Category Archives: Workers’ Compensation

Workers’ compensation filings of temporary workers compared to direct hire workers in Illinois, 2007–2012

Source: Dana Madigan, Linda Forst and Lee S. Friedman, American Journal of Industrial Medicine, Early View, November 15, 2016
(subscription required)

From the abstract:
Background: The physical and psychological risks of temporary employment are well documented but there are still many questions regarding the consequences of injuries among these workers.

Methods: This analysis examines Illinois Workers’ Compensation Commission filings from 2007 through 2012 to compare total cost of the decision, days of work missed, and percent disability of employees of temporary agencies with direct hire claims.

Results: Total award median was $5,813.66 for direct hire employees and $2,625.00 for temporary workers. Of those employees claiming time off from work, median total time off was 1.3 weeks for direct hire employees compared to 1.2 weeks for temporary workers. Median total percent disability was 16.0% for direct hire and 10.0% for temporary employees.

Conclusions: There are differences between temporary workers and direct hire employees in terms of total workers’ compensation awards, total time off, and percent disability. Additional studies are needed to validate these findings. Am. J. Ind. Med. © 2016 Wiley Periodicals, Inc.

U.S. Labor Department: States Are Failing Injured Workers

Source: Michael Grabell, ProPublica, October 5, 2016

A new Department of Labor report says cuts to state workers’ comp systems have left injured workers with inadequate benefits and raises the specter of federal oversight. The findings echo those of a ProPublica and NPR investigation last year.
Does The Workers’ Compensation System Fulfill Its Obligations To Injured Workers?
Source: U.S. Department of Labor, October 2016

State-based workers’ compensation programs provide critical support to workers who are injured or made sick by their jobs. These programs are a key component of the country’s social benefit structure and of occupational safety policy, and the only major component of the social safety net with no federal oversight or minimum national standards. This Report provides an introduction to these programs, but it also sounds an alarm: working people are at great risk of falling into poverty as a result of workplace injuries and the failure of state workers’ compensation systems to provide them with adequate benefits.

Despite the sizable cost of workers’ compensation, only a small portion of the overall costs of occupational injury and illness is borne by employers. Costs are instead shifted away from employers, often to workers, their families and communities. Other social benefit systems – including Social Security retirement benefits, Social Security Disability Insurance (SSDI), Medicare, and, most recently, health care provided under the Affordable Care Act – have expanded our social safety net, while the workers’ compensation safety net has been shrinking. There is growing evidence that costs of workplace-related disability are being transferred to other benefit programs, placing additional strains on these programs at a time when they are already under considerable stress.

Workers’ Compensation: Benefits, Coverage, and Costs

Source: Marjorie L. Baldwin and Christopher F. McLaren, National Academy of Social Insurance, October 2016

From the abstract:
Workers’ Compensation: Benefits, Coverage, and Costs is the nineteenth in a series by the National Academy of Social Insurance to provide the only comprehensive national data on this largely state-run program. The study provides estimates of workers’ compensation payments—cash and medical—for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.
press release

Shhh! America’s Most Common Workplace Injury Is Hearing Loss

Source: Zhai Yun Tan, Kaiser Health News, September 9, 2016

….Ammon is not alone in suffering from workplace-related hearing loss. In fact, according to the Centers for Disease Control and Prevention, it is the most common work-related injury with approximately 22 million workers exposed annually to hazardous levels of occupational noise. Workers in the mining sector, followed by those in construction and manufacturing, are most likely to suffer from hearing impairment. An estimated $242 million is spent on worker’s compensation annually for hearing loss disability, according to the Department of Labor….

Workers’ Compensation: Overview and Issues

Source: Scott D. Szymendera, Congressional Research Service, CRS Report, R44580, August 3, 2016

Workers’ compensation provides cash and medical benefits to workers who are injured or become ill in the course of their employment and provides benefits to the survivors of workers killed on the job. Benefits are provided without regard to fault and are the exclusive remedy for workplace injuries, illnesses, and deaths. Nearly all workers in the United States are covered by workers’ compensation. With the exception of federal employees and some small groups of private-sector employees covered by federal law, workers compensation is provided by a network of state programs. In general, employers purchase insurance to provide for workers’ compensation benefits.

Workers’ compensation has been called a grand bargain between employers and workers that developed at the beginning of the 20th century in response to dissatisfaction with the tort system as a method of compensating workers for occupational injuries, illnesses, and deaths. Under this grant bargain, workers’ receive guaranteed, no-fault benefits for injuries, illnesses, and deaths, but forfeit their rights to sue their employers. Employers receive protection from lawsuits but must provide benefits regardless of fault.

Recently, concerns have been raised over what some allege are cuts to state workers’ compensation benefits or policy changes that make it harder for workers to receive the benefits they deserve. These cuts and policy changes may be shifting some of the costs associated with workplace injuries, illnesses, and deaths away from the employer and to the employee or social programs, such as Social Security Disability Insurance (SSDI) and Medicare.

There is no federal requirement that states have workers’ compensation systems and no minimum federal standards for state systems. The decentralized nature of workers’ compensation led to unsuccessful calls for minimum state standards in the early 1970s and has caused concerns over benefit equity among the states today.

In 2013, Oklahoma joined Texas in making its workers’ compensation system noncompulsory. Unlike in Texas, Oklahoma employers may opt-out of workers’ compensation by offering alternative benefits to employees and keep their protection from lawsuits, whereas Texas employers are exposed to legal liability in the event of employee injury when employers opt-out of worker’s compensation. The constitutionality of the Oklahoma system, as well as to what extent the federal Employee Retirement Income Security Act (ERISA) applies to these alternate benefit plans, are currently being adjudicated in the courts.

New Studies of Gig Economy Workers’ Rights

Source: National Employment Law Project, 2016

Three new policy briefs from NELP take a closer look at “gig economy” workers’ rights.

On-Demand Workers Should Be Covered by Workers’ Compensation
Many on-demand companies operate in dangerous industries with high workplace injury and fatality rates. Yet they classify their workers as “independent contractors” and thereby avoid the responsibility of providing workers’ compensation and other employee protections. This practice presents real costs to the workers hired by these companies and shifts the cost of work-related injuries onto the backs of workers and the general public. The job-related dangers to which these workers are exposed makes it critical that they be covered by workers’ comp.

Flexibility and the On-Demand Economy
On-demand companies often tout flexibility as one of the main reasons why people choose to work for them. This brief challenges that premise, however, showing that monetary pressures, peak demand periods, and company-imposed rules and incentives mean workers have much less flexibility than the companies claim. The brief also debunks the assertion that flexibility is incompatible with employee status. 

Ensuring Fairness in Background Checks for On-Demand Work
On-demand companies promote the idea that they provide work opportunities for people in communities with high unemployment. But many of these companies fall short when it comes to complying with the civil rights and consumer laws regulating the use of background checks for employment. Strong protections are needed to ensure that companies use non-discriminatory hiring practices. 

The War on Workers’ Comp

Source: Stephen Franklin, In These Times, Working in These Times blog, June 13, 2016

For nearly a century, millions of workers have endured punishing jobs in construction, mining and factory work—jobs with high levels of work-related disability and injury. As a tradeoff for the dangers, they’ve had the assurance of workers’ compensation if injured permanently on the job. Employers accepted this deal, albeit sometimes grudgingly, because it  removed the possibility of being sued over work-related injuries. 

But as labor has weakened and Republicans have won control of more and more statehouses, states have slowly chipped away at workers’ compensation benefits.

Since just 2003, more than 30 states have passed laws that have “reduced benefits for injured workers, created hurdles for medical care or made it more difficult for workers to qualify,” according to a recent investigative series by ProPublica and NPR. Some of the harshest cuts came in California, Arizona, Florida, Oklahoma, North Dakota, Kansas, Indiana and Tennessee. Today, according to the federal Occupational Safety and Health Administration (OSHA), many injured and disabled workers “never enter the workers’ compensation system.” OSHA also estimates that workers’ compensation covers only about 21 percent of the lost wages and medical bills encountered by injured workers and their families…..

Inequality, Opportunity, and the Law of the Workplace

Source: Stetson Law Review, Volume 45, Issue 1, 2015

On March 6, 2015, the Stetson Law Review hosted a symposium titled “Inequality, Opportunity, and the Law of the Workplace.” The symposium brought together legal academics, economists, attorneys, journalists, and students to explore the relationship between rising economic inequality in the United States and the complex web of federal, state, and local laws that constitute the field of labor and employment law. Following the live symposium, works by many of the panelists and speakers were published in the Stetson Law Review, Volume 45, Issue 1.

Symposium Introduction and Dedication
Jason R. Bent

“Regilding the Gilded Age”: The Labor Question Reemerges
Wilma B. Liebman

….This year, as we celebrate the eightieth anniversary of the passage of the Wagner Act—our nation’s basic law that guarantees workers the right to organize and bargain collectively with their employers-organized labor is, as a percentage of the private sector workforce, at a historic low, steady decline since the 1950s. Workers’ bargaining power is, as a consequence, sharply reduced, and income inequality is at levels not seen since the Gilded Age. I leave it to other speakers on this program to document the nature and extent of present-day wealth and income disparity. I will confine my remarks to outlining the relevance of labor law to this serious challenge, the limits of existing law, and what the future might hold for restoring the promise of labor law……

Can Dystopia be Avoided? Increasing Economic Inequality Can Lead to Disaster
Michael J. Zimmer

….So what can be done to turn back the long-term trend of ever increasing economic inequality? First, it is necessary to realize that “[t]he evolution of inequality is not a natural process.” That the level of economic inequality is a question of politics becomes clear by looking at the United States experience in the period starting with World War II and ending in the early 1980s. While economic inequality was being reduced until the late 1970s, the Reagan Revolution that radically reduced taxes at the high end of the income pyramid also resulted in the reversal of the trend toward less inequality and replaced it with the ever increasing inequality seen since then. No matter how impossible it seems at the moment, new politics could reverse the present trends. That the problem is political does not, of course, make it simple to solve.

Added to the political challenges within any particular country that is active in the globalized economy is the fact that the problem of economic inequality is essentially a worldwide problem, requiring at least a coordinated, if not uniform, response by the major countries….. Finally and perhaps most significantly, the best way to turn around the ever increasing economic inequality would be to turn around the virtually worldwide decline in the union movement or to create a new transnational social movement aimed at using the collective strength of workers to protect and enhance their employment opportunities…..

Florida Workers’ Compensation Act: The Unconstitutional Erosion of the Quid Pro Quo
Viktoryia Johnson

In 1935, Florida passed workers’ compensation legislation that made the quid pro quo justification its central theme. At first, the scheme worked efficiently and furnished injured workers with the benefits it had been designed to deliver. As time passed, however, the workers’ compensation legislation failed to keep up with legal developments and eventually lost its backbone. This Article is designed to expose deficiencies in the Florida workers’ compensation scheme—as they relate to the Florida Workers’ Compensation Act’s “Exclusiveness of Liability” provision—and propose solutions to address them.

Part I of this Article will describe workers’ compensation’s path to recognition in the United States, while Part II will review its adoption in Florida. Part III will overview the 1970 legislative changes that permanently altered the character of the Florida Workers’ Compensation Act (FWCA or the Act) by barring injured workers from recovery in tort and making the Act an exclusive remedy. Part IV will explain how these legislative amendments fail to support the archaic rationale behind the workers’ compensation scheme in light of the recent Florida tort law developments. Part V will review the constitutionality of the FWCA—with a concentration on the right of court access—under the Kluger paradigm. And finally, Part VI of this Article will propose solutions to mend the exposed statutory deficiencies….

How to Raise Wages: Policies that Work and Policies that Don’t
Lawrence Mishel and Ross Eisenbrey

…As this Article explains, wage stagnation is not inevitable. It is the direct result of public policy choices on behalf of those with the most power and wealth that have suppressed wage growth for the vast majority in recent decades. Thus, because wage stagnation was caused by policy, it can be alleviated by policy. In particular, policymakers must address two distinct sets of policies….. One set of policies that has stifled wage growth includes aggregate factors, which have led to excessive unemployment over uch of the last mfour decades, as well as others that have driven the financialization of the economy and excessive executive pay growth. …. Another set of policies concerns the business practices, eroded labor standards, and weakened labor market institutions that have reduced workers’ individual and collective power to bargain for higher wages. ….

Indirect Threats to the Wages of Low-Income Workers: Garnishment and Payday Loans
Steven L. Willborn

……First, let me set the framework. When one talks about “inequality,” one can focus on some workers being paid too little, or others being paid too much. Working on either dimension could reduce inequality. I will focus on the workers-being-paid-too-little side of that equation. When we think of workers being paid “too little,” the discussion normally begins, and sometimes ends, with discussions of how to increase the income that low-income workers earn from their employers. Increases in the minimum wage would be the prime example: if we increase it, low-income workers might receive more income from their employers. When discussing topics such as garnishment and payday loans, the narrative becomes complicated in two main ways. First, we are not talking about the total amount those workers are owed—for example, the number of hours they work times the minimum wage. Rather, we are talking about the amount they actually receive at the end of the day. We are talking about a different kind of threat to the earnings of low-wage workers—not only the direct threat of simply being paid too little, but also the indirect threat of not getting all of those meager wages. To state it somewhat differently, if a worker needs $X/month to survive, she might fail to get there because the minimum wage is too low, or she might fail to get there because—even though the minimum wage is sufficient—the amounts taken out of her check through garnishment will cause her to fall below that amount. The two scenarios are equally problematic for the worker, but the second tends to be less on the radar screen than the first……

The Employment Non-Discrimination Act After Hobby Lobby: Striving for Progress–Not Perfection
Giovanni P. Giarratana

Despite the pervasiveness of discrimination based on sexual orientation and gender identity, federal legislation that explicitly prohibits it does not exist. To combat sexual orientation and gender identity discrimination, the Employment Non-Discrimination Act (ENDA) has been proposed. ENDA, if enacted, would explicitly prohibit discrimination based on “actual or perceived sexual orientation or gender identity.” ….. Some legal scholars assert that ENDA, as it is currently written, includes concerning language that may have the effect of decreasing protection rather than increasing it. One of the more concerning provisions is the religious exemption section, especially in the wake of the Supreme Court’s Hobby Lobby decision in June 2014. ….. As a consequence, many major gay activist groups pulled their support for ENDA because of the religious exemption that is included, asserting that the decision in Hobby Lobby is just “a hop, skip and jump” from allowing employers to discriminate against LGBT individuals because of religious beliefs. …..

Income Inequality and Corporate Structure
Matthew T. Bodie

Efforts to address income inequality generally focus on wealth redistribution through taxation and government benefits. But these efforts do not attack the core problem — the unfair distribution of wealth at the firm level. This essay, a contribution to the “Inequality, Opportunity, and the Law of the Workplace” symposium, argues that workers need power within their firms to stake their claims to larger slices of the corporate pie. Even though the current law of the workplace does provide regulatory support for workers, it fails to change internal firm governance. Policymakers who want to take on income inequality as a structural matter should turn to corporate law and provide workers with a way of playing a role in the ongoing governance of the business.

Rejecting the Grand Bargain: What Happens When Large Companies Opt Out of Workers’ Compensation?

Source: Alison D. Morantz, Stanford Law and Economics Olin Working Paper No. 488, March 18, 2016

From the abstract:
The “grand bargain” of workers’ compensation, whereby workers relinquished the right to sue their employers in exchange for no-fault occupational injury insurance, was one of the great tort reforms of the Twentieth Century. However, there is one U.S. state that has always permitted employers to decline workers’ compensation coverage, and in which many firms (“nonsubscribers”) have chosen to do so: Texas. This study examines the impact of Texas nonsubscription on fifteen large, multistate nonsubscribers that provided their Texas employees with customized occupational injury insurance benefits (“private plans”) in lieu of workers’ compensation coverage between 1998 and 2010. As economic theory would lead one to expect, nonsubscription generated considerable cost savings. My preferred estimates suggest that costs per worker hour fell by about 44 percent. These savings were driven by a drop in the frequency of more serious claims involving replacement of lost wages, and by a decline in costs per claim. Both medical and wage-replacement costs fell substantially. Although the decline in wage-replacement costs was larger in percentage terms than the drop in medical costs, the latter was equally financially consequential since medical costs comprise a larger share of total costs. The second stage, which compares the effect of nonsubscription across different types of injuries, finds that non-traumatic injury claims were more responsive to nonsubscription than traumatic ones. In part, this disparity reflects the fact that private plans categorically exclude some non-traumatic injuries from the scope of coverage. Yet even those non-traumatic injuries that were not excluded from coverage declined more than traumatic injuries, consistent with aggressive claim screening by employers and/or a decline in over-claiming and over-utilization by employees in the nonsubscription environment. The third stage examines the effect of nonsubscription on severe, traumatic injuries, which are generally the least susceptible to reporting bias and moral hazard. The sizable and significant decline in such injuries is consistent with an improvement in real safety, although it could also be explained by aggressive claim screening. The final stage of the study probes whether four ubiquitous features of private plans – non-coverage of permanent partial disabilities, categorical exclusion of many diseases and some non-traumatic injuries, capped benefits, and lack of chiropractic care – explain the observed trends. Surprisingly, these features account for little of the estimated cost savings. Although many study participants describe limited provider choice and 24-hour reporting windows as major cost drivers, data limitations preclude me from identifying their respective impacts. Overall, my findings suggest an urgent need for policymakers to examine the economic and distributional effects of converting workers’ compensation from a cornerstone of the social welfare state into an optional program that exists alongside privately-provided forms of occupational injury insurance.

Portable Benefits and the Gig Economy: A Backgrounder

Source: Adi Kamdar, OnLabor blog, April 8, 2016

The debate surrounding the gig economy has cast light on workers who depend for their livelihood on multiple sources of income.  For example, an Uber driver may also be working for Lyft, and a freelance website designer may have five clients at the same time.  But when classified as contractors, these workers may miss out on employer-provided health benefits, unemployment, worker’s compensation, paid sick days, and more. In a letter titled “Common ground for independent workers,” a group of tech gurus, union leaders, and startup CEOs recently called for a change in how benefits work.  As they argued in the letter: “Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire.”  Their call to action pushes for “flexibility and stability”: the flexibility to work multiple jobs, temporarily or long term, with varying schedules—all while experiencing the stability of a safety net.  Workers’ benefits, they say, shouldn’t be tied to an employer. They should be portable.