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The Early History of Workers’ Compensation

Workers' CompWorking conditions in early factories were often hazardous and injury rates were high. Workers who were injured on the job rarely received compensation.

An injured or disabled worker’s only recourse was to file a civil suit against their employer. This process was often difficult and unfruitful, but the few who did win their cases encouraged the masses to seek similar relief. 

As is the case in our present day, these suits were costly for both the injured worker and the employer. Many believed something needed to change. Workers, employers, and legislators alike began to see the need for a system that would protect both the employer and the employee with less of a burden on the judicial system.

Germany became one of the first countries to protect injured workers by passing legislation to provide compensation for injured and disabled employees.

Later, Prussia, under the leadership of Chancellor Otto von Bismark, created its own system of workers’ compensation insurance and passed the Workers’ Accident Insurance law in 1884 which became the basis for what is now our current workers’ compensation system.

The Workers’ Accident Insurance law offered benefits for job-related injuries and covered medical care and rehabilitation. Along with the law, came the agreement that employers under that system could not be sued by their employees in civil courts.

England followed suit in 1880 when the English Parliament passed the Employer’s Liability Act. This act protected workers injured due to the negligence of their employer, but would not cover accidents caused by fellow employees. It was then replaced in 1897 with a Workmen’s Compensation Act, which mirrored Prussia’s Workers’ Accident Insurance law. 

In America, individual states tried passing laws that were similar to laws that were being created and modified in Europe. Georgia and Alabama were two of the first states to participate, passing Employer Liability Acts of their own in 1855, and by 1907 twenty-six more states had joined them. Unfortunately, according to Workers’ Compensation, A Brief History by Lloyd Harger, “none of these state acts embodied an actual compensation principle and most simply said, ‘prove it’ and sue”.

In 1908, the U.S. federal government adopted the first actual “workmen’s” compensation law in America called the Federal Employer’s Liability Act. Harger wrote that this legislation was adopted at the urging of President Roosevelt to cover certain federal government employees that were engaged in hazardous occupational duties.

Finally, in 1911 Wisconsin and Washington became the first states to pass a compensation law similar to the advanced laws in Europe, where the employer agreed to provide medical and wage replacement benefits for injured workers if the injured employee agreed, in return, to give up his or her right to sue the employer.

This legislation would become the model for other states across the union to follow when drafting their own compensation legislation. Check back to read about what happens next when more states join Wisconsin as the workers’ compensation ball started rolling in America!

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Comments

Work comp policies began to be sold in the US in the 1870s. The employers purchased them and offered the benefits to an injured worker in lieu of a negligence or employer's liability claim, which were far more successful than later writers would admit. 
 
Voluntary comp laws were added to employer liability laws before mandatory comp laws were enacted. NY had one in 1910. 
 
Employer's liability laws were, in fact, hugely successful, due to widespread contingency fees, and led to a flood of lawsuits in immigrant communities in northeastern cities.  
 
Mandatory work comp was largely created by the need to eliminate or greatly reduce contingency fee claims.
Posted @ Thursday, October 18, 2012 8:16 AM by ted ronca
I believe worker compensation is very important as injured workers can get compensation for injuries and disabled employees.
Posted @ Thursday, October 24, 2013 5:41 AM by Robert
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