Three Workers’ Compensation Trends That Harm Workers And Cost Communities
Several months ago, a Department of Labor (DOL) official published an article on the agency’s website discussing three troubling trends with workers’ compensation benefits. You can read that article at Trends In Workers’ Comp. These trends are certainly true in Alabama. I’ll discuss each of these harmful trends below:
1. The Number Of Workers Covered By Workers Compensation Has Decreased
We need to remember the purposes of workers’ compensation. Our work comp systems were originally implemented to provide a couple basic benefits — Medical care and a basic disability benefit. These are essential benefits for injured workers.
When you face a serious work-related personal injury, your worries turn to a few basic questions: Can I get the medical care I need? Will I be able to return to work? How can I take care of my family while recovering (or if I become disabled). Without basic work comp benefits, many people would be left unable to work and unable to obtain necessary medical care. Alternatively, they might obtain care at taxpayer expense. Every serious injury has a cost. It’s just a question of who pays for it.
Why is the number of covered workers decreasing? This is largely due to worker classification as an “independent contractor” rather than employee. While much of this issue involves wrongful misclassification, recent years have seen the rise of an economy based on independent contractors rather than employees. In Alabama (and other states), our legislature has even passed laws to “reclassify” some workers as independent. Of course, we all know whose interests our legislators largely protect — It’s not the men and women who do the actual work.
2. States Pay Fewer Benefits To Injured Workers
If you’ve read many of my past blog articles, you know I regularly discuss the almost annual effort by a few of our state legislators (Sen. Arthur Orr) to enact an arbitrary benefit cut-off for Alabama workers most in need. What does Senator Orr (and his supporters) propose? They want to amend our comp laws to arbitrarily cut-off benefits for Totally Disabled workers. These are workers who suffered the worst injuries — Injuries that left them unable to find any employment. They also want to arbitrarily cut-off medical benefits after a certain period of time. Of course, that would shift the burden largely to other taxpayers (workers) who fund Medicare and Medicaid programs.
In his article, the DOL official notes that from 2016-2020, work comp benefits decreased in 40 states. While several factors may contribute, the official specifically cites changes to state workers’ compensation laws. In Alabama this is clearly evident. Our legislature amended the Act recently to reclassify a whole group of injured workers. Our legislature annually debates an effort to arbitrarily cut-off disabled workers.
Worst of all — Our legislature has denied any cost of living increase to partial disability workers in decades. Permanent partial disability benefits remain capped at $220 per week, an amount established decades ago. While our legislators have increased their own compensation and while the cost of everything else has tremendously increased, partially disabled workers are left with an amount now below the poverty level for a family of four. This amount is also arbitrarily capped in the number of weeks it is paid. In 2015, the magazine ProPublica published a number of articles highlighting the injustice of our work comp systems (and Alabama’s system in particular). When it comes to permanent partial disability benefits, here’s what the ProPublica journalist had to say:
One of the things that makes Alabama’s approach to permanent partial disability benefits so perplexing is that almost everyone seems to agree that it’s unfair.
The amount of lost wages covered — capped at $220 a week — was set by the Legislature in 1985. But unlike other parts of Alabama’s workers’ comp law, it was never tied to inflation.
The amount is now the lowest in the country. Providing just $11,440 a year, it is below the poverty line for a single person and not even half the poverty line for a family of four.
The way our Legislature has treated the working men and women who run our schools, build our highways and produce our goods, is terrible. Behind the scenes, a constant onslaught of lobbyist money creates a constant risk that benefits will further erode.
3. Some States Are Considering OPTIONAL Work Comp Systems
Think about that — A work comp system where big companies can simply opt out. How many people does Walmart employee in Alabama? Many of the jobs at Walmart are physically difficult. At any given time, our office is helping probably a dozen Walmart workers navigate the system simply to get essential care and benefits. What if Walmart could simply opt out? What if a huge local employer, like a Huntsville Hospital in Huntsville, could simply opt out of the system. Think of the number of local workers at the largest area employers and the impact of leaving them unable to obtain essential care, benefits or rehabilitation?
A couple states, like Texas, have created opt-out systems for large employers. These employers can opt out of the work comp system and set their own benefit policies. Do you trust them to set policies that are fair or provide basic benefits. Let’s look at a couple potential examples. In Alabama, if you are injured on the job, you have to provide notice to your employer. That’s an important provision. Employers need timely notice so they can provide benefits for legitimate claims. Our current law allows a short period for notice of just a few days. This protects workers who cannot provide immediate notice — Maybe they were hurt on night or weekend shifts where no supervisors were present. Maybe they suffered a loss of consciousness and it took some time to provide notice. What if a big company was allowed to opt out and write its own policy so that notice must be given within a couple hours. Many hurt or disabled workers would be left without help. What if a big company was allowed to opt out and write its own policy forcing all injured workers to see the same (hand-picked) company physician with no potential alternatives. I’ve seen the damage such hand-picked providers can cause over the years.
Is It A Race To The Bottom?
According to officials at the DOL, states are moving further and further from providing essential or basic work comp benefits. Some officials highlight this as a “race to the bottom” where states decrease essential protections. This trend does not provide long-term stability to our communities or protect vulnerable families facing disability.
If you’ve suffered a serious accident or injury at work, talk to someone about the benefits you need. Seek counsel who understands available benefits and is willing to fight so that you receive them.