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Historical Perspective of Workers' Compensation

By Edited Nov 13, 2013 0 0

I. Workers’ Compensation Goes Back to the Early Babylonian Days

Employers were required by law to provide for their workers and/ or slaves during periods of illness or lack of work.

o They were also required to provide medical care.

II. A Master-Servant Rule Existed Throughout the Early History of Europe

o The servant lived on the master's premises.
o The master provided shelter and medical care in times of injury or illness.
o If the servant became totally incapacitated, the master took care of the family.
o If the servant died, the master took care of the family and they were allowed to remain on the estate.
o A most recent example is the feudal system in Russia during the 1800s.

III. This Changed with the Industrial Revolution of the 1700s and 1800s

o Workers left the farms and went to the cities.
o The master was replaced by factories which employed hundreds of nameless individuals.
o The employer did not have to take care of the employees if they got injured.
o Injured employees had to sue their employers in civil court in order to obtain any benefits; this took an interminable length of time.
o Injured employees often became indigent and wards of the state .

IV. The Employer Could Use Three Common Law Defenses to Thwart their Employees' Attempts to Obtain Compensation

o Assumption of Risk.

i) the employees knew they were performing a dangerous job··coal miners.

ii) the accident happened during the normal course of duty, i .e. a blaster loses fingers while detonating a charge.

o The Fellow-Servant Rule.

i) if a co-worker/superior caused the accident, the employer would not be liable.

o Contributory Negligence.

i) if the employee caused his own accident, even partially , the employer would not be liable.

Obviously, the system was not working.

V. Social Reform Came to Europe in the Late 1800s

o A movement swelled over the many nations to make the employer responsible for injuries that occurred to their workers on the job.
o Germany enacted the first national no-fault workers compensation system.
o In 1906, the United States enacted the Federal Employees Liability Act.

i) covered employees involved in interstate commerce in Washington, D.C., and the territories.

ii) did away with the Common Law defenses.

iii) substituted comparative negligence for contributory negligence.

VI. Each State Began to Enact their own Workers Compensation Laws

o In 1911, California enacted the Roseberry Act which made no-fault workers compensation an elective insurance plan for employees; few elected to go with the plan.
o In 1913, the Boynton Act was passed. It made workers compensation compulsory and established a complete workers compensation system.
o 1917 - the Workers Compensation Insurance and Safety Act was passed.

i) made it financially restrictive to be unlawfully uninsured.

ii) made workers compensation an exclusive remedy, except in third-party cases .

VII. Exclusive Re.edy Benefited 80th the Employer and the Employee

o The employer got a schedule of benefits and could easily calculate the costs of an injury.
o The employee, by giving up the right to sue civilly, got prompt benefits.

A Short History of Workers’ Compensation

In essence, Workers’ Compensation is an organized system for compensating workers injured in the course of their employment.  The common law was most unsatisfactory in compensating the injured worker for an industrial accident. The great social reformers of the early twentieth century recognized this fact, the ultimate result being the passage of “workmen’s “compensation laws. The first workmen’s compensation law to be held constitutional was Wisconsin’s in 1911. By 1921 all but a few of the American states had enacted such legislation.

At the present time, every state in the United States has a workers’ compensation law. Mississippi was the last state to adopt work comp laws in 1948. It has been said that no subject of labor legislation ever has made such progress or gained such general acceptance of its principles in to brief a period of time.

The theory underlying the WC acts never has been stated more adequately than in the old campaign slogan “The cost of the product should bear the blood of the workman.”  The accident losses of modern industry are to be treated as a cost of production, like the breakage of tools or machinery. Thus, the financial burden is lifted from the shoulders of the employee and placed upon the employer, who is expected to add it to his costs and so transfer it to the consumer.

California Workers’ Compensation requires employers have some type of insurance or self-insured coverage in the event an employee is injured while in the course and scope of their employment.

Labor Code §3700: Every employer except the state shall secure the payment of compensation in one or more of the following ways: (a) by being insured against liability to pay compensation [1] by one or more insures duly authorized to write compensation insurance in this state. (b) By securing from the Director of Industrial Relations a certificate of consent to self-insure either as an individual employer, or as one employer in a group of employer, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his or her employee. (c) For any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state, including each member of a pooling arrangement under a joint exercise of powers agreement (but not the state itself), by securing from the Director of Industrial Relations a certificate of consent to self-insure against worker’ compensation claims. Which certificate may be given upon furnishing proof satisfactory to the director of ability to administer workers’ compensation claims properly, and to pay workers’ compensation claims that may become due to its employees. On or before March 31, 1979, a political subdivision of the state which, on December 31, 1978 was uninsured for its liability to pay compensation, shall file a properly completed and executed application for a certificate of consent to self-insure against workers’ compensation claims. The certificate shall be issued and be subject to the provisions of Section 3702.

For more information on workers’ compensation see the following;

California Workers' Compensation: What to Do If You are Injured at Work
California Workers' Compensation: Permanent Disability Benefits
California Workers' Compensation: Temporary Disability Benefits  

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