Abstract

Workers Compensation law which
was created due to the industrial age and the increasing number of on the job-
related injuries and deaths has evolved drastically over the years. In California many new Acts, laws, and reforms have
changed the workers’ compensation system to decrease cost, to improve the structure
and functions, and to increase benefits paid to injured workers. There have been
many ongoing changes in California’s worker’s
compensation system that are outlined below.

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History
of Workers Compensation Law

            Workers Compensation is an employer-paid insurance that is meant to
protect employees if they are hurt on the job. By law, employers are required to
pay for workers’ compensation benefits. Workers Compensation insurance
typically will cover the loss of wages
and medical expenses related to the injury. Workers’ compensation was created
in the United States in the early 1900’s due to the industrial age and the
increasing numbers of on the job- related injuries and deaths. At the turn of the
last century, the public demanded a reform of laws for recovery by employees for
damages from accidents that occurred during their employment. Because of the increased
industrialization in the United States the development of common law tort doctrines
amalgamated, which created many injured workers being denied recovery of damages
from their employers. Workers Compensation has become an outdated system and
due to increased fraud and litigation, the legitimacy of an injured workers
claims has made it nearly impossible to receive any medical treatment for a
legitimate injury.

California
Workers Compensation Law

California
Workers’ Compensation is a “no-fault” administrative law system that was the centerpiece
of the creation of state and federal systems of compensation for injured workers.
California workers have the right to sue an employer for damages in the tort or
civil law system for benefits. Through the years California Workers’
Compensation law has changed significantly. In 1907, California Legislature enacted
the first limitation with the use of the “assumption of risk” and the “fellow-servant
rule.” These doctrines are used as a defense in a negligence claim by an injured
worker against his or her employer. The employer is held liable for injuries from
industrial accidents caused by unsafe conditions and hazards in the workplace except where the employee fully understood
the dangers associated with the employment. Liability is also imposed on the employer
for injuries resulting from accidents that are caused by the negligence of a fellow employee. Legal actions by
the employee against their employer were still tried as civil actions before a jury.
 

In
1911, Legislature enacted the “Roseberry Act” which became effective September 1,
1911, which completely ended the defense of “assumption of risk,” and the defense
of the “fellow-servant rule,” in cases involving industrial accidents. This act
also changed the defense of “contributory negligence.” In addition, the Roseberry
Act established a voluntary system of workers’ compensation. The liability of an
employer for employee accidents was no longer governed by common law tort doctrines,
this created imposed limited liability for compensation “without regard to negligence”
for accidental injuries sustained by employees why “performing services out of and
incidental to” his or her employment. However, the employer was not liable for compensation
if the employee’s own misconduct caused the injury. If the injury resulted from
the employers own gross negligence, willful misconduct, or violation of any law
designed for the protection of the employee from bodily injury, the injured worker
was permitted to choose between statutory compensation and a common law action for
damages. Under the voluntary plan, compensation was available without regard to
negligence of the employer or the employee but was still denied to an employee whose
injury was caused by the employee’s willful misconduct. The injured worker is awarded
for their loss but is based upon a set amount
of recoveries, but the employee could not recover full damages.

On
January 1, 1914, the Boynton Act became effective
and officially titled “Workmen’s Compensation Insurance and Safety Act.” This act
changed workers’ compensation from a voluntary to a compulsory workers’
compensation system. This Act strengthened the power of the Industrial Accident
Commission, a state agency established to administer the program and to have
greater control over compensation insurers. This also gave the commission power
to create safety regulations. The Workman’s Compensation Insurance and Safety
Act continued the liability for compensation imposed on employers “without
regard to negligence”, but it also continued to deny compensation for injuries
from the employee’s own willful misconduct, such as intoxication, and barred
statutory benefits where the injury was intentionally self-inflicted.  Just like the Roseberry Act, an employee could
choose a civil damage action rather than statutory compensation benefits if their
injuries were caused by the employer’s gross negligence or willful misconduct indicating
“a willful disregard of the life, limb, or bodily safety of employees” or if the
employer was uninsured. A very important part of this new Act is that it removed
authority over industrial accidents from the civil court and placed authority with
the Industrial Accident Commission, which removed the use of juries from most of
the industrial accident disputes. In 1915
the Boynton Act had a major amendment where the word “injury” was replaced with
“accident.” This change widened the scope of industrial accidents to include diseases
caused or aggravated by an employee’s work or working environment became the employer’s
responsibility.

In
1917, Legislature substantially revised the existing law of the Boynton Act to meet
the problems that arose from the Act. The revised Workmen’s Compensation Insurance
and Safety Act of 1917 expressed the full evolution of the workers’ compensation
system and became effective January 1, 1918. Even though the revised Acts liability
for compensation was imposed on employers “without regard to negligence,” it continued
to deny compensation for injuries from the employee’s intoxication and barred statutory
benefits of intentionally self-inflicted injuries.
This caused the worker’s compensation award
to be reduced by fifty percent. If the employee was injured because of the employer’s
serious and willful misconduct was not permitted to bring a civil damage action,
but the award was increased by fifty percent.
Civil court actions against employers under this new Act were eliminated, even in
cases of gross negligence by employers. Under
the Act, the only kind of civil court actions
permitted was against uninsured employers
and third parties who injured employees. Generally, third parties are outside of
the employment relationship. Since 1918, there have been numerous amendments to
the workers’ compensation law, some increased the benefits available to injured
workers, and penalized illegal uninsured employers. In 1966, the Industrial Accident
Commission, who was responsible for the workers’ compensation program, was terminated
and replaced by the current Workers’ Compensation Appeals Board.

            In 1989 and 1993, California implemented major changes to
a broad range of workers compensation issues. Some of these reforms include restructuring
the medical-legal process, limiting compensation
of psychiatric and post-termination claims, increase in benefit payments for moderate
and serious disabilities, vocational rehabilitation payments were capped, increased
fraud deterrence, and changes to the regulations of insurance rates.

            On July 16, 1993, Governor Pete Wilson signed into law numerous
bills that made many changes to California’s workers’ compensation system. Costs
of workers’ compensation have increased to
an estimated $11 billion per year and were
estimated to continue. Benefits to injured workers had not increased in many years
and were low by national standards. The first
part of the legislative reform took place in the spring of 1993 which dealt with
escalating medical costs. Senate Bill 31 allowed Division of Workers’ Compensation
(DWC) to create a realistic administrative fee schedule for medical-legal evaluations
of work injuries, which is one of the major costs in the system, in place of the
inflation formula that has been used. It also set which types of fees can be charged
and required that the claim is contested before
a medical evaluation was allowed. This reform also limited the number of evaluations
that the injured worker was allowed in contested cases to two if they were represented
by an attorney, and a Qualified Medical Evaluator selected from a panel given by
the Industrial Medical Council, for unrepresented workers. Because of this reform
medical costs paid by insured employers decreased from $395.5 million in 1991 to
an estimated $64.5 million by 1994. One of the main goals of the reform was to improve
benefits for workers injured on the job. The maximum weekly benefit payment for
temporary disability rose from $336 a week to $499 per week. Because of these changes, the costs of workers compensation have
plummeted dramatically and had continued to over the years.

            Another reform took place in 2012 by Senate Bill 863 passed
on August 31, 2012, and signed into law by
Governor Brown on September 18, 2012. This bill made wide-ranging changes to California’s
worker’s compensation system, including increased
benefits to injured workers and cost-saving methods. Major areas changed included
an Independent Bill Review (IBR) process, a new Independent Medical Review (IMR)
process, new lien filing fees, a revised Qualified Medical Examiner (QME) process,
new and updated fee schedules, changes in calculating Permanent Disability benefits,
and the creation of disproportionate earnings loss adjustment return-to-work fund.
The bill took effect on January 1, 2013, but not all its provisions were effective
immediately.

The
purpose of these Acts and Reforms is to keep
the costs of industrial related injuries low and not be a burden on society, to
give prompt limited compensation to injured employees, regardless of fault, to
help increase industrial safety, and to protect the employer from tort liability
for their employees’ injuries. Even though these changes have saved employers and
insurance companies significant amounts of money, it has also made it harder for
injured workers to receive adequate and timely medical care due to the new IBR and
IMR process.

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