What Is the History of Workers’ Compensation?

The catalyst for a fair and equitable system of workers’ compensation came out of the industrial revolution.

As industrial activities increased both in Europe and in the United States, factories expanded and the occurrence of work-related injuries grew. Generally, the only recourse for workers injured on the job was to sue their employers in the courts. Eventually, court systems became overwhelmed by the flood of cases, resulting in long delays before workers realized any compensation for their injuries. Compensation was often insufficient and an award was in no way guaranteed. Many injured workers ended up with no income at all. Many of them were destitute and, along with their families, became a drain on state welfare systems. Furthermore, employers often found themselves completely embattled due to the glut of cases against which they defended.

Of the European nations, Germany was the initiator of a sort of workers’ compensation program when, in 1938, it passed laws providing compensation to railroad workers and passengers involved in railway accidents. In 1880, England provided a model for some of the first United States’ laws when the Parliament passed an act making employers responsible for injuries to workers.

The first state in the United States to pass an employers’ liability act was Maryland in 1902.

Although later ruled unconstitutional, other states began passing legislation that passed constitutional muster. In 1911, Wisconsin passed the first workers’ compensation act, a precursor to present-day laws. It was just a matter of years for the rest of the states to follow suit. Currently, all states provide programs whereby injured workers receive medical care and disability income even when they are injured because of their own negligence. Employers are protected from potentially large losses by preset benefit schedules for injuries suffered by employees. The trade-off is that workers are prohibited from filing suit, while employers are obligated to pay mandated benefits.