The Background of Workers’ Compensation

Workers’ compensation is a form of insurance for employers in the event that an employee is injured on the job or sustains injuries because of work-related tasks. The purpose of the insurance is to protect the employee from having to pay for expenses from a work-related injury out of pocket; however, the employee then relinquishes their right to sue the employer for negligence. Many workers’ compensation cases still enter litigation due to compensation being denied by the insurer or seen as unfair by the employee.

Prior to the Industrial Revolution, there wasn’t really a need for employers and workers to be protected through such things as workers’ compensation laws. The manufacturing processes that the Industrial Revolution brought came with a massive spike in the opportunity for and seriousness of employees to suffer injuries or ailments at or because of work. At this time, a common law was abided by that required an injured employee to prove that negligence by their employer caused the injury. This was often very difficult to do, so employees' lawsuits against employers were not very successful; however, if they were, it was detrimental to the employer. It wasn’t until events such as the Monongah mine explosion in 1907 that the public really started to realize that more attention needed to be paid to these risks and something needed to be done to assist victims when injuries occurred.

In 1908, Congress passed the Federal Employer Liability Act (FELA) under the strong endorsement by President Teddy Roosevelt. This act was meant to, “put on the railroad industry some of the costs of the legs, arms, eyes, and lives which it consumed in its operation.” While it strictly pertained to the railroad industry, it was a giant leap in the right direction. In the next three years, various programs were studied to find a reasonable solution that worked for both employers and employees. In March 1911, the Triangle Shirtwaist Factory in Manhattan, New York, erupted in flames, killing 146 people and injuring many more. This was the straw that broke the camel’s back.

Just two months later, Wisconsin became the first state to adopt a workers’ compensation program in which both employees and employers had to give and take. If employers were going to be held liable for costs related to work injuries, maybe they will pay more attention to the safety of the workplace. Nine other states joined Wisconsin before the close of the year, all of which offered voluntary participation. Employers could choose whether or not to purchase the insurance. By the end of the decade, it was legal for states to require employers to provide workers’ compensation for their employees, and almost every state had adopted a workers’ compensation plan. It was decided that aside from interstate commerce employees, it was best to leave these matters up to the state. They are federally mandated for federal workers, and each state has a state workers’ compensation board to handle its cases.

As time has progressed, so has the amount and type of compensation offered to employees injured on or because of their job. The creation of these programs helped ease the minds and bank accounts of those injured , but it also prompted employers to take a much more serious look at their safety procedures. When the employer spends more time and effort ensuring the safest work environment they can, the number of workers who are injured (especially due to employer negligence) will decrease.

Niko Pothitakis
Attorney Pothitakis Law Firm, P.C.
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