Workers rights laws including workers’ compensation laws were passed to provide a relatively quick and sure remedy for employees hurt on job in the innovative but dangerous employment conditions wrought by the industrial revolution. Employees did not have to prove negligence, just causation. In return, this grand bargain immunized employers from tort liability to employees in almost all contexts. In addition, while worker’s compensation benefits offered medical treatment the wage replacement benefits are limited and there is no noneconomic or pain and suffering compensation.
Workers’ compensation laws were not passed as method to protect employers from the risk of injury claims from employees. In the late nineteenth and early twentieth centuries, employers were well insulated from tort common law personal injury claims by a regiment of defenses including lack of duty, contributory negligence, assumption of risk and exculpatory employment waivers. In 1911, Wisconsin became the first state in the nation to pass a broad, constitutionally valid worker’s compensation law.
Across the country there are legislative efforts afoot to allow employers to “opt out” of the traditional workers’ compensation systems in several states. Generally speaking, opt out laws take government out of the equation and allow employers to determine the nature of the benefits and the terms of the claims administration, including appeal processes. Recently, the Oklahoma Supreme Court ruled that Oklahoma’s opt out law unconstitutional leaving only Texas with an opt out system.
Unlike other states, Texas has always had a voluntary workers compensation system so a comparison to contemporary opt out legislation is not perfect. Generally, in Texas participation in the workers’ compensation system is “voluntary and elective as to both employer and employee.” An employer has three options, 1) be covered under their workers compensation system, 2) not be under workers comp but establish an alternative benefit plan to provide certain benefits for on-the-job injuries at its discretion, or 3) have no coverage in which event it is liable under tort law but has no common law defenses such as contributory negligence, assumption of risk and fellow employee negligence. Note if the employer chose option (1) for coverage, the injured employee can still opt out and sue the employer in tort, however then the employer retains the common law defenses.
Apart from the individual damage incurred by an injured worker, the parsimonious proposed opt out legislation enables employers to effectively shift the cost of paying for work-related injuries to the taxpayer via Medicare, Medicaid and Social Security.
McCormick Law Office in Milwaukee, Wisconsin supports workers compensation law and opposes any efforts to dismantle workers rights laws. Men and women of labor need to protect themselves and vote this November for candidates who support Wisconsin’s proud labor history.
