Workers’ compensation is, at its most basic, tort reform. Pennsylvania’s workers’ compensation system precludes workers from seeking justice against their employers in our courts. In exchange for forfeiting their right to a jury trial, employees are entitled to a quick, equitable, and predictable resolution to their claims through the workers’ compensation system. Employers also win; employee injuries are treated as “no-fault,” which means that injuries are seen as one of the costs of doing business and not a result of negligence.

Since its inception, the workers’ compensation system has been clearly biased against working men and women. In addition to denying them full access to our courts, workers’ compensation precludes consideration of pain and suffering or other non-economic damages. The loss of body parts is governed by a schedule and doesn’t take into consideration individual circumstances.

Though workers’ compensation is unfairly skewed against employees, it hasn’t stopped big business and insurers from trying to tip the scale further in their favor. Corporations decry rising workers’ compensation insurance premiums, while insurance companies try to hold on to more of their premium dollars by paying out less in claims. To both of those ends, a campaign against America’s workers has been launched that will do nothing to ease costs and everything to damage workplace safety.

CAMPAIGN AGAINST WORKERS

The two main arguments against workers’ compensation are:

1

FRAUD & ABUSE

To accomplish their goal of denying workers their deserved benefits, big business has launched a campaign of misinformation that demonizes America’s workforce. They frequently cite “rampant employee fraud” as reason to rework the workers’ compensation system. Unfortunately for them, statistics don’t support their propaganda – studies have shown that only one to two percent of employees have engaged in fraud.

California has been one of the battleground states for workers’ compensation tort reform. During the heated debate there, then-Governor Pete Wilson claimed 30 percent of all claims were fraudulent. The problem with his claim was that it was completely false. The California Department of Insurance subsequently released an estimate that worker fraud accounted for only three-tenths of one percent of all claims.

Corporations also demonize “lazy workers” who abuse the system. They claim workers see on-the-job injuries as lottery tickets, enabling them to collect their wages without working. This theory has huge holes, the biggest of which is logic. Data has consistently shown that injured workers earn significantly less than they did prior to their injury – even if they’re able to return to work. The Rand Institute for Civil Justice found that permanent partial disability claimants in California received approximately 40 percent less in earnings over the four to five years following their injuries than their non-injured coworkers. For workers with minor disabilities, Rand found benefits replaced only a small fraction of their lost wages.

2

JOB-KILLING COSTS

Corporations are also quick to point to “job-killing” insurance costs as another reason to redraw our workers’ compensation statutes. They claim “employee fraud” is driving up workers compensation’ insurance premiums, forcing employers to hire less or move to state’s with less burdensome requirements. Though many legislators have given in to special interests and kowtowed to big business demands, those states haven’t seen a reduction in insurance rates. Why? Because insurance rates have little to do with claims. Rate hikes are cyclical, because insurance companies make a majority of their profits from investment income. When interest rates drop or the stock market plummets, investment income decreases – and insurance companies sharply increase premiums and reduce coverage. Limiting workers’ compensation benefits will have no effect on insurance rates, and therefore no effect on the costs of doing business.

TACTICS

To accomplish their goal of denying workers the benefits they deserve, special interest groups are using their ample profits to lobby lawmakers. Many legislatures have changed state workers’ compensation statutes to make it more difficult for workers to file claims and receive compensation. These changes have made the workers’ compensation process longer and less efficient. One legal scholar told The Center for Justice & Democracy that “injured workers often face denials and delays of apparently legitimate claims, high litigation costs, discrimination, and harassment by employers and coworkers…[M]any reports suggest that recent reforms have substantially increased injured workers’ financial burdens.”

Other reforms have lowered benefits, narrowed eligibility requirements, put medical treatment decisions in the hands of insurance companies, and limited workers’ opportunity to seek legal advice. Lowering benefits may save insurance companies money on payouts, but it won’t save employers any money. Repeated studies have shown that premium costs have almost no correlation to the amount of claims paid out. It also won’t save taxpayers money, as injured workers will be forced to rely on government assistance programs if they’re denied the medical and disability benefits they need.

Narrowing eligibility requirements is also a sneaky way of disqualifying many diseases, conditions, and repetitive stress injuries. For many workers, health conditions and injuries occur over time; limiting their reporting time for these injuries often disqualifies them before they even receive a diagnosis.

Though workers’ compensation was created as a no-fault system, it has since become increasingly adversarial towards employees. Insurers are putting the onus on workers to prove their injuries are work-related. One way they accomplish this is by requiring workers to see insurance company doctors. A study conducted by the New York AFL-CIO found that insurance company doctors often performed short exams, were hostile toward patients, had little oversight, and did not make their reports available to workers before hearings on their claims. One such doctor told the New York Times, “If you did a truly pure report, you’d be out on your ears and the insurers wouldn’t pay for it. You have to give them what they want… That’s the game, baby.” Does that sound like an independent and professional medical opinion?

Finally, there are several proposals to limit attorney fees in workers’ compensation cases; for example, in Pennsylvania, attorney fees must be approved by a judge. The goal is to make it more difficult for injured workers to seek legal advice. Workers’ compensation is complex and difficult for the average worker to understand. If we limit attorney fees for workers, why aren’t we also limiting attorney fees for employers and insurance companies? For every claim filed, a team of insurance specialists is deployed to fight it. It’s only fair that workers have the advantage of legal counsel in a case that could determine their financial future.

SAFETY

Limiting workers’ rights to benefits will make all of us unsafe. If employers can’t be held liable for dangerous working conditions, and if insurance companies have a reasonable expectation that most claims will be denied, what incentive will there be to keep America’s working men and women safe?

Workers’ compensation systems aren’t designed to reflect the full costs of injuries, so they’ve never represented a true deterrent against unsafe working conditions. Because workers’ compensation guarantees employers tort relief, they don’t face the same legal threats represented by other claims.

However, when a worker is injured on-the-job by a defective piece of machinery, they can seek legal remedy in our civil courts. According to the Center for Justice & Democracy, “Companies that are hit with large verdicts or settlements often act immediately to change hazardous workplace conditions.” Often, lawsuits are the only means by which the government learns of dangerous conditions or products.

We need to hold negligent employers accountable to keep us safe. If we continue to exempt employers and insurance companies from liability, we’ll continue to see an increase in worker injuries and fatalities.