Changes to Workers’ Compensation Laws Have Diminished Benefits

In early October, the Department of Labor released a new report stating that changes to state workers’ compensation laws and cuts to state workers’ compensation programs have left Americans with inadequate benefits that risk leaving injured workers in a state of poverty.

State-based workers’ compensation programs are designed to support workers who become ill from their job or are injured on the job regardless of fault; in return, workers give up their right to sue their employer for negligence (this is known as the “Grand Bargain”). State programs do not currently have federal oversight nor are their national minimum standards, but based on its findings the Labor Department is recommending federal oversight of state workers’ comp programs.

According to the report, “only a small portion of the overall costs of occupational injury and illness is borne by employers” — estimated at 20 percent of the overall financial cost. Those costs are then “shifted away from employers, often to workers, their families and communities.” Recent changes to state worker compensation laws have “decreased benefits, created hurdles to medical care, raised the burden of proof to quality for help and shifted costs to public programs” according to ProPublica. The report details stories of injured and ill workers who have lost their homes, been denied medical care and even been denied prosthetic devices.

In Wisconsin, Governor Walker signed Assembly Bill 724, which contained 20 new provisions. Critics of the bill noted that the new law did not address the rising costs of healthcare. Some of the changes that affect workers include:

  • The statute of limitations for traumatic injuries was reduced from 12 years to 6 years.
  • The rate for employee compensation was changed.
  • Employees can now be discharged or suspended for misconduct or substantial fault after the injury/illness occurs and their Temporary Total Disability benefits can be suspended. (In the past, an injured employee who was terminated was still entitled to receive workman’s compensation benefits if they were injured on the job).
  • Permanent Partial Disability caused by traumatic injuries can now be apportioned to what part of an injury was caused at work and what part of the injury was “caused by other factors.” By not defining “other factors,” it is expected that more time will be spent in court litigating these matters — resulting in greater costs — because employers and insurers will encourage medical experts for workers compensation cases to look for alternative causes of the injury.
By Tlusty, Kennedy & Dirks, SC

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Posted in: Personal Injury