AbstractWorkers Compensation law whichwas 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 havechanged the workers’ compensation system to decrease cost, to improve the structureand functions, and to increase benefits paid to injured workers.
There have beenmany ongoing changes in California’s worker’scompensation system that are outlined below. Historyof Workers Compensation Law Workers Compensation is an employer-paid insurance that is meant toprotect employees if they are hurt on the job. By law, employers are required topay for workers’ compensation benefits.
Workers Compensation insurancetypically will cover the loss of wagesand medical expenses related to the injury. Workers’ compensation was createdin the United States in the early 1900’s due to the industrial age and theincreasing numbers of on the job- related injuries and deaths. At the turn of thelast century, the public demanded a reform of laws for recovery by employees fordamages from accidents that occurred during their employment. Because of the increasedindustrialization in the United States the development of common law tort doctrinesamalgamated, which created many injured workers being denied recovery of damagesfrom their employers.
Workers Compensation has become an outdated system anddue to increased fraud and litigation, the legitimacy of an injured workersclaims has made it nearly impossible to receive any medical treatment for alegitimate injury. CaliforniaWorkers Compensation LawCaliforniaWorkers’ Compensation is a “no-fault” administrative law system that was the centerpieceof 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 orcivil law system for benefits. Through the years California Workers’Compensation law has changed significantly.
In 1907, California Legislature enactedthe first limitation with the use of the “assumption of risk” and the “fellow-servantrule.” These doctrines are used as a defense in a negligence claim by an injuredworker against his or her employer. The employer is held liable for injuries fromindustrial accidents caused by unsafe conditions and hazards in the workplace except where the employee fully understoodthe dangers associated with the employment. Liability is also imposed on the employerfor injuries resulting from accidents that are caused by the negligence of a fellow employee.
Legal actions bythe employee against their employer were still tried as civil actions before a jury. In1911, Legislature enacted the “Roseberry Act” which became effective September 1,1911, which completely ended the defense of “assumption of risk,” and the defenseof the “fellow-servant rule,” in cases involving industrial accidents. This actalso changed the defense of “contributory negligence.” In addition, the RoseberryAct established a voluntary system of workers’ compensation. The liability of anemployer 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 andincidental to” his or her employment. However, the employer was not liable for compensationif the employee’s own misconduct caused the injury.
If the injury resulted fromthe employers own gross negligence, willful misconduct, or violation of any lawdesigned for the protection of the employee from bodily injury, the injured workerwas permitted to choose between statutory compensation and a common law action fordamages. Under the voluntary plan, compensation was available without regard tonegligence of the employer or the employee but was still denied to an employee whoseinjury was caused by the employee’s willful misconduct. The injured worker is awardedfor their loss but is based upon a set amountof recoveries, but the employee could not recover full damages.OnJanuary 1, 1914, the Boynton Act became effectiveand officially titled “Workmen’s Compensation Insurance and Safety Act.
” This actchanged workers’ compensation from a voluntary to a compulsory workers’compensation system. This Act strengthened the power of the Industrial AccidentCommission, a state agency established to administer the program and to havegreater control over compensation insurers. This also gave the commission powerto create safety regulations. The Workman’s Compensation Insurance and SafetyAct continued the liability for compensation imposed on employers “withoutregard to negligence”, but it also continued to deny compensation for injuriesfrom the employee’s own willful misconduct, such as intoxication, and barredstatutory benefits where the injury was intentionally self-inflicted.
Just like the Roseberry Act, an employee couldchoose a civil damage action rather than statutory compensation benefits if theirinjuries 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 theemployer was uninsured. A very important part of this new Act is that it removedauthority over industrial accidents from the civil court and placed authority withthe Industrial Accident Commission, which removed the use of juries from most ofthe industrial accident disputes. In 1915the Boynton Act had a major amendment where the word “injury” was replaced with”accident.” This change widened the scope of industrial accidents to include diseasescaused or aggravated by an employee’s work or working environment became the employer’sresponsibility.In1917, Legislature substantially revised the existing law of the Boynton Act to meetthe problems that arose from the Act. The revised Workmen’s Compensation Insuranceand Safety Act of 1917 expressed the full evolution of the workers’ compensationsystem and became effective January 1, 1918.
Even though the revised Acts liabilityfor compensation was imposed on employers “without regard to negligence,” it continuedto deny compensation for injuries from the employee’s intoxication and barred statutorybenefits of intentionally self-inflicted injuries.This caused the worker’s compensation awardto be reduced by fifty percent. If the employee was injured because of the employer’sserious 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 incases of gross negligence by employers.
Underthe Act, the only kind of civil court actionspermitted was against uninsured employersand third parties who injured employees. Generally, third parties are outside ofthe employment relationship. Since 1918, there have been numerous amendments tothe workers’ compensation law, some increased the benefits available to injuredworkers, and penalized illegal uninsured employers. In 1966, the Industrial AccidentCommission, who was responsible for the workers’ compensation program, was terminatedand replaced by the current Workers’ Compensation Appeals Board. In 1989 and 1993, California implemented major changes toa broad range of workers compensation issues. Some of these reforms include restructuringthe medical-legal process, limiting compensationof psychiatric and post-termination claims, increase in benefit payments for moderateand serious disabilities, vocational rehabilitation payments were capped, increasedfraud deterrence, and changes to the regulations of insurance rates.
On July 16, 1993, Governor Pete Wilson signed into law numerousbills that made many changes to California’s workers’ compensation system. Costsof workers’ compensation have increased toan estimated $11 billion per year and wereestimated to continue. Benefits to injured workers had not increased in many yearsand were low by national standards. The firstpart of the legislative reform took place in the spring of 1993 which dealt withescalating medical costs. Senate Bill 31 allowed Division of Workers’ Compensation(DWC) to create a realistic administrative fee schedule for medical-legal evaluationsof work injuries, which is one of the major costs in the system, in place of theinflation formula that has been used. It also set which types of fees can be chargedand required that the claim is contested beforea medical evaluation was allowed.
This reform also limited the number of evaluationsthat the injured worker was allowed in contested cases to two if they were representedby an attorney, and a Qualified Medical Evaluator selected from a panel given bythe Industrial Medical Council, for unrepresented workers. Because of this reformmedical costs paid by insured employers decreased from $395.5 million in 1991 toan estimated $64.5 million by 1994. One of the main goals of the reform was to improvebenefits for workers injured on the job. The maximum weekly benefit payment fortemporary disability rose from $336 a week to $499 per week. Because of these changes, the costs of workers compensation haveplummeted dramatically and had continued to over the years. Another reform took place in 2012 by Senate Bill 863 passedon August 31, 2012, and signed into law byGovernor Brown on September 18, 2012.
This bill made wide-ranging changes to California’sworker’s compensation system, including increasedbenefits to injured workers and cost-saving methods. Major areas changed includedan 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 effectiveimmediately. Thepurpose of these Acts and Reforms is to keepthe costs of industrial related injuries low and not be a burden on society, togive prompt limited compensation to injured employees, regardless of fault, tohelp increase industrial safety, and to protect the employer from tort liabilityfor their employees’ injuries. Even though these changes have saved employers andinsurance companies significant amounts of money, it has also made it harder forinjured workers to receive adequate and timely medical care due to the new IBR andIMR process.