Workers' compensation
Workers' compensation is a type of insurance designed to aid employees who suffer injuries or illnesses as a result of their job. It covers medical expenses and provides a portion of lost wages, including benefits for dependents in the event of an employee's death due to work-related causes. The concept dates back to ancient civilizations, with documented systems for compensating injured workers appearing as early as the third century BCE. Modern workers' compensation began to take shape in the 19th century, gaining traction across Europe and the United States by the mid-20th century, largely due to growing public awareness and legislative efforts aimed at protecting employees.
In the U.S., workers' compensation laws vary by state, determining how benefits are calculated and what injuries or illnesses qualify for coverage. Typically, these laws prevent employees from suing their employers for workplace injuries in exchange for guaranteed compensation. Coverage generally extends to incidents occurring during the course of employment, including travel for work or situations involving workplace violence. Some states also recognize mental health issues, such as PTSD, as compensable conditions, acknowledging that certain jobs may lead to psychological distress. Overall, workers' compensation aims to ensure that employees receive necessary support while also protecting employers from potential lawsuits.
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Workers' compensation
Workers' compensationis a form of insurance that covers medical bills and a portion of lost wages for an employee who becomes injured or ill due to a work-related cause. It also provides benefits in cases where an employee dies because of an illness or injury caused on the job. Some ancient civilizations had forms of workers' compensation, so the concept is not new. Countries in Asia and Europe began adopting forms on workers' compensation in the nineteenth century, and most American states had adopted laws requiring employers to provide such coverage by the middle of the twentieth century. In addition to protecting employees who become injured or ill because of their jobs, most workers' compensation laws protect employers from lawsuits. Employees who accept workers' compensation benefits are generally prohibited from suing their employers over illness or injury.
Background
There is documented evidence of payments for workers' injuries as far back as the third century BCE. An ancient Sumerian tablet from the kingdom of Ur mentions payments for specific injuries suffered by people in the course of their jobs. The tablet dates to the year 2050 BCE. Similar provisions are found in the 1750 BCE Code of Hammurabi and in many ancient laws of Roman, Greek, Chinese, and Arab civilizations. The focus of these laws was often to compensate workers who lost their ability to work or lost the function of a body part due to injury.
In the Middle Ages, when many in Europe were working for a feudal lord, there was an understanding that people injured in the course of their job should receive some compensation for work-related injuries. However, with most citizens living under the governance of a feudal lord, the amount of compensation—if there was any compensation at all—was often at the whim of the lord. This began to change with the development of common law near the end of the Middle Ages as governments became more centralized and laws became standardized.
Those who lived in non-European cultures often had different laws pertaining to compensation for injured workers, and some specialized agreements arose in various communities. For instance, the pirates of the seventeenth and eighteenth centuries had their own code of compensation for those who were injured. Losing a limb, an eye, or an ear in service to the ship and captain was rewarded as a way of maintaining loyalty even in dangerous situations.
The compensation systems developed by ancient civilizations, feudal lords, and pirates were sometimes more fair and generous than those that developed in Europe and America during the Industrial Age in the eighteenth and nineteenth centuries. As employers increasingly became larger companies instead of smaller family operations, the emphasis was often on profit over relationships with and consideration for employees. Three specific rules were developed that often prevented an employee from receiving any compensation. These were contributory negligence, the "fellow servant" rule, and the "assumption of risk" rule.
Contributory negligence stated that the company was not liable if an action of the employee contributed to the accident, even if the injury itself resulted from dangerous equipment or some other hazard under the control of the employer. The fellow servant rule exempted the company from liability if another employee contributed to the injury; for example, if one employee spilled something that caused another to slip and become injured, the company was not liable. The assumption of risk was related to the idea that employees understood there were inherent risks when they took the job. Even if faulty equipment caused an employee to lose a limb, the company was not responsible.
Overview
Concern about the inadequacy of the existing laws for compensation led to new legislation in many countries during the nineteenth and twentieth centuries. As the public became aware of the many ways companies dodged compensating injured workers, pressure increased on lawmakers to pass legislation to protect employees. In the United States, two incidents helped move the process forward.
The first was an article written in 1909 by US president Theodore Roosevelt about a young woman who lost her hand in a factory accident. Even though the woman had alerted her supervisor to the danger of the machine that crushed her hand, the courts used the assumption of risk rule to exonerate the company. The second incident that helped promote workers' compensation legislation was a deadly fire in 1911 at the Triangle Shirtwaist factory in New York City. More than 140 workers died when they were trapped in a building with inadequate exit routes. Still, the company was found not guilty of negligence, and the families had to bring civil suits to recover damages.
These instances and others spurred legislators to action. Within two years of the fire, New York State had approved workers' compensation legislation. More states followed so that all the states in the union had laws related to workers' compensation on the books by 1948. In 1970, Congress passed the Occupational Safety and Health Act (OSHA), which established federal guidelines for employee safety but left the matter of workers' compensation up to each individual state.
As a result, workers' compensation laws differ from state to state. They are sometimes changed by court action related to a specific case. Each state determines what businesses are required to provide workers' compensation; what illnesses, injuries, and impairments are covered and how they will be evaluated; how medical care will be provided for work-related conditions; how claims are processed; what insurers can be involved in the process; and how disputes are resolved. The laws also define the benefits that will be paid for lost wages, medical care, loss of function, and death.
In general, workers' compensation is provided for illnesses or injuries directly related to person's employment, even if the employee is not physically on the employer's property at the time. This means it generally covers accidents that occur while an employee is using the employer's equipment or driving a company car, but not those that occur traveling to or from work. It also provides coverage for situations such as injuries sustained during a natural disaster, terrorist attack, or other outbreak of violence that occurs while the employee is engaged in employment activities. In many cases, employees who become ill because of their work are also entitled to certain benefits.
Some states also offer workers' compensation for mental health and work-related post-traumatic stress disorder (PTSD). These states recognize that some occupations expose workers to situations that may negatively impact their mental health. First responders, for example, who are exposed to deceased individuals may experience negative mental health side effects. Generally, states offering such compensation recognize certain qualifying events and state that a qualifying event must be a substantial influence in causing the injury as opposed to a disciplinary action, work evaluation, job transfer, layoff, termination, retirement, or other similar action.
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