Why is Workers Compensation Important?
Understanding Workers Compensation’s Purpose Can Help You Make Better Decisions About Your Claim
Society’s response to an Industrial Revolution-era wave of workplace injuries resulting in disability, death, and poverty, today’s state workers compensation systems (and federal employee protection laws) were born from a compromise between labor (employees), management (employers), government, insurance, and the public.
Indeed, workers compensation is a vast departure from common law torts. Instead of looking to right a wrong when someone acts irresponsibly, workers compensation aims to protect injured employees and their families.
As with most things that result from the give-and-take of negotiation, workers compensation is an area of the law that pleases few.
Injured employees and their advocates (me included) argue that workers comp payments are inadequate, the claim process allows too much delay and bad faith, not enough injuries and conditions are covered (such as cumulative trauma/repetitive motion in Virginia), and employers and insurance companies have too much control over medical treatment for injured workers.
In contrast, employers argue that there is too much fraud, the system is too expensive, and they should not bear the cost when the harm did not arise from their negligence or intentional act.
This article explains the purpose of workers compensation so that you can (1) make better decisions about your case, such as deciding what evidence to develop or pretrial discovery to conduct, or if a work injury settlement is your best option, and (2) form your own opinions about the adequacy of workers compensation and whether your state legislature should strengthen it.
Read on for an explanation of the purpose of workers compensation.
Then, call us at (757) 810-5614 or (804) 251-1620 if you have questions or concerns about your case.
We get results for injured employees.
What are the Primary Objectives of Workers Compensation?
Regardless of which state has the power to decide your occupational injury or illness claim, each state workers compensation system has the purposes below.
Indeed, federal workers compensation systems like the Federal Employees Compensation Act for federal employees, the Federal Employers Liability Act for railroad employees, and the Longshore and Harbor Workers Compensation Act for shipyard employees share these goals.
Purpose #1: Workers Compensation is a Compromise Between Employer and Employee
Workers compensation systems are compromises between employers and employees to settle differences about how the law should treat work-related personal injury claims.
Both sides suffered before the development of modern workers compensation acts. Employers faced the potential for high litigation costs or a heavy judgment that could bankrupt them. Employees had to overcome traditional defenses of negligence claims and endure the months or years it would take to get a decision. Therefore, workers compensation was a “grand bargain” that helped the two sides make peace.
These workers compensation laws are “a carefully balanced societal exchange between the interests of employers, employees, insurers, and the public.“
Under this exchange, employees receive reduced but certain benefits for covered injuries, illnesses, and death regardless of fault or liability. In exchange, workers give up their rights to sue their employers in civil court if they get hurt or sick.
Employers accept relaxed standards of proof (by waiving common law defenses such as assumption of the risk, contributory negligence, or the fellow servant doctrine) and must pay the statutory benefits in eligible cases. However, employers receive protection from lawsuits and large jury verdicts in tort lawsuits that could bankrupt their businesses.
Purpose #2: Workers Compensation Has a Humane and Beneficent Purpose
Courts recognize that workers compensation is corrective litigation with humane and benevolent purposes.
Therefore, courts must liberally construe the statutes to favor injured employees when a dispute arises.
This liberal construction principle expands eligibility for workers compensation to cover more employees. However, liberal construction in favor of injured workers does not mean the Workers Compensation Commission will award every claim.
Purpose #3: Workers Comp Pays Injured Workers for Lost Wages Due to Disability from a Work-Related Injury or Disease
A critical purpose of workers compensation acts is to compensate employees for lost wages, lost opportunities earn a living, and permanent impairment from accidental injuries arising in the workplace.
The quick provision of income replacement benefits provides financial stability that helps injured employees focus on their recovery and return to the workforce sooner.
Purpose #4: Workers Comp Provides Injured Workers with Medical Care and Rehabilitation Services that Promote Healing and Recovery
A crucial purpose of workers compensation is to help injured employees return to work, even if permanent restrictions limit them to light duty, and resume normal activities.
Therefore, although workers compensation is not a form of health insurance, it does provide medical treatment to injured workers. This health care includes but is not limited to, hospitalizations, surgeries, diagnostic imaging, medical appointments, prescription drugs, therapy, and home and vehicle modifications.
Purpose #5: Workers Comp is Meant to Resolve Disputes About Work Injuries Promptly and Efficiently
Litigation is expensive.
For example, product liability and car accident lawsuits involving catastrophic injuries such as traumatic brain injury (TBI) or spinal cord injury (SCI) may require you to spend more than $100,000 on expert witnesses.
In addition, civil lawsuits also take a long time to finish. Indeed, in personal injury cases such as truck accident lawsuits, you may have to wait three years or more after the crash to have a trial by jury.
State legislatures designed workers compensation to be different.
One purpose of workers comp is to listen to evidence, resolve disputes, and deliver benefits in much less time than courts take to decide civil actions. As one court has said: “To win only after litigation, to collect only after the employment of lawyers, to receive the sum only after months or years of delay, was to the comparatively indigent claimant little better than to get nothing.”
Further, litigation expenses in workers compensation cases rarely exceed $2,500 to $5,000 (indeed, they are often under $1,000). Relaxed evidence rules allow you to present expert witness testimony, including doctors’ opinions, through written reports instead of courtroom testimony, lowering legal expenses.
Therefore, workers compensation provides an entirely different legal system (read here for a comparison of workers comp and personal injury claims).
Purpose #6: Workers Compensation Spreads the Costs of Occupational Injuries and Illnesses
Another purpose of workers compensation is to charge the costs of industrial accidents and work-related fatalities to industry (businesses).
Businesses can then pass these workers compensation costs to the public as a cost of production.
Therefore, the entire community helps with the effects of workplace accidents and occupational disease.
Purpose #7: Workers Compensation Encourages Safe Work Environments
Although employers are supposed to provide employees with safe working conditions, we understand that some work environments are lax.
Further, we know that workers compensation benefits (especially indemnity benefits such as temporary partial, permanent partial, or temporary total disability) are often inadequate. Indeed, they do not lead to the unjust enrichment of injured employees, as lobbyists for insurers, claim administrators (companies like Sedgwick CMS, Gallagher Bassett, etc.), and businesses often claim.
The limits of workers compensation remedies, combined with the penalties (OSHA citations) and costs (in rising insurance premiums) imposed on employers when an occupational injury occurs, encourage employers and employees to create a safer work environment.
More safety measures mean fewer injuries.
Helping Injured Employees Make Sure Workers Comp Lives Up to Its Purpose
Workers compensation has commendable goals.
However, it does not go far enough to protect injured employees and their families.
Given workers compensation limitations, even if you obtain an Award Order, you must take advantage of all available benefits.
Instead of leaving it to luck or chance, call our workers compensation lawyers at (804) 251-1620 or (757) 810-5614.
We fight for injured employees and their families to ensure workers comp lives up to its purpose.
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