How Workers' Compensation Works--A Brief History of Illinois Workers' Compensation
American Workers’ Compensation celebrates its centennial this year—the first state law was passed in Wisconsin in 1911, and Illinois was close behind in 1912. Before workers’ compensation employers had no responsibility to compensate employees or their families if an employee was injured or killed in an accident that arose out of their employment in the absence of proven negligence by the employer. While employees or their families could sue employers in a civil lawsuit, these suits were expensive and difficult to win. They could be defeated if the employer showed that the employee had some degree of contributory negligence for their injury, if their injury was the result in any part of a fellow employee’s actions, or if they had had assumed the risk for the injuries by signing an employment contract (which they often had to do if they wanted a job) that waived their rights to sue for injuries.
Workers’ compensation was created by government to solve two main problems—employees needed to have prompt and fair compensation for injuries and employers wanted freedom from civil suits that exposed them to damages which included pain and suffering. American workers’ compensation laws were passed on a state by state basis with different states providing different rights to workers and requiring different standards of proof. All states modeled their systems on Prussia’s, put in place by Otto von Bismark in 1871. The state-administered system was the “exclusive remedy;" workers could no longer sue their employers in civil court for their work injuries. In return employees no longer had to prove fault to receive compensation and the fault of an employee for his injuries couldn’t defeat a claim. Injured workers received benefits that included lost wages, medical care, and rehabilitation. Family members could receive death benefits. Compensation was also awarded for permanent impairment of a workers’ body parts, a concept that has been around since approximately 2050 B.C.—a tablet from ancient Sumeria provides the first written legal description of this. The employee did need to prove that his injuries arose out of and in the course of his employment, which sounds simple enough to prove, but often isn’t.
Illinois Workers’ Compensation is a law that was created by the state legislature and is, from time to time, changed by it, but, like other laws, it is interpreted by the courts, and is thus always changing. In some aspects, it reflects the reality of employment a century ago—for example, nothing in the law addresses the loss of employment benefits, such as health insurance, due to a work injury.
While the state administers the workers’ compensation system through the Illinois Workers’ Compensation Commission, the payment of claims mostly operates outside of state supervision. Employers buy insurance or, if self-insured, have insurance companies administer the benefits. Insurance companies pay benefits through their adjusters, who may or may not have a grasp of the nuances of Illinois law and who are rewarded for minimizing costs and closing claims. Lawyers are hired by the insurance companies to defend claims and by petitioners to help them navigate the system, negotiate settlements, and represent them in court. Arbitrators are the trial court level judges in the system. Arbitrators hear testimony and review evidence, decide if petitioners have met their burden of proof, and if so, enter awards for lost wages, medical benefits, vocational rehabilitation, permanent partial disability, total disability, and death benefits. About 95% of cases are resolved through a settlement contract, and these contracts are approved by the arbitrator. If the petitioner has no lawyer, the arbitrator will take a few minutes to decide if the settlement seems fair before approving or rejecting the contracts; if the petitioner is represented by counsel, the contracts can be approved by mail and are essentially a rubber stamp.
Workers’ compensation fraud is illegal but it’s not illegal to make a good faith claim that an accident or condition such as carpal tunnel syndrome is work related and there are reasons for both sides to work towards a settlement of claims. Claims are expensive to defend and insurance companies want to close files and terminate medical benefits. Petitioners want to move on with their lives and may have health insurance to pay for treatment.
In my practice I’ve found few people trying to game the system relative to the hundreds of injured workers I’ve represented who are just trying to get medical treatment and survive until they can return to work. They have to deal with many hurdles: the bewildering medical establishment, where they have to navigate departments of Occupational Medicine, specialists, Independent Medical Exams, conflicting opinions, delays in treatment, adverse reactions to treatment, and simply the limitations of medicine to help or cure intractable pain or improve disability; insurance companies that may be hard to find, fail to return phone calls, unfairly deny them, delay payment of benefits, or hire private detectives to spy on them; employers who pressure them not to file claims, threaten them with retaliation, terminate their health insurance, fire them, provide work that’s beyond their restrictions, or simply make them feel like the scum of the earth; a legal system that is nearly impossible to navigate without a lawyer, and even with one, that’s very slow and provides not enough teeth to punish an insurance carrier or employer that’s acting in a bad faith.
Workers’ compensation is a delicate balance between the rights of employees and the bottom line of employers. In a state with high unemployment, a disposable work force is attractive to employers and those who suffer work injuries are especially vulnerable. Learn your workers’ compensation rights and contact your representatives if you value them. An excellent place to start your education is the web page of the Illinois Workers’ Compensation Commission, iwcc.gov. Although the workers’ compensation system is far from perfect, it does accomplish the goals of providing a no-fault system for payment of benefits to injured workers and gives workers critical rights unavailable to workers in other states, including right to pick your own doctor. Appreciate what you have and how hard it was to get, because one day, unless workers speak up for their rights, workers’ compensation may be gone.