105 Years of Workers’ Compensation
By Marc A. Perper
The year 2016 marks the 105th anniversary of the enactment of the first Workers’ Compensation law in the United States. Wisconsin passed the first work comp legislation, followed by Illinois the same year. A centennial commission was established to commemorate the 100th anniversary of work comp in America.
Workers’ compensation laws were the first major social legislation in the United States. They were controversial then, and they remain controversial now. Nonetheless, all 50 states, the District of Columbia and the federal government itself now have work comp laws. Mississippi was the 50th state to enact work comp legislation in 1948.
At the beginning of the 20th century, workers feared financial ruin from disabling injuries. At the same time, employers worried that assuming liability for work-related injuries would destroy their businesses. Before work comp laws took effect, an injured worker seeking compensation had to file a lawsuit against his or her employer in court.
Nineteenth and early 20th century laws imposed strict requirements before an injured worker could recover damages from an employer for industrial injuries. To be sure, the law required the employer to provide a safe workplace and safe tools; to warn of dangerous conditions; and to provide a sufficient number of qualified co-workers. However, in order to recover money damages for work injuries, an employee had to prove in court that the employer acted carelessly or negligently in creating an unsafe condition in the workplace. Worse yet, an employer could avoid liability merely by blaming the injured worker for his own carelessness, or attributing the injury to the negligence of a fellow servant, or arguing that the employee assumed all risk of a work injury by accepting the job in the first place.
The process was prolonged and uncertain, with large financial risks to both employee and employer. The high injury and death rates brought on by the Industrial Revolution, and growing dissatisfaction with the common law, led both labor and management to recognize that radical change was needed. In the United States and throughout the industrialized world, the laws governing employer liability for workplace injuries began to evolve.
The first workers’ compensation laws originated in Germany in 1884, with a compulsory system of accident insurance covering all employees in manufacturing, mining, and transportation. Similar laws soon passed in other European countries.
In the United States, work comp legislation was passed on a state-by-state basis. Most of the early laws covered only the most hazardous occupations and were frequently challenged as unconstitutional. Maryland passed the first state work comp law in 1902, which was restricted to fatal cases. In 1911, Wisconsin passed the first work comp law of general application that withstood legal challenges.
Here in Illinois, the impetus for work comp legislation occurred as a result of the Cherry Mine Disaster in 1909 — a disastrous mine fire in the tiny town of Cherry, Illinois that killed 259 men and boys. Because the mine was the only major employer in Cherry, the town’s remaining population after the fire was made up largely of destitute widows and children, almost all of whom became dependent upon charity. Soon thereafter, the Illinois General Assembly enacted the state’s first work comp law in 1911, becoming effective May 1, 1912.
New York State soon followed. As in Illinois, New York’s work comp legislation was prompted by an industrial disaster. In that case, it was the Triangle Shirtwaist Fire on March 25, 1911, when 146 garment workers, mostly immigrant women and girls from Eastern and Southern Europe, perished either from the fire itself or from jumping out of windows at fatal heights.
The workers at Triangle Shirtwaist were unable to escape the fire because the factory owners had locked the doors to the exits and fire escapes to prevent the women from taking cigarette breaks during their shifts. Women jumped from the ninth and tenth stories, as the ladders on the fire trucks could not reach these floors. Until the September 11, 2001 attack on the World Trade Center, the Triangle Shirtwaist Fire was the worst workplace disaster in New York history.
Years after the fire, the Triangle Shirtwaist factory’s owners faced criminal prosecution for having locked the doors in violation of safety standards. They were found guilty, but they were fined only $20 apiece. A civil lawsuit was also filed by the families of the 146 workers who died in the fire. Following a jury trial, each family received an award of just $75.
The Triangle Shirtwaist Fire led to the establishment of New York’s first workers’ compensation law, along with the first federal legislation dealing with workplace safety standards. The fire also spurred the growth of two legendary labor unions: the International Ladies Garment Workers Union and the Amalgamated Clothing Workers of America. Together, the ILGWU and the ACWA fought for better and safer working conditions in the clothing and needletrades industries.
Workers’ compensation laws contain two basic tradeoffs:
- Employees gave up their right to sue and potentially win large awards from their employers in exchange for more modest but prompt and certain compensation; and
- Employers gave up their common law defenses in exchange for monetary limits on their liabilities.
Workers’ compensation was established as a no-fault system and remains so today. The policy behind work comp laws is that the cost of work-related injuries or illnesses should be part of the cost of the employer’s product or service. The employer is better able to bear these costs than the injured worker, because employers can purchase workers’ compensation insurance to cover their losses.