A History of Workers' Compensation

At that time if an employee was injured at work the only recourse that they had was to sue the employer if the it failed to meet one or more of its basic common-law obligations. All that the employer had to do was to provide a safe work place with safety rules in place and to warn employees of any work-related dangers of which they could not reasonably be expected to be aware of.

Employees had difficulty winning suits as common law defences emerged that the employee assumed a degree of risk by accepting the job in the first place and that the employer had no responsibility for the actions of other employees. There were no provisions for employees killed at work, as their dependants did not have the right to sue the employer for damages. By the latter part of the nineteenth century it was clear that the system was not working as many workers and their families were being left destitute due to their inability to bring suits for negligence against employers.

Due to public pressure many states amended the concept of the defence of contributory negligence to comparative negligence so that employees could be held to be only partially negligent and receive a reduced award. Also the defence of fellow employee negligence was modified in many jurisdictions to become a non-delegable duty if the employee responsible for the injury was guilty of avoiding the responsibility given to them by the employer for avoiding accidents.

Around the turn of the century many states started to bring legislation into place which allowed descendants of deceased employees to bring action against the employer, although awards were purely based on the financial loss from loss of earnings and no awards were available for pain and suffering. These changes were undoubtedly an improvement yet the process of accessing the courts for compensation was proving costly and time-consuming. The effect of this was that many employees could not afford to bring suit and that there was normally a significant time lag before any benefit was paid, during which an injured workers family would be left without an income.

The answer to the problem came from a new law that was very different from the common-law approach in that it was a no-fault law. As long as the worker's compensation law covered an employee's job, the employer, regardless of who had been negligent compensated the employee. However in exchange for the automatic compensation the employee gave up the right to bring a suit against the employer for compensatory damages.

At the beginning of the twentieth century various states attempted to pass similar laws but it was not until 1911 in Wisconsin that one was deemed to be constitutional, the others having failed on the grounds that they deprived the employer of the due process of law. The difference with the Wisconsin law was that the employer had the option to reject the workers compensation law but by doing so they lost the three common law defences. Rather than run the risk of having to face negligence suits without these defences it was not surprising that the vast majority of employers elected to accept the workers compensation law.

By 1934, all states had passed workers compensation laws and as a result of these laws most workers can today go about their activities safe in the knowledge that should they be injured they and their families will receive workers compensation benefits which employers are required to provide by law.