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THE FAILURE OF WORKERS COMPENSATION
(A BAD MODEL FOR OTHER PROGRAMS)
When a worker is hurt, workers
compensation is the exclusive remedy against an employer. Lawsuits
against employers are not allowed, so the worker has no access to the court or
right to jury trial.1
The workers compensation program has
been rife with problems almost since its inception. It is a bureaucratic,
adversarial system that shortchanges injured workers, even while employers
sometimes struggle with rising workers compensation insurance rates.
- Chipping away at already meager
compensation. Over the years and in most states, state legislatures
have chipped away at workers benefits, stiffening eligibility
requirements for recovery, and putting medical treatment decisions in the hands
of insurance companies.
- Data consistently shows that a worker
injured at the workplace earns significantly less than before the injury, even
after returning to work.
- In general, workers compensation
systems allow no compensation for lost quality of life despite the
devastating impact of some injuries.
- In many states, workers must now go
through a restrictive, longer, less efficient, and ultimately less successful
process to make claims and receive compensation.
- Contrary to its original
no-fault principle, the system has become heavily adversarial,
often requiring workers to prove essentially litigate
their claims. Yet these workers are stripped of the legal protections that
accompany the court system.2
- The fraud of worker
fraud. In the early 1990s, insurers and businesses began a
misleading media campaign focusing on employee fraud, even though only a tiny
percentage of workers one to two percent engaged in it. Despite
its lack of substance, the campaign caused rights and benefits to be cut in
many states, and created an unfair stigma for injured workers.
- System costs.
Workers compensation is extremely costly, and cuts in benefits
have not alleviated this. Workers compensation insurance is subject to
the same cyclical insurance patterns as the entire property-casualty insurance
- Safety. Because the
system is not designed to reflect the full costs of accidents, it does not
effectively encourage safety improvements.
For more information, see Center for
Justice & Democracy, Workers Compensation - A Cautionary Tale
(September 20, 2006)
1 A court
can only review the workers compensation boards decision on
questions of law, not on factual grounds about determination of type of injury
or duration of benefits.
of specific ways the no-fault standard has been diluted in some
states are: requirement that work be more than 50 percent of the cause of
injury or illness; requirement that work be a substantial contributing
cause or major contributing cause of injury; requirement that
occupational injury or disease is clearly work-related and a
substantial factor in the cause of the resulting disability; and raising
the standard of causation where there are pre-existing
Center for Justice and Democracy
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