How Workers' Comp Solved the Biggest Problem for Injured Workers

Posted by Gregory Zaparyniuk, ARM on Jul 5, 2018 8:00:00 AM

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What would injured workers do without workers’ compensation? Unless you have money readily available to pay for injury-related medical bills and support yourself while you recover outside of work, you may have had to sue your employer and prove that they were at fault for causing your injury. 

Prior to the enactment of workers’ compensation law, these lawsuits often took a very long time to resolve. Injured workers fared poorly, and the employers had negative impacts, as well. Thus, the Grand Bargain was born to help provide wage replacement and medical benefits to injured workers in exchange for them not filing suit again their employers. These discussions became the cornerstone of workers’ compensation insurance today.

The workers’ compensation system began in the early 1900s, with states like Maryland, Massachusetts and Wisconsin passing or attempting to pass individual acts.  Since manual laborers rarely had their own insurance and often lacked money to pay for medical expenses, they would find themselves without proper medical attention.  In some cases, the delay in treatment, or lack of treatment altogether, may have limited their return to work or influenced the type of work they could perform post-injury.  The workers’ comp system would act as a protector for injured workers, no matter how big or small the injury was.

Prior to this program’s development, injured workers were not the only ones suffering. Employers were impacted by the financial hardships of these lawsuits and the unpredictable nature of litigation. Sometimes the suit would go in favor of the injured worker and sometimes the employer won. Employers tended to fight the lawsuits to avoid financial losses, but also came to see that good workers were lost because of permanent disabilities that may have been avoided with timely and proper care. These injured workers were trained and knew their jobs, so the lost productivity while the employers trained replacements cost the employers even more.

Related: Why Can't I Choose My Pharmacy Under Workers' Comp? 

After the Triangle Shirtwaist factory fire in 1911 many states started to accept the idea of workers’ compensation. Less than twenty years later, all but four states had implemented a workers’ compensation system, helping to secure relief for American workers injured on the job. 

Injured workers waived the opportunity to seek punitive damages in exchange for “sure and certain” relief of their injuries. Now, the employer would be responsible for the payment of their treatment as well as a portion of their lost wages. The injured worker now would have minimal costs to bear after being injured on the job. 

One might say, workers’ compensation was one of the earliest win-win agreements – truly a grand bargain.  As we see reforms and new legislation being introduced within the workers’ compensation arena each year, the premise of the system remains the same. What does the future hold for this system and the injured workers within it? Only time will tell, but we rely on legislators, advocates and injured workers themselves to consistently fight for an improved system that is fair and equitable to all – just as it started.

Topics: Workers' Compensation