workers' compensation
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Workers' compensation or workers' comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the
tort A tort, in common law In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in written opinions. ' is the most-used legal dict ...

tort
of
negligence Negligence (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort A tort, in common law In law, common law (also known as judicial ...

negligence
. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain". One of the problems that the compensation bargain solved is the problem of employers becoming insolvent as a result of high damage awards. The system of collective liability was created to prevent that, and thus to ensure security of compensation to the workers. While plans differ among jurisdictions,
provision Provision may refer to: * Provision (accounting), a term for liability in accounting * Provision (contracting), a term for a procurement condition * Provision (album), ''Provision'' (album), an album by Scritti Politti See also

* Provisioning ...
can be made for weekly payments in place of wages (functioning in this case as a form of
disability insurance Disability Insurance, often called DI or disability income insurance, or income protection, is a form of insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the ident ...
), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of
health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, ev ...
), and benefits payable to the dependents of workers killed during employment. General damage for
pain and suffering Pain and suffering is the legal term for the physical and emotional Stress (medicine), stress caused from an injury (see also pain and suffering). Some damages that might come under this category would be: aches, temporary and permanent limitat ...
, and
punitive damages Punitive damages, or exemplary damages, are damages At common law In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in writt ...
for employer negligence, are generally not available in workers' compensation plans, and negligence is generally not an issue in the case.


Origin and international comparison

Laws regarding workers compensation vary by country, but the Workers' Accident Insurance system put into place by Prussian Chancellor
Otto von Bismarck Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (german: Otto Fürst von Bismarck, Graf von Bismarck-Schönhausen, Herzog zu Lauenburg ; 1 April 1815 – 30 July 1898), born Otto Eduard Leopold von Bismarck, was a c ...

Otto von Bismarck
in 1884 with the start of Workers' Accident Laws, is often cited as a model for the rest of Europe and later the United States. After the early Prussian experiments, the development of compensation laws around the world were in important respects the result of transnational networks among policymakers and social scientists. Thus while different countries have its own unique history of workers' compensation, compensation laws developed around the world as a global phenomenon, with each country's deliberation on compensation laws being informed by deliberation in other countries.


Statutory no-fault compensation

Workers' compensation statutes are intended to eliminate the need for litigation and the limitations of common law remedies by having employees give up the potential for pain- and suffering-related awards, in exchange for not being required to prove
tort A tort, in common law In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in written opinions. ' is the most-used legal dict ...

tort
(legal fault) on the part of their employer. The laws provide employees with monetary awards to cover loss of wages directly related to the accident as well as to compensate for permanent physical impairments and medical expenses. The laws also provide benefits for dependents of those workers who are killed in work-related accidents or illnesses. Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents. In the United States, state statutes establish this framework for most employment, while federal statutes are limited to federal employees or to workers employed in some significant aspect of interstate commerce. The exclusive remedy provision states that workers compensation is the sole remedy available to injured workers, thus preventing employees from also making tort liability claims against their employers.


Common law remedies

In common law nations, the system was motivated by an "unholy trinity" of tort defenses available to employers, including contributory negligence, assumption of risk, and the fellow servant rule. Common law imposes obligations on employers to provide a safe workplace, provide safe tools, give warnings of dangers, provide adequate co-worker assistance (fit, trained, suitable "fellow servants") so that the worker is not overburdened, and promulgate and enforce safe work rules.J. Hood, B. Hardy, and L. Simpson. ''Workers' Compensation and Employee Protection Laws'' (St. Paul: West Academic Publishing, 2017). Claims under the common law for worker injury are limited by three defenses afforded employers: * The Fellow Servant Doctrine is that employer can be held harmless to the extent that injury was caused in whole or in part by a peer of the injured worker. *Contributory negligence allows an employer to be held harmless to the extent that the injured employee failed to use adequate precautions required by ordinary prudence. *Assumption of risk allows an employer to be held harmless to the extent the injured employee voluntarily accepted the risks associated with the work.


By nation


Australia

As Australia experienced a relatively influential
labour movement The labour movement or labor movement consists of two main wings: the trade union movement (British English British English (BrE) is the standard dialect A standard language (also standard variety, standard dialect, and standard) is a l ...
in the late 19th and early 20th century, statutory compensation was implemented very early in Australia. Each territory has its own legislation and its own governing body. A typical example is Work Safe Victoria, which manages Victoria's workplace safety system. Its responsibilities include helping employees avoid workplace injuries occurring, enforcement of Victoria's occupational and safety laws, provision of reasonably priced workplace injury insurance for employers, assisting injured workers back into the workforce, and managing the workers' compensation scheme by ensuring the prompt delivery of appropriate services and adopting prudent financial practices. Compensation law in New South Wales has recently (2013) been overhauled by the state government. In a push to speed up the process of claims and to reduce the amount of claims, a threshold of 11% WPI (whole person impairment) was implemented for physical injuries and 15% for psychiatric injuries Workers' compensation regulators for each of the states and territories are as follows: * Australian Capital Territory – Work Safe Act * New South Wales – State Insurance Regulatory Authority (formerly WorkCover NSW) * Northern Territory – NT Work Safe * Queensland – The Workers' Compensation Regulator (formerly Q-COMP) * South Australia – ReturnToWork SA (from 1 July 2015) * Tasmania – WorkCover Tasmania * Victoria – WorkSafe Victoria * Western Australia – WorkCover WA Every employer must comply with the state, territory or commonwealth legislation, as listed below, which applies to them: * Federal legislation – Safety, Rehabilitation and Compensation Act 1988 *New South Wales –
Workers Compensation Act 1987 In New South Wales, Australia, New South Wales (NSW), Australia Workers' compensation, workers compensation is governed by the Workers Compensation Act 1987.Workplace Injury Management and Workers Compensation Act 1998 *Northern Territory – Work Health and Safety (National Uniform Legislation) Regulations *Australian Capital Territory – Workers Compensation Act 1951 *Queensland – Workers Compensation and Rehabilitation Act 2003 *South Australia – Workers Rehabilitation and Compensation Act 1986 *Tasmania – Workers Rehabilitation and Compensation Act 1988 *Victoria – Workplace Injury Rehabilitation and Compensation Act 2013 *Western Australia – Workers Compensation and Injury Management Act 1981


Brazil

The National Social Insurance Institute (in Portuguese, – INSS) provides insurance for those who contribute. It is a public institution that aims to recognize and grant rights to its policyholders. The amount transferred by the INSS is used to replace the income of the worker taxpayer, when he or she loses the ability to work, due to sickness, disability, age, death,
involuntary unemployment Involuntary unemployment occurs when a person is unemployed Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employme ...

involuntary unemployment
, or even pregnancy and imprisonment. During the first 15 days the worker's salary is paid by the employer and after that by the INSS, as long as the inability to work lasts. Although the worker's income is guaranteed by the INSS, the employer is still responsible for any loss of working capacity, temporary or permanent, when found negligent or when its economic activity involves risk of accidents or developing labour related diseases.


Canada

Workers' compensation was Canada's first social program to be introduced as it was favoured by both workers' groups and employers hoping to avoid lawsuits. The system arose after an inquiry by Ontario Chief Justice who outlined a system in which workers were to be compensated for workplace injuries, but must give up their right to sue their employers. It was introduced in the various provinces at different dates. Ontario and Nova Scotia was first and second in 1915, Manitoba in 1916, British Columbia in 1917, Alberta and New Brunswick in 1918, Saskatchewan adopted in 1930. It remains a provincial responsibility and thus the rules vary from province to province. In some provinces, such as Ontario's
Workplace Safety and Insurance Board The Workplace Safety and Insurance Board (WSIB; french: Commission de la sécurité professionnelle et de l'assurance contre les accidents du travail, CSPAAT) is the workplace compensation board for provincially regulated workplaces in Ontario ...
, the program also has a preventative role ensuring workplace safety. In British Columbia, the occupational health and safety mandate (including the powers to make regulation, inspect and assess administrative penalties) is legislatively assigned to the Workers' Compensation Board of British Columbia WorkSafeBC. In most provinces the workers' compensation board or commission remains concerned solely with insurance. The workers' compensation insurance system in every province is funded by employers based on their payroll, industry sector and history of injuries (or lack thereof) in their workplace (usually referred to as "experience rating").


Germany

The German worker's compensation law of 6 July 1884, initiated by Chancellor
Otto von Bismarck Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (german: Otto Fürst von Bismarck, Graf von Bismarck-Schönhausen, Herzog zu Lauenburg ; 1 April 1815 – 30 July 1898), born Otto Eduard Leopold von Bismarck, was a c ...

Otto von Bismarck
,Holborn, Hajo: ''A History of Modern Germany – 1840–1945'':
Princeton University Press Princeton University Press is an independent publisher Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creatio ...

Princeton University Press
; 1969; pp. 291–93.
was passed only after three attempts and was the first of its kind in the world. Similar laws passed in Austria in 1887, Norway in 1894, and Finland in 1895. The law paid indemnity to all private wage earners and apprentices, including those who work in the agricultural and horticultural sectors and marine industries, family helpers and students with work-related injuries, for up to 13 weeks. Workers who are totally disabled get continued benefits at 67 percent after 13 weeks, paid by the accident funds, financed entirely by employers. The German compensation system has been taken as a model for many nations.


India

The Workmen's Compensation Act 1923http://labour.gov.in/sites/default/files/TheWorkmenAct1923(1).pdf was introduced on 5 March 1923. It includes Employer's liability compensation, amount of compensation. Workmen Compensation Insurance covers employees under Workmen Compensation Act, Fatal Accident Act and common law.


Italy

In Italy workers' compensation insurance is mandatory and is provided by
INAILThe Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro or INAIL ('National Institute for Insurance against Accidents at Work') is an Italy, Italian statutory corporation overseen by the Ministry of Labour and Social Policies (Ital ...
.


Japan

Workers' accident compensation insurance is paired with
unemployment insurance Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to unemployed Unemployment, according to the OECD (Organisation for Ec ...
and referred to collectively as labour insurance. Workers' accident compensation insurance is managed by the
Labor Standards Office Labour or labor may refer to: * Childbirth Childbirth, also known as labour or delivery, is the ending of pregnancy where one or more babies leaves the uterus by passing through the vagina or by Caesarean section. In 2015, there were about 13 ...
.


Malaysia

The Workmen's Compensation Act 1952 is modelled on the United Kingdom's
Workmen's Compensation Act 1906The Workmen's Compensation Act 1906 was an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the Parliamentary sovereignty in the United Kingdom, supreme Legislature, legislative body of the United Kingdom, th ...
. Adopted before Malaysia's independence from the UK, it is now used only by non-Malaysian workers, since citizens are covered by the national social security scheme.


Mexico

The Mexican Constitution of 1917 defined the obligation of employers to pay for illnesses or accidents related to the workplace. It also defined social security as the institution to administer the right of workers, but only until 1943 was the
Mexican Social Security Institute The Mexican Institute of Social Security ( es, Instituto Mexicano del Seguro Social, IMSS) is a governmental organization that assists public health Public health has been defined as "the science and art of Preventive healthcare, preventing d ...
created (IMSS). Since then, IMSS manages the Work Risks Insurance in a vertically integrated fashion: registration of workers and firms, collection, classification of risks and events, and medical and rehabilitation services. A reform in 1997 defined that contributions are related to the experience of each employer. Public sector workers are covered by social security agencies with corporate and operative structures similar to those of IMSS.


New Zealand

In
New Zealand New Zealand ( mi, Aotearoa ''Aotearoa'' (; commonly pronounced by English English usually refers to: * English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon Engl ...

New Zealand
, all companies that employ staff and in some cases others, must pay a levy to the
Accident Compensation Corporation The Accident Compensation Corporation (ACC) ( mi, Te Kaporeihana Āwhina Hunga Whara) is the New Zealand New Zealand ( mi, Aotearoa ''Aotearoa'' (; commonly pronounced by English English usually refers to: * English language ...
, a
Crown entity A Crown entity (from the Commonwealth term ''The Crown, Crown'') is an organisation that forms part of New Zealand's public sector organisations in New Zealand, state sector established under the Crown Entities Act 2004, a unique umbrella governance ...
, which administers New Zealand's universal no-fault accidental injury scheme. The scheme provides financial compensation and support to citizens, residents, and temporary visitors who have suffered personal injuries.


United Kingdom

Great Britain followed the German model.
Joseph Chamberlain Joseph Chamberlain (8 July 1836 – 2 July 1914) was a British statesman who was first a radical Liberal Liberal or liberalism may refer to: Politics *a supporter of liberalism, a political and moral philosophy **Liberalism by country *an a ...

Joseph Chamberlain
, leader of the Liberal Unionist party and coalition with the Conservatives, designed a plan that was enacted under the Salisbury government in 1897. the
Workmen's Compensation Act 1897The Workmen's Compensation Act 1897 was British law in operation from 1897 to 1946. Great Britain followed the German model. Joseph Chamberlain Joseph Chamberlain (8 July 1836 – 2 July 1914) was a British statesman who was first a radical Liber ...
was a key domestic achievement. It served its social purpose at no cost to the government, since compensation was paid for by insurance which employers were required to take out. The system operated from 1897 to 1946. It was expanded to include industrial diseases by the
Workmen's Compensation Act 1906The Workmen's Compensation Act 1906 was an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the Parliamentary sovereignty in the United Kingdom, supreme Legislature, legislative body of the United Kingdom, th ...
and replaced by a state compensation scheme under the
National Insurance (Industrial Injuries) Act 1946 The National Insurance (Industrial Injuries) Act 1946 was a British Act of Parliament which provided compensation paid by the Ministry of National Insurance to workers who were left injured or disabled as a result of work-related accidents. The Act ...
. Since 1976, this state scheme has been set out in the UK's Social Security Acts. Work related safety issues in the UK are supervised by the
Health and Safety Executive The Health and Safety Executive (HSE) is a UK government agency responsible for the encouragement, regulation and enforcement of workplace health, safety and welfare, and for research into occupational risk In simple terms, risk is the possib ...
(HSE) who provide the framework by which employers and employees are able to comply with statutory rules and regulations. Employer duties enforced by the HSE include protecting the health and safety of workers at workplace, risk assessment and training of workers. If an employer fails to fulfil these responsibilities, resulting in injury to an employee, then the employee has a legal right to make a workers' compensation claim against the employer and to sue their employer. With the exception of the following, all employers are obliged to purchase compulsory Employer's Liability Insurance in accordance with the Employer's Liability (Compulsory Insurance) Act 1969. The current minimum limit of indemnity required is £5,000,000 per occurrence. Market practice is to usually provide a minimum £10,000,000 with inner limits to £5,000,000 for certain risks, e.g. workers on oil rigs and acts of terrorism. These employers do not require Employer's Liability Insurance: * local authorities (other than parish councils) * joint boards or committees whose members include members of local authorities * police authorities * nationalised industries or their subsidiaries * certain bodies which are financed out of public funds * employers of crews on offshore installations, ships or hovercraft, if they are covered instead with a mutual insurance association of ship owners or ship owners and others * a health service body or
NHS Trust An NHS trust is an organisational unit within the National Health Services of England and Wales, generally serving either a geographical area or a specialised function (such as an ambulance service). In any particular location there may be several ...
"Employees" are defined as anyone who has entered into or works under a contract of service or apprenticeship with an employer. The contract may be for manual labour, clerical work or otherwise, it may be written or verbal and it may be for full-time or part-time work. These persons are not classed as employees and, therefore, are exempt: * persons who are not employees (for example independent contractors who are not the employees of the person engaging them) * people employed in any activity which is not a business (such as domestic servants) * people who are related to the employer – husband, wife, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother sister, half-brother or half-sister * people who are not normally resident in the United Kingdom and who are working there for fewer than 14 consecutive days. Employees need to establish that their employer has a legal liability to pay compensation. This will principally be a breach of a statutory duty or under the tort of negligence. If the employer is insolvent or no longer in existence, then compensation can be sought directly from the insurer under the terms of the Third Parties (Rights against Insurers) Act 2010. For the history of worker's compensation in the UK, see
Workmen's Compensation Act 1897The Workmen's Compensation Act 1897 was British law in operation from 1897 to 1946. Great Britain followed the German model. Joseph Chamberlain Joseph Chamberlain (8 July 1836 – 2 July 1914) was a British statesman who was first a radical Liber ...
and following acts.


United States

In the United States, some form of workers' compensation is typically compulsory for almost all employers in most states (depending upon the features of the organization), with the notable exception of
Texas Texas (, ; Spanish Spanish may refer to: * Items from or related to Spain: **Spaniards, a nation and ethnic group indigenous to Spain **Spanish language **Spanish cuisine Other places * Spanish, Ontario, Canada * Spanish River (disambigu ...

Texas
as of 2018. Regardless of compulsory requirements, businesses may purchase insurance voluntarily, and in the United States policies typically include Part One for compulsory coverage and Part Two for non-compulsory coverage. In many states, employers that can prove they have sufficient funds to cover their workers' compensation liabilities are allowed to engage in
self-insurance Self-insurance is a situation in which a person or business does not take out any third-party insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, eval ...
, a term meaning forgoing the purchase of insurance. By 1949, every state had enacted a workers' compensation program. In most states, workers' compensation claims are handled by
administrative law judge An administrative law judge (ALJ) in the United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country in . It consists of 50 , a , five major , 326 , and some . At ...
s, who often act as triers of fact. Workers' compensation statutes which emerged in the early 1900s were struck down as unconstitutional until 1911 when Wisconsin passed a law that was not struck down; by 1920, 42 states had passed workers' compensation laws.


See also

*
Advocates for Injured Workers Advocates for Injured Workers (AIW) is a student legal clinic operating in Toronto and affiliated with the University of Toronto Faculty of Law. This clinic is supervised by the Industrial Accident Victims' Group of Ontario (IAVGO) - itself a comm ...
(AIW) * Albro v. Agawam Canal Co. *
Compensation of employees {{no footnotes, date=April 2010 Compensation of employees (CE) is a statistical term used in national accounts National accounts or national account systems (NAS) are the implementation of complete and consistent accounting technique Technique ...
* Experience modifier *
Federal Employers Liability Act The Federal Employers' Liability Act (FELA), Title 45 of the United States Code, 45 U.S.C. § 51 et seq. (1908), is a United States federal law that protects and compensates railroaders injured on the job. Background In the years between 1889 and ...
(US) * History of the United States (1865–1918): Labor and management *
Independent medical examination An independent medical examination (IME) is a medical evaluation performed by a medical professional on a patient who was not previously involved in the treatment of that patient, to evaluate the patient's course of prior treatment and current cond ...
*
Labor power Labour or labor may refer to: * Childbirth Childbirth, also known as labour or delivery, is the ending of pregnancy where one or more babies leaves the uterus by passing through the vagina or by Caesarean section. In 2015, there were about 13 ...
*
Labour law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade union A trade union (or a labor union in American English American English (AmE, AE, AmEng, ...
*
List of United States federal legislation This is a chronological, but still incomplete, list of United States federal legislation. Congress has enacted approximately 200–600 statutes during each of its 115 biennial terms so that more than 30,000 statutes have been enacted since 1789. ...
* List of US workers' compensation insurers *
Living wage A living wage is defined as the minimum income necessary for a worker to meet their basic needs. This is not the same as a subsistence wage, which refers to a biological minimum. Needs are defined to include food, housing, and other essential need ...
*
National Council on Compensation Insurance The National Council on Compensation Insurance (NCCI) is a U.S. insurance rating and data collection bureau specializing in workers' compensation. Operating with a not-for-profit philosophy and owned by its member insurers, NCCI annually collects da ...
* Scaffold Law (New York) *
Subpoena duces tecum A ''subpoena duces tecum'' (pronounced in English ), or subpoena for production of evidence, is a court summons ordering the recipient to appear before the court and produce documents or other tangible evidence Evidence for a proposition In ...
*
Transferable Skills Analysis Transferable skills analysis is a set of tests or logic to determine what positions a person may fill if their previous position(s) no longer exists in the local job market, or they can no longer perform their last position(s) (e.g., because of an i ...
* Uninsured Employer * Worker's compensation Germany * Workingmen's Compensation Act (Kern–McGillicuddy Act) (US) *
Workmen's Compensation Act 1897The Workmen's Compensation Act 1897 was British law in operation from 1897 to 1946. Great Britain followed the German model. Joseph Chamberlain Joseph Chamberlain (8 July 1836 – 2 July 1914) was a British statesman who was first a radical Liber ...
(UK) *
Workers Compensation Act 1987 In New South Wales, Australia, New South Wales (NSW), Australia Workers' compensation, workers compensation is governed by the Workers Compensation Act 1987.Workers' compensation employer defense


References


External links


United States Department of Labor


at the U.S.
National Institute for Occupational Safety and Health The National Institute for Occupational Safety and Health (NIOSH, ) is the United States federal agency responsible for conducting research and making recommendations for the prevention of work-related injury Injury, also known as physical ...
* This contains a detailed survey of the basis and international applications of the concept as of the early 20th century. {{DEFAULTSORT:Workers' Compensation Actuarial science Labour law United States labor law Social programs Trade unions Types of insurance de:Unfallversicherung