History of Workers Compensation Law
The idea for workman’s compensation originated from the industrial revolution in Germany, which took place during the 1800s. New technology created new jobs, and brought new dangers to the workplace. Mass production of goods and mass transportation, such as railroads, involved new machinery, factories, and workplace hazards. Awareness of these dangers spread, and led to the introduction of the workers compensation legislation.
With the industrial revolution, the idea of workers compensation law spread across Europe and to the United States, which started with state workers compensation laws through the 1920s. Today, most workers compensation laws are at the state level, but federal employees and those in certain industries are protected under federal workers compensation laws.
Workers compensation is an alternative to a court case and usually provides faster, better, and less costly results for all parties involved. Prior to the introduction of the workers compensation law, most American employees could not afford the time nor money that a lawsuit against an employer required.
Theory Behind Workers Compensation
In order for workers compensation to work, most states require that employers either carry workers compensation insurance, self-insure, or contribute to state-run workers compensation funds. There is some debate over where the funding for workers compensation comes from. Whether a company charges its customers more or pays its employees less, workers compensation is meant to benefit everyone involved and to serve as an incentive to employers to create a safer workplace.
Workers compensation is meant to provide a quick solution to work related injuries or illness to both the employer and the employee, without regard to fault. The employee gives up their right to sue the employer for the illness or injury in exchange for immediate monetary compensation for lost wages, medical benefits and in some cases, other benefits. The employee is compensated without the time or monetary requirements of a trial, and the employer does not have to worry about defending against a lawsuit.