elimination of the humanitarian rule that workers’ compensation acts are to be construed liberally and inserting instead requirements that that claimant must meet heavy evidentiary burdens, including requirements that the work activity be the sole or predominant cause of the injury. Benefits are often awarded only on a proportionate basis reflecting comparative cause. This has driven up costs and amounts of litigation while dramatically reducing workers’ compensation benefits paid to workers and encouraging them to seek alternative remedies.

Professor Emily Spieler reported that the decline in coverage and benefits since the early 1980’s has had the effect of decreasing the role workers’ compensation plays in the national social net and has decreased incentive to employers to improve workplace safety. She noted that while reported injuries have dropped, this is likely not due to a drop in actual injuries. Instead, workers and their attorneys have increasingly turned to other remedies, including Social Security disability, as an alternative to the increasingly inadequate workers’ compensation systems.

James Ellenburger reported that this has led to increased pressures for repeal of the exclusive remedy provisions of the workers’ compensation acts and to allow workers to sue their employers directly. Attorney Gerry Rosenthaul reported the experience in Florida, which presently has a declaratory judgment action pending to end the exclusive remedy provisions of the state Workers’ Compensation Act due to radical reductions in workers’ compensation benefits in the sunshine state. He noted Florida has one of the most regressive workers’ compensation acts in the country with marked durational limitations, caps on widow benefits and evidentiary requirements in occupational disease cases that are virtually impossible to meet. He also noted that it is becoming increasingly difficult for workers to find doctors willing to participate in workers’ compensation systems due to low payments levels and increased overhead.

Attorney Matthew Dake of Iowa expanded on the declining participation of doctors in treatment of work-related injuries. He noted that many states have now given the employer the right to choose the claimant’s doctors thereby discouraging claimants from participating in state workers’ compensation systems and skewing the system in favor of employers. He reported on the findings of Dr. Levine from UCLA, who found that fee schedules, care guidelines and increased overhead costs have resulted in many medical professionals across the country from refusing to accept a work-related injury.

There is a growing trend to make medical care arbitrary and capricious by adoption of medical guidelines and evidenced based medicine which is more often economic-based rather than based or founded on experience or evidence. Attorney Dakes reported on the Iowa Commission on the American Medical Association Guides to the Evaluation of Permanent Impairment, which revealed that the Guides were created without wide participation by clinicians and were largely arbitrary based upon diagnostic criteria rather than a realistic determination of how injury would impair the actual worker in his life and work. The prime motivating factor in the Guides seems to have been consistency rather than accuracy. This may have reflected an elevation of actual rate setting over the needs of workers. He noted that if consistency alone was the guiding principle, then it would have been simpler and equally corrective to simply assign an arbitrary rating to all conditions, even though this clearly would not have reflected the real impact that the injuries had on workers and their families.

Linda Reinstein of the Asbestos Disease Awareness Organizations put a human face on the current inadequacies of occupational disease statutes, describing the economic, social and emotional impact on families who have lost their father, mother, husband or wife to occupational disease. Many of these families either do not know about the workers’ compensation or fail to pursue workers’ compensation as a result of inadequate and inequitable benefit levels.

Virginia Ruiz of Farm Workers’ Justice described the plight of agricultural workers who represent one of the largest groups of workers currently unprotected by workers’ compensation systems. While the 1972 Commission had called for universal coverage of all workers, the recent trend has been to expand the exclusion of worker groups from workers’ compensation protection.

Kim Bobo of Interface Justice provided an outline for a course of action to revise the decline of workers’ protections. She promoted the use of clearer, more accurate language to reflect the impact that injuries have on workers. Current workers’ compensation actions should be more accurately referred to as the Disposable Worker Act since they encourage employers to dispose of workers following injury rather than to improve safety. She noted that the current trend to fraudulently call workers independent contractors, and thereby exclude them from workers’ compensation coverage or protection, was in fact a benefit and wage theft and should be so labeled.

Attorney Rick Swanson reported on current activities at the federal level to re-visit the 1972 Commission’s findings which have been introduced by Representative Baca and recent hearings by Representative Lynn Woolsey at the urgency of Workers Law and Injury Advocacy Group, which brought to light many of the continuing inadequacies in state workers’ compensation systems. He also noted efforts to address the Robin Hood in reverse, Medicare Secondary Payer Act, which threatens to divert workers’ compensation benefits from workers to the Federal Medicare Fund.

The interplay of Medicare and workers’ compensation was also highlighted by Ishita Sengupta, who discussed recent findings of the National Academy of Social Insurance that the cost to employers for workers’ compensation has fallen from just over 2% of payroll in 1989 to under 1% in 2010, the lowest level since 1980. She noted that Social Security disability benefits have also increased dramatically in the same time, perhaps not an unrelated event.

In 1990, Social Security disability insurance paid $1.09 in cash benefits for every $100.00 of covered wages, a figure which has now increased to $2.40 per $100.00 of wages in 2010. Over the same period, medical costs have also shifted from the corporations to taxpayers while at the same time, the share of medical and disability benefits paid to workers has shifted dramatically. In 1985, nearly 70% of workers’ compensation benefits were paid to workers for wage replacement and a little more than 30% went to medical costs. By 2010, the figures were approximately equal.

The growth of the Medicare Set-Aside requirements seem to threaten and accelerate this shift from workers’ needs as Medicare and other health insurance schemes seek to snatch benefits from workers to fund general health insurance funds. However, the final session of the symposium reported at least some slowing of the pendulum may be apparent. The attendees noted a number of recent victories at the state level and in defeating anti-worker legislation and benefit reduction legislation. These combined with a proven ability of Federal action following the 1972 Commission to promote more adequate benefits in the first, eight years following the Commission, showed the consorted action at the federal and state levels could improve the plight of injured workers.

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