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Workers’ Compensation and Employers’ Liability
Who is an Employer?
Employer Liability Under Common Law
State WC Laws
Federal Compensation Laws
The WC and Employers Liability Policy
Who is an employer?
Characteristics of employers
Engages the services of individual
Fixes hours
Provides tools
Defines methods and means
Employer versus independent contractor
Proprietors and partners are not employees
Employer Liability Under Common LawEmployer’s Duty of Care
Provide a safe place to work
Provide an adequate number of competent fellow employees
Provide safe tools and equipment
Warn the employee of inherent dangers
Make and enforce rules for the safety of all employees
Common-Law Defenses
Assumption of risk
Contributory negligence
Negligence of fellow employee
State Workers’ Compensation LawsOriginally held unconstitutional
Maryland 1902 - unconstitutional
Federal law 1908 - provided new benefits
New York 1910 - unconstitutional
Wisconsin 1911 - upheld
New York 1913 - upheld
Principles of WC Laws
Prompt payment of determinable benefits
Elimination of delays and reduced costs
Guarantee of benefit payments through insurance
Promotion of safety
Common Features of Compensation LawsChoice of Law
Employee chooses which benefits to receive if more than one state law applies:
State where injury occurred
Location of usual employment
Where employee was hired
Persons and Employments Covered
Covers employees and not independent contractors
Exception - must cover employees of uninsured independent contractors
Common Features of Compensation Laws
Description of Injuries and Diseases Covered
Injury must be caused by accident arising out of and in the course of employment
Disease must be covered by the statute as one that normally results from the nature of the employment and exposure to the disease must arise from employment
Common Features of Compensation Laws
Benefits Provided
Indemnity payments for time lost from work
60-75% of wages
Tax free
Maximum set by state
Payment for medical services
Unlimited
No deductibles or coinsurance
Rehabilitation services
Death benefits
Common Features of Compensation LawsMethods of Financing Benefits
Private insurance
Insurance through assigned risk plans
Insurance through state funds
Qualified “self-insurance” plans
Excess insurance
Procedure for Obtaining Benefits
Notification requirements
Administration
Courts
Special commission
Third-Party ClaimsApplies when employee eligible for WC benefits was injured by the tort of a third partyEmployee has three choices:
1 Sue the third party
Can file for WC benefits if unsuccessful
2 Accept WC benefit
Employer is subrogated to rights of employee against third party to extent of WC benefits
3 Accept WC benefit and sue third party
Employer has lien on proceeds of recovery to extent of WC benefits
Federal Compensation LawsFederal Employers’ Liability Act (1908)
Applies to employees of interstate railroads
Eliminates traditional employer defenses in suits by employees
Longshore and Harbor Workers’ Compensation Act
Provides more generous WC benefits to maritime workers (loading, repairing, building vessels)
Jones Act (1920)
Extends FELA to crew members
Migrant and Seasonal Agricultural Worker Protection Act
