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(c) 2014 Jon L Gelman, All Rights Reserved.

Thursday, July 25, 2013

“Opting Out” of Worker’s Compensation Hurts Workers and Employers (Part 1)

Today's post comes from guest author Tom Domer from The Domer Law Firm.

More than a century ago, Wisconsin’s initial efforts in worker’s compensation led the nation. In 1911 Wisconsin became the first state in the nation to place a broad constitutionally valid worker’s compensation system into operation.

Recent events, specifically Oklahoma’s passing legislation to allow employers to “opt out” of worker’s compensation (following the “lead” of Texas) calls into question the great bargain made between employers and workers over a century ago. Prior to the enactment of worker’s compensation in the early 20th Century, workers who were injured on the job had to overcome three common law obstacles in order to recover from their employer.

Under contributory negligence, a worker could not recover from the employer if the worker had been negligent in any way and that negligence contributed to the accident, regardless of how negligent the employer may have been.

Under assumption of risk, if a worker knew or should have known of the danger inherent in the task at issue before undertaking it, the employer was not liable for an accident arising from the task even if the employee was not negligent.

Under the fellow servant rule, employers could not be held liable for accidents caused by fellow employees.

The combined effect of these common law defenses served to deny
workers adequate remedies for their injuries. On the flip side, employers who were found negligent in causing workers’ injuries were subject to the vagaries of a jury with no limitation on dollar amount recoveries. Wisconsin’s initial attempt at worker’s compensation contained an “opt out” provision, not unlike the “opt out” provisions currently in vogue in Texas and Oklahoma. 

Within a few years, however, in 1913, spurred by slow employer acceptance of the law, the legislature provided that any employer who did not explicitly opt out of the law would be presumed to have accepted it. In 1919 Wisconsin’s law was extended to cover all employment related injuries whether accidental or not, including occupational exposure claims. Finally in 1931 when worker’s compensation had become a universally accepted part of Wisconsin industrial life, the law was made compulsory for virtually all employers and employees.
Wisconsin’s act is dynamic, reflecting changing trends in employment (temporary help agencies, independent contractors, etc.) and changes in medical treatment, diagnosis, and surgical procedures (for example artificial disc replacement and joint replacements).
Wisconsin’s act is dynamic, reflecting changing trends in employment (temporary help agencies, independent contractors, etc.) and changes in medical treatment, diagnosis, and surgical procedures (for example artificial disc replacement and joint replacements). Proposed provisions to the Act from the worker’s compensation Department and from labor and management sources are funneled through the Worker’s Compensation Advisory Council, which (after significant debate) proposes an agreed upon bill to the legislature every two years.  Input to the Council from lawyers, doctors, employers, and insurers on current issues in worker’s compensation makes Wisconsin’s Act responsive to its constituents.

Unfortunately other constituents (like those in Texas and Oklahoma) based primarily on a short sighted and single minded desire to reduce costs for businesses, have passed legislation allowing employers to opt out of worker’s compensation, often with some disastrous results.
Come back next week for Part 2, a closer examination of the worker's compensation systems in Texas and Oklahoma and how they can effect worker safety.

Read more about "opt-out" programs and workers' compensation:
May 07, 2013
The bill, by Senate President Pro Tem Brian Bingman and House Speaker T.W. Shannon, seeks to reduce costs for businesses by providing for an opt-out of the program. It moves the state from a court-based workers' ...
May 31, 2013
Recent events, specifically Oklahoma's passing legislation to allow employers to “opt out” of worker's compensation (following the “lead” of Texas) calls into question the great bargain made between employers and workers ...
Jun 05, 2013
A recently published report by the New Street Group, sponsored by Sedgwick calls for the intervention of state regulation over workers' compensation opt-out plans. Recognizing the gray line between State and Federal ...
Jun 03, 2013
The Electronic Privacy Information Center, or EPIC, filed a lawsuit against the Department of Homeland Security to establish that all air travelers have the right to opt out of airport body scanners. In additional to the privacy ...