The U.S. Dept of Labor’s recent report asks the key question: “Does the Workers’ Compensation System Fulfill its Obligations to Injured Workers?” Although there are notable differences between the American and Canadian systems, the report sounds the alarm on concerns relevant also north of the border:
- working people at great risk of falling into poverty as a result of workplace injuries and the failure of workers’ compensation programs to provide them with adequate benefits
- exclusionary standards resulting in increased denial of claims that might previously have been accepted
- costs shifted away from employers, often to workers, their families, communities, and onto social assistance programs
- transfer of costs lessening the incentive for high-hazard employers to improve workplace safety
The review looks at how state programs measure up in meeting the 19 “essential recommendations” issued by the 1972 National Commission on State Workmen’s Compensation Laws (which focused primarily on benefit inadequacy). The report finds that after some initial progress, a changed political climate in the mid-80s shifted the balance of in many states’ legislatures from improving benefits to controlling employers’ costs. Research suggests the decline in benefits per $100 of payroll from a high of $1.65 in the early 1990s to $0.98 in 2013 is due mainly to statutory changes rather than improved safety or reduced employment in dangerous industries (such as mining).
Legislative changes championed as “reforms”
“Enacting a race to the bottom”, the majority of states have in recent years brought in legislative changes making it harder to qualify, cutting access to benefits and weakening an already fragile safety net, particularly for those workers who are hurt the most – those with permanent injury. These changes have raised administrative and evidentiary barriers to successful claims (including the use of pre-existing conditions to limit eligibility), discouraged reporting, focused on worker behaviour and “fraud”, added restrictions on medical care for workers and significant limitations on benefits. (The report notes that none of the benefit adequacy studies addresses the economic effects of workplace injuries and diseases on injured workers who never receive compensation)
Suggesting policy areas for further exploration, the report calls for a significant change in approach. It highlights the need to identify best practices to provide better benefits, improve access to the wage-replacement workers need until they can return to work, make stronger linkages between workers’ compensation and occupational safety, and address employer costs.
Proposing specific research tropics (p.25-26), the authors suggest additional worker-focused research can provide valuable data and insight on the impact of injury, injured workers’ experiences with the worker’s compensation system and how to improve its functioning.
In the words of the Secretary of Labor Tom Perez
“Our current system – or lack thereof – is a result of choices people made. We have the power to make it work better for working people … A social contract that works for everyone starts with a conversation rooted in our shared values. First, that a workplace injury shouldn’t be a pathway to poverty. Second, that, whenever possible, it is better for workers to get the care and time they need to recover so they can get back to work. Third, thoughtful research and an innovative spirit can find ways to improve care without skyrocketing costs.”
- Spieler, Emily A. 2016 Sep 21. “Work injury and compensation in context, 1900 to 2016” (draft). Presentation at the 2016 Academic Symposium: The Demise of the Grand Bargain, Rutgers Law School, NJ.
- National Academy of Social Insurance. 2016 Oct 5. Workers Compensation: Benefits, Coverage and Costs (19th annual). Washington D.C.: NASI
- Grabell, Michael & Howard Berkes. 2015 Mar 4. “Insult to Injury: The Demolition of Workers’ Comp” (ProPublica / NPR investigation)