28 Nov 2011

Dr. Peter Barth on 100 Years of Workers’ Compensation: Progress and Unmet Goals Mark Centennial

The Workers’ Compensation Research Institute kicked off its November 16-17, 2011 Annual Conference with reviewing the first 100 years of workers’ compensation. Workers’ Compensation guru Dr. Peter Barth provided a Centennial 60 Minutes.

Barth’s presentation had a “Back to the Future” feel and was as entertaining as that film trilogy. He discussed the impetuses for workers’ compensation and important developments during its early years, the state of workers’ compensation at roughly its 50-year mark, and the current environment that included thoughts regarding the road ahead.

Early Years of Workers’ Compensation

Barth succinctly stated that an overall reason for instituting workers’ compensation was that “existing state systems dealing with employer liability were simply unacceptable.” He added that state employer liability laws were diverse and inconsistent and that workers’ compensation was designed to create certainty regarding the rights and responsibilities of employers and employees.

One identified common characteristic of workers’ compensation included little or no federal involvement. Another common characteristic that Barth discussed was basing income benefits on a claimant’s earnings, rather than a means or welfare test.

Barth further identified 1910-1920 as “a critical period for workers’ compensation.” This was due to increasing public awareness of hazardous working conditions that affected large populations of workers. He specified that occupational diseases did not concern workers’ compensation in its early history.

Touching on employer acceptance of the new system, Barth reported that the National Association of Manufacturers supported changing from an employer liability model. He also shared that the American Federation of Labor reversed its initial opposition to workers’ compensation after determining that it was less expensive than the older system.

This discussion of early laws also mentioned the quasi workers’ compensation protection under the Federal Employers’ Liability Act of 1908. This law reflected the intentional tort exception in modern workers’ compensation law by conditioning a right to hold an employer liable for work-related harm on adequate proof that employer negligence sufficiently contributed to the relevant injury.

Barth described New York’s 1910 workers’ compensation law as the first one of that type with “teeth.” He added that the New York subsequently amended its state constitution after a state court decision declared that that law was unconstitutional.

The presentation on the birth of workers’ compensation concluded with discussing that all but eight states had workers’ compensation laws in the early 1900s; Michigan, which enacted a workers’ compensation law in 1947, was the last state to join the club.

The Middle Portion of the First 100 Years of Workers’ Compensation

Barth’s analysis of the period following Michigan joining the workers’ compensation bandwagon discussed the portion of the 1954 Somers and Somers report that identified goals for the workers’ compensation system. As the partial list of these objectives provided below demonstrates, Barth pointed out that these ideals reflected the same principles that prompted replacing an employer liability system with workers’ compensation.

Eliminating “wasteful litigation”
Promoting safety and health activities
Assuring medical services and rehabilitation.

Barth noted that “the early goal of a simple administrative procedure” that lacks any litigation is far from actuality. He added that Somers and Somers and others expressed disappointment that the workers’ compensation system has not eliminated litigation.

Leaping ahead roughly 20 years, Barth subsequently shared thoughts regarding the 1972 report of the National Commission on State Workmen’s Compensation Laws (Commission). His perspective regarding this was particular interesting because he was the Commission’s executive director.

A dual primary objective of the Commission was providing broad workers’ compensation coverage in terms of both the percentage of employees who received that protection and the range of occupational diseases to which that law applied.

Other Commission goals included “interruption of income protection” and “effective delivery of benefits and services.”

Modern Workers’ Compensation

In discussing the current workers’ compensation environment, Barth stated that “on many scores, we’d have to say the world looks a whole lot better than it did in 1911 and even 1971.” He added less optimistically that, as shown below, room for improvement definitely existed.

This exam of the current state of workers’ compensation additionally noted the frequency of changes to workers’ compensation law. Barth observed that the degree of such changes varied among states but that California tended to frequently change its workers’ compensation laws.

Additional aspects of the evolution of workers’ compensation since 1911 included covering occupational diseases, which is a development that Barth has studied extensively, and active state administration. Barth additionally praised advancements regarding providing temporary disability benefits.

The scope of employees that the workers’ compensation system covered was one area that Barth identified as not meeting goals that the Commission and/or Somers and Somers advocated.

Barth observed that agricultural employees in many states were entirely or largely excluded from the workers’ compensation system. He stated too that “coverage is inadequate for independent contractors who are otherwise employees.”

Barth additionally expressed that “benefits for survivors really are not very good; they have not been for a long time.” He noted that criticisms related to malingering regarding injured workers did not apply to people who qualified for survivor benefits.

Barth said as well that he was unsure of the extent to which workers’ compensation had met its goal of increasing workplace safety. He speculated that creating OSHA “may have simply eliminated the need for workers’ compensation to cover safety.”

Return-to-work programs was another troublesome area. Barth observed that it was uncertain who was responsible for getting claimants back on the job, and he specified that that duty did not necessarily fall on the employer or the workers’ compensation insurer.

Barth did share that states have recently improved their systems for maintaining re-employment statistics. He added that California has been particularly good regarding this.

100 Years in 100 Words or Less

One theme on which Barth focused was that he had hoped that litigation would not have been an element in the workers’ compensation system 100 years after transitioning from a system based on employer liability. He opined as well that employers have fared better under workers’ compensation than the old systems and that employees have experienced “mixed results.”

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Celebrating 60 Years of Larson's Workers' Compensation Law