What is workers compensation?
Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain”. One of the problems that the compensation bargain solved is the problem of employers becoming insolvent as a result of high damage awards. The system of collective liability was created to prevent that, and thus to ensure security of compensation to the workers. Individual immunity is the necessary corollary to collective liability.
What type of compensation is available in workers compensation Cases?
While plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance).
General damage for pain and suffering, and punitive damages for employer negligence, are generally not available in workers’ compensation plans, and negligence is generally not an issue in the case. These laws were first enacted in Europe and Oceania, with the United States following shortly thereafter.
Workers’ compensation statutes are intended to eliminate the need for litigation (and the limitations of common law remedies) by having employees give up the potential for pain- and suffering-related awards in exchange for not being required to prove tort (legal fault) on the part of their employer. The laws are designed to ensure that employees who are injured or disabled on the job are not required to cover medical bills related to their on-the-job injury, and are provided with monetary awards to cover loss of wages directly related to the accident, as well as to compensate for permanent physical impairments.
These laws also provide benefits for dependents of those workers who are killed because of work-related accidents or illnesses. Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents. State statutes [in the United States] establish this framework for most employment. Federal statutes [in the United States] are limited to federal employees or those workers employed in some significant aspect of interstate commerce.
In the United States, most employees who are injured on the job receive medical care responsive to the work-place injury, and, in some cases, payment to compensate for resulting disabilities. Generally, an injury that occurs when an employee is on his or her way to or from work does not qualify for worker’s compensation benefits; however, there are some exceptions if your responsibilities demand that you be in multiple locations, or stay in the course of your employment after work hours.
The federal government has its own workers’ compensation program, subject to its own requirements and statutory parameters for federal employees. The federal government pays its workers’ compensation obligations for its own employees through regular appropriations. In the vast majority of states, workers’ compensation is solely provided by private insurance companies. 12 states operate a state fund (which serves as a model to private insurers and insures state employees), and a handful have state-owned monopolies. To keep the state funds from crowding out private insurers, they are generally required to act as assigned-risk programs or insurers of last resort, and they can only write workers’ compensation policies. In contrast, private insurers can turn away the worst risks and can write comprehensive insurance packages covering general liability, natural disasters, and so on. Of the 12 state funds, the largest is California’s State Compensation Insurance Fund.
The California Constitution, Article XIV section 4, sets forth the intent of the people to establish a system of workers’ compensation. This section provides the Legislature with the power to create and enforce a complete system of workers’ compensation and, in that behalf, create and enforce a liability on the part of any or all employers to compensate any or all of their employees for injury or disability, and their dependents, for death incurred or sustained by said employees in the course of their employment, irrespective of the fault of any employee. Further, the Constitution provides that the system must accomplish substantial justice in all cases expeditiously, inexpensively. It was the intent of the people of California when they voted to amend the state constitution in 1918, to require the Legislature to establish a simple system that guaranteed full provision for adequate insurance coverage against liability to pay or furnish compensation. Providing a full provision for regulating such insurance coverage in all its aspects, including the establishment and management of a State compensation insurance fund; full provision for otherwise securing the payment of compensation; and full provision for vesting power, authority and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, in that the administration of such legislation accomplish substantial justice in all cases expeditiously, inexpensively, and without encumbrance of any character. All of which matters is the people expressly declared to be the social public policy of this State, binding upon all departments of the State government.
Underreporting of injuries is a significant problem in the workers’ compensation system. Workers, fearing retaliation from their employers, may avoid reporting injuries incurred on the job and instead seek treatment privately, bearing the cost themselves or passing these costs on to their health insurance provider – an element in the increasing cost of health insurance nationwide.
It is illegal in most states for an employer to terminate or refuse to hire an employee for having reported a workplace injury or filed a workers’ compensation claim. However, it is often not easy to prove discrimination on the basis of the employee’s claims history. To abate discrimination of this type, some states have created a “subsequent injury trust fund” which will reimburse insurers for benefits paid to workers who suffer aggravation or recurrence of a compensable injury. It is also suggested that laws should be made to prohibit inclusion of claims history in databases or to make it anonymous