Recently National Public Radio and ProPublica took an in-depth look at the workers’ compensation system across the nation. The news is cause for concern. One article, entitled “The Demolition of Workers’ Comp,” notes that workers’ compensation statutes (such as the Virginia Workers’ Compensation Act) are the result of a “grand bargain” between workers and employers which arose in the first few decades of the 1900s.
The workers’ compensation insurance system we have today came into being because employees were regularly suffering serious injuries at work; nevertheless, in each instance they had to sue their employers the old fashioned way (i.e., in court) to gain compensation for their injuries. Moreover, employers sometimes would go bankrupt due to the damages they were required to pay for injuries resulting from poor workplace conditions. No one was happy.
The article notes that under the grand bargain employees “would give up their right to sue. In exchange, if they were injured on the job, their employers would pay their medical bills and enough of their wages to help them get by while they recovered.” Thus was born the system under which an employee injured on the job files a claim for benefits with the Workers’ Compensation Commission and not a lawsuit in court.
It’s important to keep in mind that workers truly gave up something very valuable when workers’ compensation became the law of the land. With the advent of the law an employer no longer had to fear a lawsuit even if an employee were injured due to the employer’s gross negligence. In exchange the employee had peace of mind because he or she knew that adequate benefits (but certainly not a windfall) would be forthcoming after work-related injuries.
Workers’ compensation programs soon became common throughout the nation. However, it was not until after a federal study in the early 1970s that the current system came into being. The reforms from this period included expanding the requirement of workers’ comp insurance coverage to most employers and providing wage benefits equal to at least two-thirds of regular wages for extended periods of time.
Decades have now passed since the seminal changes described above. A troubling development in recent years has been legislation in many states, in the name of “reform,” to limit significantly the benefits that injured workers can receive. Such efforts should be of concern to everyone who works as the employee of another, for they undermine the grand bargain that is at the very heart of the workers’ compensation system. Our next blog post will discuss these efforts.