Worker’s Comp 101
With a wide variety of statues and shields across the nation, here are the basics of what a site manager needs to know.
by Cole A. Wist
With a few important exceptions, 50 individual state statutes govern workers’ compensation law in the United States, and interpretations and exceptions to these statutes originate in the state court system. The exceptions generally involve federal government employees, railroad employees, and longshoremen, as well as certain specific disease compensation systems (black lung).
Generally, state compensation statutes require employers to maintain workers’ compensation insurance and to provide guaranteed but capped payments and benefits to employees for workplace illnesses and injuries. Employers are also required to provide compensation to a fatally injured employee’s surviving dependents, regardless of fault. The workers’ compensation systems are administered outside of the court system, by state administrative agencies.
State workers’ compensation systems generally provide a shield for employers against civil tort claims by employees. In other words, injured employees (and their dependents or heirs) covered by a state compensation system generally cannot sue the employee’s employer for damages based on traditional legal theories of recovering damages caused by the actions of others. The key concept in this compromise was the creation by state legislatures of an unqualified, but defined and limited payment duty, for occupational accidents, in exchange for the elimination of employer tort law defenses.
The basic workers’ compensation structure is a “no-fault” system. In other words, for an occupational injury or illness, the injured or ill employee, or their heirs, need not prove the negligence of the employer, and the only factor needed to trigger workers’ compensation is the occupational nature of the injury or illness. However, over time, a number of state courts interpreted their state’s employer shield to contain “exceptions” for damages caused by the “willful” conduct of employers, permitting tort claims to be brought in court for damages.
Currently, there are a wide variety of state workers’ compensation systems, providing different levels of defined and capped benefits for employee injuries, illnesses, and death. Some states provide very strong shields for employers against almost all occupational tort claims, and other states offer weaker shields which permit tort actions and monetary damages for certain classes of injuries or illness (those caused by the “willful” conduct of employers or actions brought by workers who do not fit the traditional employee definition such as independent contractors, temporary service personnel, etc.).
In most states, workers’ compensation claims are investigated by independent third-party adjusters, hired by workers’ compensation insurers, and licensed and regulated by individual states. Workers’ compensation claim investigations occur well after the event that caused the claim and should not be confused with Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (MSHA) investigations, which can occur immediately, particularly in fatal or serious accident or toxic chemical exposure cases.
Although employers generally are shielded from tort liability from claims of their employees, they generally are not shielded from claims of non-covered persons (i.e., visitors, contractors, or temporary employees). Understanding state workers’ compensation law and its relationship to federal regulatory law is critical to evaluating, limiting, and/or properly transferring tort liability risks.
The regulations and standards of OSHA and MSHA create minimum “standards of care” and duties for employers. These standards of care and the investigations and inspections by the federal agencies (and their state equivalents) create evidence that is often used by attorneys representing plaintiffs in court actions against employers. Such plaintiffs’ legal actions often take the form of one of the following:
Intentional torts for employee injury, illness, or death (fueled by agency findings of “willful” or “knowing” conduct that violates mandated standards);
Tort actions for negligence brought by contractor employees or temporary workers against site owners or facility operators; or
Product liability claims against manufacturers.
Employer liability risk-reduction programs should anticipate risks beyond the state workers’ compensation system. Such risk-reduction programs should encompass the following:
Risk analysis and planning based on recognized risk factors;
Expanded safety and health risk-reduction policies and programs;
Insurance coverage analysis for risks, exclusions, and expanded coverage;
OSHA and MSHA regulatory compliance programs, audits, and response training for management personnel;