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LECTURE 5
WORKERS COMPENSATION
Instructor: Engr. Beenish Akbar Khan
Iqra National University (INU)
Occupational Health Safety and
Environment
Btech Civil/Elect.
Department
7th Semester
Fall 2015

HISTORY
 In 1884, Otto von Bismarck enacted the first workers’
compensation law for all German workers.
 Wisconsin passed the first successful workers’
compensation law in the United States in 1911.
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 The workers’ compensation laws are designed to
compensate victims of workplace accidents by forcing
the employer to pay the workers money for injuries and
time lost.
 Workers’ compensation is considered ‘‘no-fault’’
insurance. No fault is admitted on the part of either the
employer or the employee when a claim is made.
 Prior to passage of these laws, the only recourse a worker
had was to sue the employer under civil law, a form of
common law.
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In early common law suits, employers successfully utilized
the following defenses:
 Assumption of risk:
Employees accept risks associated with the job and by
doing so, forfeit any right to collect compensation for
injuries.
 Contributory negligence:
Since the employees contributed to their own injuries, they
are not permitted to recover compensation.
 Fellow-servant rule:
The employer is not at fault because the accident was the
fault of another employee or other employees.
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 These three common law defenses were eliminated after
workers’ compensation laws were enacted by each state.
 Employers accepted this law because in order to collect
compensation, employees had to waive their rights to sue.
 Employees accepted the law because it eliminated the
requirement to sue the employer in order to collect
compensation.
 By 1948, every state had passed workers’ compensation
law.
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 When a worker is injured and stands to collect benefits,
that worker must first typically undergo a waiting period,
usually lasting from 3 to 14 days.
 Benefits may or may not be paid retroactively to the first
day of lost work and wages.
 Once the benefits begin, they are limited to two-thirds of
the worker’s wages or capped at a given dollar amount
per month depending on the state.
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 Benefits extend for a limited period of time and amount to
a maximum amount of money.
 If workers were permitted to receive benefits equal to
their wages, however, there would be a strong incentive
not to return to work.
 Even at two-thirds wages, some employees may malinger
in order to continue to receive benefits without working.
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Injuries are categorized in one of the following ways:
• Partial:
When the employee can still work but is unable to perform
all duties of the job due to the injury, as is often the case
with a broken finger or a severed toe.
• Total:
When the employee is unable to work or perform
substantial duties on the job, as is often the case with a
severe back injury or blindness.
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Injuries are categorized in one of the following ways:
• Temporary:
When the employee is expected to fully recover, as is the
case with a broken limb.
• Permanent:
When the employee will suffer the effects of the injury for
life, as is the case with a severed limb, blindness, or
permanent hearing loss.
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1. Retraining Incentive Benefits:
It is for employees who may have specific injuries. These
benefits are paid for a limited period of time to aid the injured in
pursuing additional education or training.
2. Vocational Rehabilitation Services:
It is offered to employees who are eligible for permanent total
disability benefits and actively participate in a vocational
rehabilitation program.
Survivors of employees killed in industrial accidents may be
entitled to their benefits as well.
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