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Workers Compensation Historical Background

How Workers Compensation Began

Most states enacted workers’ compensation systems in the early 1900′s. Before enactment, employees injured while working were compensated based on fault. If the employee could prove in a court of law that the employer purposefully or negligently caused their injuries, they would be compensated. Compensation would be in the form of cash for permanent injury, pain and suffering and loss of earnings. An employee successful in proving the employer negligent could be awarded a significant monetary recovery.

If the employee was unsuccessful in proving employer negligence, they would receive no recovery. Many injured employees found themselves in this situation simply because the employer had successfully asserted any of a number of defenses. These defenses included arguments that the injured employee was equally negligent or that a fellow employee was negligent, or that the employee understood the risks of the job and voluntarily assumed those risks. Despite permanent and disabling injuries, if the employer was successful in asserting these defenses the employee was completely barred from any monetary recovery.

Even if the employee was successful at proving the employer negligent, the fault system was far from efficient. Employers would often use the litigation system to prolong and wear down an injured employee. This often led to inadequate recoveries.

However, on the rare occasion when the injured employee was willing to endure the delays and was eventually successful, many argued that some of these injured employees were grossly over compensated.

These injustices spawned social and political pressure which eventually resulted in enactment of workers’ compensation laws. The basic premise of the workers’ compensation law is that fault of the employer is removed as a basis for recovery. An employee injured while in the course and scope of employment is compensated regardless of fault. However, the amount of compensation is limited.

Employees are restricted from receiving compensation for pain and suffering. As a result, all injured employees are compensated for their injuries, albeit a limited compensation.

As is the case in most bodies of law, the original laws were very simple. They provided a guaranteed payment for medical care, loss of income and death benefits. Over the years, additional laws, rules and regulations have been added.