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History of Workers’ Compensation

By May 19, 2021No Comments

The rise of the Industrial Revolution meant extreme working conditions in early factories.

Hazards were plenty, and injury rates were colossal. Though hurt workers rarely received compensation, they could turn to the courts for help.

However, the legal framework for compensating injuries was exceptionally restrictive – so restrictive that the following principles became known as the “unholy trinity of defenses.” If the employer could prove these to be true about the injury, the worker couldn’t claim a farthing:

Contributory negligence. The employer wouldn’t be held liable if the worker was responsible for his own injury, regardless of how hazardous the machinery or work environment was. So if a worker slipped and lost a hand, they wouldn’t receive compensation.

The “fellow servant” rule. If a fellow employee caused the worker’s injuries, employers were not held liable.

Assumption of risk. This doctrine held that employees accepted the hazards of their work when they signed their contracts. To make matters worse, many industries had employees sign contracts that relinquished their right to sue for injuries. That’s why these unfair documents earned the grim moniker “death contracts.”

Luckily, the rise of Realpolitik in Prussia would usher in the end of these dark times for workers. Chancellor Otto von Bismarck implemented a system of social insurance, known as the Employers’ Liability Law of 1871. This provided some social protection for workers in certain factories, quarries, railroads, and mines.

In 1884, Bismarck championed Workers’ Accident Insurance, which laid the groundwork for today’s Workers’ Compensation Insurance.

Workers’ Compensation in America

The trend toward compensating workers for their occupational injuries was a little slower to hit the United States. It took Upton Sinclair’s shocking 1906 novel The Jungle, which details the horrors workers experienced in Chicago slaughterhouses, to stir the public’s outrage.

Eventually, Congress passed the Employers’ Liability Acts of 1906 and 1908, which made contributory negligence doctrines less restrictive. Between 1898 and 1909, New York, Maryland, Massachusetts, and Montana attempted and failed to pass workers’ compensation acts.

Wisconsin passed the first comprehensive workers’ compensation law in 1911, while Mississippi was the last state to jump onboard in 1948. These early laws required employers to provide medical and wage replacement benefits for injured workers. If the injured employee accepted these benefits, they forfeit their right to sue the employer.

Today, this basic structure for Workers’ Comp is essentially the same. Most states require employers to carry Workers’ Compensation Insurance for their full- or part-time employees.

Each states’ laws vary and we will happily answer any questions you have regarding your North Carolina or South Carolina claim. Contact us or call us for a free consultation.