Are States Abandoning Original Intent of Workers Compensation Laws? Study Points To Alarming Trend

by Robert Trivisonno | March 16th, 2015

workers compensation

A new study points to some new alarming trends regarding workers’ compensation.

A recent study of States’ workers compensation systems by ProPublica and NPR reveals an alarming retreat from the original intent behind those systems. Apart from documenting individual stories of striking misfortune and callous decision-making in workers compensation claims, the study sends a greater message: that legislative decisions under the guise of “tort reform” have not only injured the workers themselves but have transferred the burden of paying for those injuries to the taxpayers.

Workers compensation laws came into being in most states in the early part of the 20th century. The systems were designed as a “grand bargain” between business and labor. In exchange for losing the right to sue their employers in court for work related injuries, workers received the security of a system that would pay their medical bills and a portion of their wages during their period of disability.

As the study shows, however, legislative “reforms” in many states over the past decade have caused a decline both in the amount of benefits workers receive and in the instances where compensation is awarded. Although these so-called “reforms” are promoted as being necessary to curb out-of-control costs, statistics show that employer premiums for workers compensation coverage have significantly decreased over an extended period of time. The article also reports significant differences in the level and amount of benefits available to injured workers depending on the state having jurisdiction over their claims.

The study suggests two big picture items for consideration. First, the reduction in availability of workers compensation benefits has already resulted in cost-shifting from the self-supported workers’ compensation system to the taxpayer-funded systems of Social Security Disability, Medicare, and Medicaid.  Second, a potential long-term consequence of this trend could be a call for federalization of the workers’ compensation system to standardize benefits