Workers' Compensation Committee

Workers' Compensation Committee
7 min read
28 January 2023

In the West, workers' compensation grew out of labor movements and has its roots in early European commercial corporations. The core of workers compensation is to replace income and provide medical coverage when the worker is injured on the job or falls ill as a result of the nature of the job. In recorded history, recognition of workers' rights had existed since the Middle Ages, as exemplified by the Peasants' Revolt in England in the fourteenth century, which was precipitated by economic hardship consequent upon the Black Death and high taxation. Though illegal at the time, notions of collective bargaining and unions were brewing and occasionally erupting as Luddite revolts during the Industrial Revolution in the 18th century. Greater cohesion had to wait until the 19th century to begin, moment when the socialist ideas of Karl Marx began to take hold. In the early 20th century, workers' rights were enshrined in the International Labor Organization, which was later incorporated into the United Nations.

Common law obliges the employer to provide a safe working environment, safe tools and adequate assistance so as not to overwork the worker. Currently, the workers' compensation board is a type of insurance that balances the rights of workers and employers. Specifically, the worker receives benefits, usually salary replacement and medical expenses, in exchange for waiving the right to sue the employer for negligence, regardless of fault. Ideally, claims are adjudicated by an impartial workers' compensation board that is financially independent and unaffiliated with special interest groups.

Today, a workers' compensation board encompasses workers' safety in general and is present in most countries of the developed world in different formats. In some countries, such as Japan and Brazil, the government assumes the functions of a workers' compensation board. In Brazil, an independent workers' compensation board is replaced by the government-run Instituto Nacional de Seguro Social, which is a general social insurance covering all standard benefits plus unemployment insurance and health benefits. The system is financed by contributions from self-employed workers, employees and employers according to a defined schedule. As for Japan,

The German system, the Workers Compensation Institute, has become a prototype for other European countries and is funded through employers with the government contributing on behalf of certain classes of individuals, such as students. Self-employed individuals can opt into voluntary contributions insurance. Germany enjoys a return to work rate of 90%; However, weekly wage replacement and full medical benefits may continue until the individual becomes eligible for Old Age Security. The success of Germany's workers' insurance may be due to the fact that it is paired with solid retraining and updating of vocational skills programs.

Brazil, Japan, and Germany are examples of workers' compensation that focus on insurance. The United States, which is more litigious globally, has retained its focus on employer protection. Each state has a board that oversees the operations of public and private rights that provide workers' compensation. Individual states argued that requiring employers not to purchase any at-fault workers' compensation insurance was a violation of employers' recourse to due process of law. In 1917, the United States Supreme Court ruled that employer legal actions could proceed in the presence of mandatory workers' compensation legislation.

In most states, employees will receive medical benefits for work-related injuries and illnesses. However, if employers opt out of the insurance plan, and if an employee can prove negligence, an employee can sue and receive compensation that exceeds the benefits provided by workers' compensation. Employers who did not subscribe reported greater employee satisfaction with their compensation and lower costs related to providing compensation. That said, under-reporting of work-related injuries continues to be an issue in the United States. Employees fear that their employers might retaliate if the employee reports an injury on the job and make out-of-pocket payments from their medical bills or rely on private or public health insurance plans. Anyway, the result is negative for both the employee and the health insurer. Most workers' compensation disputes are now referred from the trial system to administrative agencies and are resolved informally.

Similar to the United States, the United Kingdom has placed a focus on employer protection. There is no workers' compensation board per se and all work-related health matters are governed by the Health and Safety Executive. Except for civil servants, all are covered by their employers' mandatory employers' liability insurance. An employee must prove that the employer is legally obligated to pay compensation to receive benefits. By the end of the 19th century, the law revised the employee's obligation to prove only that the injury or illness happened on the job.

For socialist countries like Sweden, 90% of workers are covered by collective agreements and little regulation is applied to employers. The result is a balanced autonomy ideal for free negotiation on both sides. The Workers' Compensation Board is a mandatory national program that is closely tied to the national security program. Employees who are not covered by no-fault insurance can sue an employer for compensation. However, given the high enrollment rate in workers' national insurance, this course is rarely taken.

In other parts of the world, there is no workers' compensation board, or legislation relating to workers' compensation entitlements is applied unevenly. Workers in rapidly evolving economies such as India and China are particularly at risk as industries are largely unregulated and health insurance generally only provides coverage for hospital care. In fact, for most of the world's workers, disability or injury can result in catastrophic medical bills and a descent into poverty for the family.

In summary, despite the good intentions of the International Labor Organization there is no global standard regarding a workers' compensation board. The concept of workers' compensation emerged from workers' coalitions and eventually became legislation that sought to strike a balance between workers' and employers' rights. How the concept evolved in each country depended on the extent to which workers were able to organize and the degree to which the government supported workers.

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