Understanding Workers’ Compensation, Part I: History of Workers’ Compensation in the United States and Vermont

By Nelson S. Haas, M.D., July 2011
 
Introduction - Workers’ compensation claims involve procedural and ethical issues about which many doctors may be uninformed and marginally-concerned, and that are seldom covered during medical education.  However, knowing workers’ compensation statutes, rules, and presidents; applicable medical ethics; and methods for determining causation will prepare physicians for the role they must play in caring for workers’ compensation claimants. 
 
In the United States in the early 1900s, the employer was not assumed to be responsible for workplace injuries unless blatantly negligent.  Common law contained three defenses that shielded employers from liability: (1) the doctrine of contributory negligence, which asserted that no damage could be recovered by a worker from a workplace injury if the worker was at fault in any way; (2) the fellow servant rule, which precluded workers from recovering any damages from an employer if there was any contribution to the injury from a fellow employee; and (3) the assumption of risk, which assigned risk to the employee for workplace injuries and illness with the presumption that they were willing to assume the risks of a job when they took the job.1  With these defenses, employers may have been held liable for no more than one-eighth workplace injuries; but lawsuits were costly for both employer and employee; and when an employer was found culpable for an employee’s injury, the employee could sue for pain and suffering, and awards for damages could be large.1 
 
The remedy for this unpredictable and cumbersome system was a no-fault system under which employers gave up the three defenses described above and employees gave up their right to sue for pain and suffering.  Restitution was limited to payment of medical expenses and replacement wages for lost time.1, 2  In most states, administration of workers’ compensation claims was handled administratively rather than judicially. 
 
History of the Workers’ Compensation System in Vermont - The existent workers’ compensation laws were passed in the United States by individual states between 1911 and 1948.1  Vermont instituted its first workers’ compensation law in 1910,3 which focused on accidental death, and was full of restrictions preventing liberal application of the law; however, provided for payments when an accident was due to poor working conditions (“a defect in the condition of the ways [or] works… connected with the business of the employer”), and weakened the use of the fellow servant defense.3, 4  In 1912, the office of the State Factory Inspector was created5 and a State Board of Arbitration and Conciliation specified steps to prevent industrial disputes.6  In 1915, the Vermont legislature instituted the workers’ compensation statute that defines the core features of today’s workers’ compensation system, created an Industrial Accident Board. 

When the 1915 workers’ compensation act was passed, previous acts were repealed, and their acts terms were incorporated in an expanded law.7 

Vermont legislature amended its constitution in 1917 8 to allow expedited, administrative settlement of workers’ compensation claims, and limit the rights of both claimant and defendant. 
 
In 1917, the Industrial Accident Board was abolished and replaced by a single officer, a Commissioner of Industries,9, 10  who, in 1923, was placed with the Department of Public Service in far-reaching reorganization bill.11  In 1939, the Department of Industrial Relations formed with its removal from the Department of Public Service,12 and had administered laws related to one another, including inspection services, regulation of wages, apprentice training, mediation and arbitration, protection of women and children, and workmen’s compensation. 
 
The focus of Vermont’s 19103 and 19157 laws was on accidental death and injury.  In 1947, under pressure from the granite unions, a Commission to Study Occupational Diseases Hazards in Vermont was formed, primarily to study silicosis in granite workers 4, 13, 14; which was followed by a Division of Industrial Hygiene in the Department of Health in 194915 and an occupational disease act in 1951.16  The work of the Division of Industrial Hygiene was primarily limited to the granite industry, with secondary projects in foundries and asbestos works, with an emphasis on monitoring air quality and development of lung disease.4  In 1967, the Vermont legislature created the Department of Labor and Industry, which succeeded the Department of Industrial Relations and assumed enforcement responsibilities for occupational health and safety.17 
 
Since 1915, Vermont’s workers’ compensation system has expanded from its initial scope that was limited to accidental death and disability, to some occupational diseases in the 1940s, to today’s law that includes workplace accidents and “disease[s] that results from… conditions characteristic of… a particular trade, occupation, process, or employment, and to which an employee is not ordinarily subjected or exposed outside or away from the employment.”18  The 1915 law7 was also expanded for its original exclusion of “domestic servants or to employers who regularly employ… ten employees or less” to include all employees from all industries,19 although persons who legitimately work as independent contractors are not included. 
 
Common Features of United States Workers' Compensation Systems and Conclusion - Workers’ compensation laws vary among states, but have common elements that include:1, 2, 19

  • Assumption that workplace injuries and illness, in the absence of wanton negligence on the part of the employee, are the responsibility of the employer, including in cases were another employee, a customer, or equipment or material defect referable to a third-party supplier contributed to the employee’s injury;
  • An allowance that employers may dispute the fact of causation of or disability from a workplace injury or illness (the employer may dispute causation, but cannot shift blame to others);
  • Workers’ compensation benefits cover costs of most reasonable medical expenses and at least partially cover lost wages;
  • Workers’ compensation is the exclusive remedy for employees to recover damages from a workplace injury or illness, with the consequence that an employee cannot sue his or her employer for pain and suffering, nor can they pursue coworkers for damages in the absence of wanton negligence; and
  • All employers in covered industries must cover all their employees with workers’ compensation insurance. 

 
Under workers’ compensation laws, the employer no longer can use the defenses that an employee assumed the risk inherent in their occupation when they took a job, or the negligence of the employee or others as a defense against an employee’s claims; however, the employee must prove that any injury arose from work.1, 2, 20  In Vermont, the workers’ compensation system grew from a modest start of limited coverage and administration to a comprehensive system covering all workplace accidental injuries and diseases caused by work. 
 
References
 

  1. Kiselica D, Sibson B, Green-McKenzie.  Workers’ compensation: a historical review and description of a legal and social insurance system.  Clin occ env med 4(2):237-247.  2004. 
  2. Harris JS.  Workers’ compensation.  In A practical approach to occupational and environmental medicine, 2nd edition.  McCunney RJ, Brandt-Rauf PW, editors.  Pages 564-580.  Little, Brown and Company.  Boston.  1994. 
  3. Number 97 – An act relating to the employment of labor.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty-first biennial session 1910.  Pages 101-104.  1911. 
  4. Nuquist AE, Nuquist EW.  Labor.  Vermont state government and administration: an historical and descriptive study of the living past.  Pages 412-437.  Essex Publishing Company.  Essex Junction, Vermont.  1966. 
  5. Number 188 – Office of the State Factory Inspector.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty-second biennial session 1912.  Pages 241-243.  1913. 
  6. Number 190 – State Board of Arbitration and Conciliation.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty-second biennial session 1912.  Pages 275-292.  1913. 
  7. Number 164 – An act relating to compensation to employees for personal injury.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty-third biennial session 1915.  Pages 275-292.  1916. 
  8. Section 70 – Workers’ compensation.  Constitution of 1793, State of Vermont. 
  9. Number 171 – Commissioner of Industries.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty-fourth biennial session 1917.  Pages 190-191.  1918. 
  10. Number 172 – Commissioner of Industries.  Acts and resolves passed by the general assembly of the state of Vermont at the twenty- fourth biennial session 1917.  Pages 191-192.  1918. 
  11. Number 8 – Department of Public Service.  Acts and Resolves passed by the general assembly of the state of Vermont at the twenty-seventh biennial session 1923.  Pages 18, 20.  1924. 
  12. Number 11 – the Department of Industrial Relations formed.  Acts and Resolves passed by the general assembly of the state of Vermont at the thirty-fifth biennial session 1939.  1940. 
  13. Number 272 – Commission to Study Occupational Diseases Hazards in Vermont.  Acts and Resolves passed by the general assembly of the state of Vermont at the thirty-ninth biennial session 1947.  Page 368.  1948. 
  14. Number 299 – Commission to Study Occupational Diseases Hazards in Vermont.  Acts and Resolves passed by the general assembly of the state of Vermont at the thirty-ninth biennial session 1947.  Pages 385-386.  1948. 
  15. Number 185 – Division of Industrial Hygiene in the Department of Health.  Acts and Resolves passed by the general assembly of the state of Vermont at the forty-first biennial session 1949.  Pages 385-386.  1950. 
  16. Number 180 – Occupational disease act.  Acts and Resolves passed by the general assembly of the state of Vermont at the forty-second biennial session 1951.  Pages 261-267.  1952. 
  17. Marshall JH.  Business, labor, and industry: Department of Labor and Industry.  In Vermont state government since 1965.  Sherman M, editor.  University of Vermont.  Burlington, VT.  1999. 
  18. Vermont Statutes.  Title 21: Chapter 9: Employer's liability and workers' compensation. §601. Definitions. Paragraph (23).  http://www.leg.state.vt.us/statutes/sections.cfm?Title=21&Chapter=009.  Accessed December 12, 2010. 
  19. InRom: environmental and occupational medicine, 2nd edition.  Rom WN, editor.  Little, Brown and Company.  1992. 

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