The History of the Workers' Compensation
Prior to the evolution of the workers compensation system, workplace injuries were treated much like car accidents. In order to receive compensation for an injury, an employee would have to go to court and prove that his or her employer acted negligently. This system had many disadvantages for both parties. Lawsuits can be costly and time consuming, as well as uncertain; an employee could not rely on this system to provide for them in the case of an accident. The uncertainty also affected employers because they could not predict what their administrative expenses would be or how much money they would pay out. They also had high insurance premiums. The problems with the existing system, combined with societal changes, led states to begin adopting workers' compensation statutes in the 1910's.
The states that first adopted workers compensation systems had high liability insurance costs for employers and strong unions. The workers compensation system is widely viewed as the result of two groups, employers and employees, which are often adversaries, finding that they had common interests. Each realized that there could be benefits for them under a new system. Although there are different theories about what the strongest factors were for the rapid adoption of worker compensation laws across the country, most people agree that the system was not imposed on either employee or employers but that they each saw potential advantages for themselves.
Some of the factors which may have led to the rapid adoption of these laws include rising workplace injuries and tougher liability laws for employers. In the early twentieth century, the number of hazardous job were on the rise, and as injuries increased, many state legislatures responded with tougher laws for employers. As employers faced greater responsibility for workplace injuries and more threats of lawsuits they may have been looking for an alternative to the current system. They were also concerned about the new laws they would face if the system did not change.
Workers, on the other hand, did not feel certain that the current system would give them any redress for their injuries. They wanted assistance that was faster and more certain. In response to the changing conditions of the time, major unions changed their attitudes about workers' compensation. They decided that employee odds of getting a better average benefit for their injury would be increased under the new system. Although some of the benefits would likely be smaller, more people would be covered and with less hassle. Workers were willing to have their wages reduced in exchange for a more reliable benefit. There were also willing to give up their right to sue their employer.
The crux of the workers compensation system is that employees forfeit their right to sue their employer in exchange for workers compensation. The employer cannot be sued and the employee does not need to prove that the employer was at fault. This gives employers the relief of knowing they will not be sued and it reduces some of their costs. Since employees no longer have to prove that the employer was at fault they can more easily get redress for injuries.
Whether the workers' compensation system was really the result of combined efforts or the result of a lobbying effort by one group, laws were quickly enacted across the country. All states now have workers' compensation laws and they seem to be providing satisfactory results for employees and employers as there is no big push for reform. It is hard to know for sure but this non-adversarial approach to dealing with workplace injuries may also have the added benefit of improving employee-employer relationships.
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