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Workmen’s Compensation
in the United States
A General Appraisal
Court Proceedings
Federal Legislation
Occupational Diseases
Medical Services
Accident Prevention
Problems of Administration
Rehabilitation
Bulletin No. 1149
UNITED STATES DEPARTMENT OF LABOR
lames P. Mitchell, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, C om m issioner
Workmen’s Compensation
in the United States
A Genera] Appraisal
Court Proceedings
Federal Legislation
Occupational Diseases
Medical Services
Accident Prevention
Problems of Administration
Rehabilitation
Bulletin No. 1149
UNITED STATES DEPARTMENT OF LABOR
James P. Mitchell, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Com m issioner
For sale by the Superintendent o f D ocum ents, U. S. Government Printing Office
W ashington 25, D . C . .......................................................- - - - - Price 30 cents
Letter of Transmittal
U n it e d St a t e s D e p a r t m e n t o f L a b o r ,
B u r e a u o f L a b o r S t a t is t ic s ,
The Secretary of Labor:
W ashington , D . C ., F ebruary 12, 1954-
I have the honor to transmit herewith a bulletin on workmen’s compensation
in the United States. The separate chapters appeared originally as eight
articles in the Monthly Labor Review during 1953.
Workmen’s compensation is our oldest form of social-security legislation.
Like unemployment insurance, its purpose is to provide compensation for
wage loss due to causes not directly within the control of individual workers.
It is the only field of worker-benefit legislation in which State jurisdictions
operate completely independent of the Federal Government.
The several parts are intended as an informed appraisal by competent
observers of the status of the laws and their administration. They do not
comprise a comprehensive survey of the field, an endeavor sorely needed. The
contents of the present bulletin were limited to an appraisal of legislative and
administrative progress, appeals, Federal legislation, occupational diseases,
medical services, accident prevention, problems of administration, and rehabili
tation.
The Bureau is grateful to the several authors for their useful contributions
to the subject.
Hon. J a m e s P. M i t c h e l l ,
E w an C lague,
Comm issioner.
Secretary o j Labor .
Contents
I—An Appraisal____________________________________________
II—Court Proceedings________________________________________
III— Federal Legislation_____________________________________
IV— Occupational Diseases__________________
V—Medical Services_________________________________________
VI—Accident Prevention_____________
VII—Problems of Administration_______________________________
VIII—Rehabilitation___________________________
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40
Workmen’s Compensation in the United States
I — A n A ppraisal
M ax D. K ossoris *
40 years have elapsed since the first
State workmen’s compensation act was adopted
in the United States. Since then, every State and
Territory of the United States has adopted such
legislation. The last State, Mississippi, passed
its act in 1948.
The impetus for this type of legislation was
public dissatisfaction with the hardship, delay,
and uncertainty entailed in court procedures when
a worker was injured or killed at his job. The
rapid mechanization of our industrial system was
accompanied by a widespread disregard for the
safety and health of the workers involved—
largely because of the ample labor supply. The
injured workers seldom were able to afford the
cost of litigation. Even if undertaken, damage
suits frequently were unsuccessful or resulted in
inadequate judgments. As a result, workers and
their dependents, after exhausting their savings,
often had to obtain assistance from private or
public charities.
M ore t h a n
By the first decade of the 20th century, how
ever, influential sections of the public had become
thoroughly aroused over the situation and looked
around for possible remedies. Applicable social
legislation was found in Germany and England.
Germany under Bismarck, to head off social
discontent on the part of the German worker, had
adopted a compensation act in 1884. Under this
♦ Of the Bureau’s Western Regional Office (San Francisco).
law, a worker who was injured in the course of his
employment was automatically paid benefits in
lieu of wage loss, without following the former
legal procedure of proving that his employer was
at fault. The law was compulsory for employers
and employees alike. Employers insured their
liabilities for benefit payments and medical
services through nonprofit mutual insurance funds.
By 1897, the English had adopted an act.
Here too, injured workers were entitled to benefits
without having to prove negligence or fault on
the part of their employers. But the law was
elective rather than compulsory, and insurance
was a matter of private choice. In effect, the
law established a legal principle, but did not pro
vide a separate and distinct administrative
mechanism. If a worker was dissatisfied with the
treatment meted out by an employer, he could
always take his case to court.
Lack of Uniformity in Early Laws
The early attempts at State legislation in this
country were based in large measure on the laws,
administrative practices, and experiences of these
two countries. But such examples were supple
mented by special surveys in New York, Michigan,
Pennsylvania, Wisconsin, and Illinois—to name
only the more heavily industrialized States—to
determine the scope of industrial injuries, the
1
2
WORKMEN’S COMPENSATION IN THE UNITED STATES
amounts paid to workers under employers’ lia
bility laws, the amounts paid in premiums for
such insurance, the economic background of
injured workers and their families, what happened
to them as a result of injury to the breadwinners,
etc.1
The framers of the new legislation were search
ing for remedial measures that would suit the
particular situations in their States—frequently
the problem was how to circumvent obstacles or
prohibitions in the State constitutions or statutes.
They realized that many of their solutions were
makeshifts, pending the future removal of some
legal barrier, but they hoped that in time both the
makeshifts and the experimental devices would
give way to sound and practical provisions and
administrative practices. These hopes were sel
dom realized. No substantial modification in the
original diverse compensation legislation was
made during the intervening years. From about
1915 on, the compensation acts adopted by
successive States took their form through emula
tion, modified by local considerations and the
influence of the forces favoring them.
As a result, about half of the State laws are
compulsory; the others are elective. Under some
laws in the latter group, an employer and all his
workers are presumed to be covered by the law
unless the employer—and in some States, the
worker himself—individually rejects it; and under
others, an employer must positively elect to be
covered by the workmen’s compensation act so as
not to come under the employers’ liability laws
with the common-law defenses abrogated. Some
laws are in part compulsory and in part elective.
Insurance is handled in three ways: in some States,
through an exclusive State fund; in others, by
private carriers; and in another group, by State
funds competing actively with private carriers
and operating under the same regulations.
The great variation in administrative practices
in the various States is difficult to explain. One
of the major purposes of the annual meetings of
industrial accident commissioners is the exchange
of information which would permit any State to
benefit from progress in other States. Undoubt
edly, many administrators learn much through
i Pioneer studies made by the Commissioner of Labor were Workmen's
Insurance and Benefit Funds in United States (23rd Annual Report, Bureau
of Labor Statistics, 1908); and Workmen's Insurance and Compensation
Systems in Europe (24th Annual Report, Bureau of Labor Statistics, 1909).
this device, although some administrators seem
to be much more concerned than others with
adapting the experience of other States. Still
other administrators who wanted to introduce
changes for better administration appear to have
found the opposition too formidable to risk the
effort.
After working in the compensation field for
nearly two decades, one authority sadly concluded:
“If, in the field of our mechanical contrivances,
the same adherence to old models had prevailed
as that which is found in respect to social arrange
ments, we should now be driving around in ox
carts.” 2*
Currently, there is little likelihood of eliminating
these legislative diversities. A Federal act could
hardly be more than a compromise between the
more advanced and the less perfected State laws.
Moreover, it is extremely unlikely that States
would consent to relinquish a jurisdiction so
deeply embedded in State operations.
Administration
A law can only be as good as its administration.
Poor administration can cripple the best of laws.
Conversely, competent administrators can get
reasonably good results with poor laws.
Outstanding examples of good workmen’s com
pensation administration are found where atten
tion is paid to the requirements for competent
and experienced administrators. In some States,
however, this complex and intricate piece of
legislation is administered by persons who do not
have the necessary qualifications. Some are ap
pointees subject to the vicissitudes of adminis
trative changes. This is remedied in part by
appointments for overlapping terms, which pre
serve some continuity. But experience has shown
that even this device can be subject to political
influence.
Objectives of A dm inistration. The primary pur
poses of a workmen’s compensation act are to pro
vide prompt benefit payments to an injured
worker, to provide adequate and competent
medical services, to rehabilitate the worker as
*The Development of Workmen's Compensation Claims Administration
in the United States and Canada, by Marshall Dawson, issued by the Inter
national Association of Industrial Accident Boards and Commissions, 1951
(p. 39).
AN APPRAISAL
promptly as possible for return to gainful employ
ment, and to work for accident prevention. The
primary objective of administration is to make
sure that the law is observed and that an injured
worker gets everything to which the law entitles
him. For no matter how liberal the law, he will
be worse off for having been injured. From the
employers' viewpoint, a compensation act provides
a definite schedule of liability in contrast to the
uncertainties prevailing under the procedure of
liability settlements.
One of the greatest problems of workmen's com
pensation administration is the frequent failure to
act on these premises. It is important for the ad
ministrative agency to follow an injury from the
first report of injury to the final closing of the case.
Some States, for example, not only check the
accuracy of total payments but also require signed
receipts for every compensation payment to be
filed with the State commission. Some require
the filing of a final receipt which both spells out
the total amount paid and gives a breakdown of
what the payment was for, thus permitting a
positive check on the accuracy of the payment.
But frequently the legislation itself requires the
administrator to operate on the presumption that
it is the responsibility of each injured person to
look after his rights, and that it is the primary
function of the administrative body to adjudicate
contested claims.
No final reports as to the total amount paid or
as to the method of computation are required in
many States. It is obvious, however, that most
workers are not familiar with the provisions of
their workmen's compensation act. In only a few
States does the administration get in touch with
the injured worker soon after the injury has been
reported to advise him of his rights—i. e., about
benefits, medical services, the advice available at
the commission's office, etc. Too many States
do not insist on prompt reporting of accidents by
employers, prompt payments of compensation
benefits, and on final reports in which employers
or their insurance carriers spell out the amounts
paid to the injured workers for their disabilities
and how these amounts were computed.
Some jurisdictions
do not know how much compensation has been
paid by employers and insurance carriers, and for
M easurem ent oj Performance.
3
what purposes payments were made. Some States
follow through on fatal and serious permanent
injuries, but do not obtain information on the end
results of most of the injuries reported to them.
Many administrators see no need for detailed
administrative or statistical information. A count
of the number of cases reported during the year
and of the number of decisions made in contested
cases, in their opinion, suffices for statistical
records.
How promptly are workers paid? Do they get
what the law says they should? To what extent
does the compensation rate, usually limited by a
maximum, actually offset lost wages? How much
is paid for medical services? How many cases
are contested? Appealed? What issues cause
most trouble? Where are the bottlenecks in the
“ judicial" process of hearing cases and making
decisions?
Only a few States make a systematic effort to
find reliable answers to these questions through
reliable statistics. Wisconsin, for example, pub
lishes statistics on promptness of first payments.
The publicity of these tabulations, in which
insurance carriers are identified by name and
ranked according to promptness of performance,
is credited by Wisconsin administrators for a very
beneficial effect. In Illinois, routine checks of
the accuracy of payments, made on the basis of
reports filed by employers, insurance carriers, and
physicians, have resulted in additional payments
of many thousands of dollars yearly in order to
meet the benefits prescribed by law. Statistical
studies in Illinois have shown that compensation
payments actually fell far below the two-thirds
wage offset which the law provided. Statistics
available from a few States have shown that the
cost of medical care consumed an increasingly
larger share of compensation costs; this infor
mation has raised serious questions about the
provisions in many State acts covering medical
fees and limiting medical services.
Again, when issues which cause much trouble in
contested cases are clearly identified, clarifying
language can be inserted in the act itself and
thereby remove the cause for litigation. Ad
ministrative statistics revealing bottlenecks per
mit an administrator to pin-point his difficulties
and provide the necessary remedies.
Few States have good yardsticks of performance.
4
WORKMEN’S COMPENSATION IN THE UNITED STATES
waiting period—usually 3 to 7 days—so that
injuries of short duration are not compensated.
Furthermore, benefits are payable for only a
portion of wages lost. With few exceptions, that
proportion varies between 50 and 66% percent
The survey revealed that adequate statistics on
and is limited by a fixed maximum.
workmen’s compensation administration are the
exception rather than the rule . . . Very few com
An examination of our annual work-injury
missions . . . have available details on the frequency
experience
in all classes of employment reveals
and cost of various types of medical services such as
that
out
of
about
2 million disabling work injuries,
hospitalization, artificial members, vocational rehabil
about
95
percent
fall in the temporary-total dis
itation, etc. . . . Detailed statistics of compensation
ability
category—i.
e., workers are disabled
and medical costs are considered of great value, not
only for day-to-day administration, but for evaluating
beyond the day on which the injury occurred,
the cost of proposed legislative changes and for the
but are able to return to work subsequently
promotion of accident prevention . . . Most States
without any permanent impairment. About onedo not have statistics on the promptness of reporting
half percent of the injury total consists of fatalities;
injuries and of the first payment of compensation . . .
and the remainder, about 4% percent, are perma
few commissions have exact figures on the percentage
of contested and uncontested cases . . . The present
nent impairments, ranging all the way from the
survey indicated that not much progress has been
loss
of the first digit of a finger to complete
made during the past 10 years in developing the
permanent
physical disability. Although fatalities
statistical facts concerning contested cases . . . While
and
permanent
disabilities together account for
many jurisdictions have some statistics on the volume
only about 5 percent of the injury total, they
of contested claims, the committee found that very
few keep statistics on issues involved, hearings
account for between one-third to one-half of the
required, place of hearings, attorney fees, carriers
total benefits paid under our workmen’s compen
involved, and the time intervals in the processing
sation
laws.
of cases.
How
is a worker’s life worth? What is
Oddly enough, there is no strong pressure for the worthmuch
of
an
a leg, a finger, a toe? Almost
a different attitude on the part of the major universally in arm,
the
State compensation acts, a
groups—employers and workers—involved in this fixed schedule determines
amounts payable
process. Many employers have come to consider for each—not in terms of the
so
many
but
the fact of carrying workmen’s compensation in numbers of weeks of benefits, at a dollars,
weekly
rate
a limitation on their responsibilities for work in related to the worker’s wage. Rarely are these
juries. Anything beyond that is the concern of schedules adjusted to the occupation, age, and
the insurance carrier. And labor leaders often working-life expectancy of the injured worker.
seem to be content if they have succeeded in get
The early framers of compensation laws at
ting a compensation act on the statute books, and tempted,
establishing benefit rates, to relate
to bargain periodically with legislators (and in death to inaverage
working-life expectancy, and
some States with employers) for changes in benefit permanent-partial impairments
total physical
provisions—a few more weeks of benefits or a work capacity. This is reflected tospecifically
in the
better maximum benefit rate. Too often they first attempts at the standardization of industrial
overlook the desirability of able and conscientious accident statistics. By 1920, a committee had es
administration.
tablished a schedule relating the loss of various
body parts to permanent total disability.4 The
The Benefit Structure
of an arm above the elbow, for
Compensation benefits are paid in lieu of wages dismemberment
example,
was
rated
75 percent of permanentlost because of disabling work injuries. To total disability, with atdeath,
at 100 per
discourage malingering or “false claims,” com cent. The loss of the arm atof orcourse,
below
the elbow
pensation laws generally provide for a brief was rated at 60 percent, a hand at 50 percent,
any
8 Workmen’s Compensation Problems, Bulletin No. 142, Bureau of Labor one finger at 5 percent, with substantially higher
The report of the Committee on Statistics of the
International Association of Industrial Accident
Boards and Commissions, 36th Annual Conven
tion, 1950,3 contains this language:
Standards, U. S. Department of Labor (pp. 203-209). This report also con
tains a good discussion of the use of administrative statistics by the Cali
fornia administration.
4 Standardization of Industrial Accident Statistics, Bulletin No. 276,
Bureau of Labor Statistics, U. S. Department of Labor, 1920.
AN APPRAISAL
rates for combinations of fingers; one eye at 30
percent, both eyes, 100 percent; loss of hearing in
one ear, 10 percent, in both ears, 50 percent; and
so on.
A life was evaluated at 6,000 days, which was
then translated to 20 years of working-life expect
ancy at the average age of the worker fatally in
jured. (This figure was taken from European ex
periences, as no such data were available in the
United States.)
The framers of early workmen’s compensation
legislation did not expect their early framework to
remain unchanged during the next half century.
They regarded much of it as experimental, and
hoped that experience would lead to subsequent
improvements. It is amazing, however, to find
that so little basic change has occurred, and that
so many of the early objectives have become
obscured.
The extent to which wages are offset by com
pensation, i. e., the percentage of wages payable
as benefits, has changed little over the years. But
the maximum limits, which in the early years
seemed quite reasonable, have lagged far behind
increased earnings—in spite of some adjustments—
so that by now the proportion of lost wages offset
by compensation benefits has shrunk to less than
one-half. In a few States, maximum weekly ben
efit payments for a married worker with children
may exceed $40, but most States specify a maxi
mum between $25 and $30.6 Weekly earnings in
manufacturing employment averaged above $66
during 1952. At 66% percent, this average calls
for a weekly rate of better than $43, regardless of
marital status or dependents. Only Alaska and
Arizona permit as much as this for a single worker,
and only 5 more (Massachusetts, North Dakota,
Washington, Oregon, and Wyoming) allow $40 or
slightly more for a worker with a large number of
dependents. In more than half of the States, the
weekly maximum benefit for a worker is $30 or
less. Consequently, $35 or more of the current
weekly wage loss remains uncompensated. The
$30 maximum, it will be noted, restores two-thirds
of the lost wages only if this wage was $45.
There is no question, therefore, but that today’s
injured workers suffer a much greater wage loss
than the early lawmakers contemplated.
8 Benefits and other provisions are those in effect at the end of 1952.
5
Perm anent D isa b ility .
In determining the amounts
to be paid for a man’s life, arm, leg, eye, etc., a
comparison of State compensation laws reveals a
bewildering variety of provisions. Only one State
attempts to relate for all injured workers the de
gree of permanent impairment to permanent-total
disability, taking into account the worker’s age,
occupation, and the extent to which the impair
ment probably will limit future earning power.
But guidance is hindered because of the lack of
comprehensive survey data on worker experience.
The schedules of specific losses in the States
vary greatly and may have no relation to changes
in occupations forced by a permanent impairment
or to the injured employee’s working-life expect
ancy. If an 18-year-old boy, earning $50 a week,
loses an arm in a certain State, he is entitled to no
more than $27 a week for a period of 250 weeks—
slightly less than 5 years—for a total of $6,750.
No attention is paid to a potentially higher earning
capacity in later life if the youth had remained
able-bodied. In the same State, a highly skilled
mechanic—35 years of age, earning $100 a week,
and with a wife and three children—who has the
misfortune to suffer the same injury, also receives
the same weekly benefit and total aggregate pay
ment of $6,750. The fact that he is completely
unfit to continue in his occupation and in all
probability will have to drop to a less remunera
tive activity, is supposed to be compensated by
the 250 weeks of compensation. And finally, if a
man 70 years of age, earning $50 a week as a watch
man, should suffer the same impairment, he too
will receive the same weekly benefit and total
amount.
In Colorado, loss of a hand is worth 104 weeks
of compensation—in New Jersey, 230 weeks. A
New Jersey hand, in fact, is worth more than an
entire arm in Alabama and 24 other States.6 The
value of an arm varies between 500 weeks of com
pensation in Wisconsin to 150 weeks in Maine. In
only 6 States does it rate 300 weeks or more. A
leg is worth 500 weeks in Wisconsin, 300 weeks in
Rhode Island—but only 150 weeks in Maine, 160
in South Dakota, and 170 in Vermont. In Oregon,
complete loss of hearing is worth 350 weeks; in
6 Colorado, Delaware, Florida, Georgia, Illinois, Kansas, Kentucky,
Louisiana, Maine, Maryland, Mississippi, Nebraska, New Hampshire,
New Mexico, North Carolina, Ohio, Pennsylvania, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, and Virginia.
6
WORKMEN’S COMPENSATION IN THE UNITED STATES
Arizona, 260; and in Maine, as little as 65. And
15 States do not require additional compensation
for the healing period when the injury calls for a
“ schedule” benefit, i. e., payment for a permanent
impairment. In these States, as a rule, the benefit
payments for temporary disability are subtracted
from the amount due for the permanent impair
ment.
Death . Similar divergence in compensation bene
fits is shown in death cases. Many State laws
provide, in addition to payments to widows, for
increased benefits to minor children. Others
simply specify a certain number of weeks of bene
fits, and many of them deduct from the total
allowable maximum any payments already made
to the worker for disability prior to death for the
same injury—so that the widow and children get
less than the specified maximum. Only 7 States
provide for payments to a widow for life, or until
remarriage, and for minor children until a specified
age is reached.
In about two-thirds of the States, a worker’s
life is worth $10,000 (about 2% years’ earnings)
or less. The widow and four children of a worker
who earned $75 a week at the time he was killed
will receive $25 a week in Kansas up to a total of
$6,000. A widow in Indiana, under the same
circumstances, would be paid $10,000, but minus
the benefits paid before her husband’s death.
In Ohio, the death benefits would amount to
$9,000; in Tennessee, $7,500; Kentucky, $9,500;
Virginia, $7,500; Vermont, $6,500; and in Maine,
$6,000. But, if the widow remarries, she forfeits
all or most of the unpaid benefits. Consequently,
young widows often receive less than the specified
maximum.
Additional amounts for burial expenses vary
from no provision at all in Oklahoma and $150
in Arizona, Colorado, and Florida, to $400 in
California, Michigan, Missouri, Ohio, and New
York, and to $500 in Connecticut and Khode
Island.
M edical Benefits . Similar wide variations are
found in the State provisions for medical care and,
even more glaringly, in those for the rehabilitation
of permanently impaired workers. As already
pointed out, prompt and adequate medical care
is one of the cornerstones of the philosophy of
workmen’s compensation. Aside from the hu
mane aspects, adequate and competent medical
services may get a man back to his job more
promptly if he is temporarily disabled, and may
minimize permanent impairment—thereby reduc
ing the amounts of compensation benefits that
otherwise would be payable. The growing recog
nition of this fact has been the most striking
improvement over the early statutory provisions
which narrowly restricted medical benefits.
Only 12 States, Hawaii, and Puerto Rico, how
ever, have specific provisions in the law calling
for unlimited hospital and medical benefits for an
injured worker. In 19 additional States, the
administrative authority is sufficiently broad to
permit virtually unlimited medical attention.
But, in certain others, the additional amount of
benefits that can be extended at the discretion of
the administration is limited.
In 17 States and Alaska, however, medical bene
fits are strictly limited. Kentucky provides a
maximum as high as $2,500, but in most of the
other States, it falls below $1,000. Alabama, for
example, allows 90 days or $500, and Colorado,
6 months or $1,000. Louisiana has a flat $1,000
limit, and South Dakota provides for 20 weeks
or $300 and hospital costs not to exceed $700.
Although employers and insurance carriers
often exceed these maximum allowances—partly
because to do so is good public and industrial
relations, and partly because better medical care
may minimize the extent of permanent impair
ment—many others limit their expenditures to
the requirements of the law. Under such condi
tions, it is not hard to visualize the plight of the
worker who must defray additional expenses out
of compensation benefits which offset less than
half of his normal earnings.
R ehabilitation . Only about a third of the State
workmen’s compensation acts contain specific pro
visions for tiding a permanently impaired worker
over a period of vocational rehabilitation. Some
statutes, such as the one for Arizona, permit the
State commission to make any awards that may
be necessary to rehabilitate the injured worker for
useful employment. The Wisconsin act permits
full compensation payments up to 40 weeks during
rehabilitation training. (Such payments are in
addition to the scheduled amounts payable for the
impairment.) Under the Wisconsin law, payment
AN APPRAISAL
for|the necessary maintenance and travel costs is
also permitted if the training is away from the
worker’s place of residence. Further, compensa
tion payments are not limited as to time while the
worker is being trained in the use of artificial
members. But, as a rule, State laws providing for
benefits during the rehabilitation period impose
specific, and less liberal, maximum limits on the
amount of compensation or period of weeks.
Arkansas, for example, allows up to $400; Minne
sota, 25 weeks; Mississippi, $10 a week for not
more than 52 weeks; Ohio, $20 a week for not
more than 52 weeks; and so forth.
Rhode Island for some years has provided a
curative center to make available to injured workers
“all possible modem curative treatment and
methods”—following the model established some
years earlier in some of the Canadian Provinces.
In 1951, Ohio authorized its industrial commission
to advance up to $300,000 to Ohio State University
to establish a rehabilitation center which is now in
operation. In addition, Oregon, Washington, and
Puerto Rico have such systems.
In two-thirds of the States—including such
highly important industrial States as Illinois,
Pennsylvania, Indiana, and California—the task
of rehabilitating a permanently disabled worker is
left to public or private agencies. In some of
them, rehabilitation cases may be referred by the
workmen’s compensation administration to the
appropriate agency as a matter of routine. In
many of them, however, it is up to the worker—or
a charity agency—to make this connection.
Here is an example of a service which a work
men’s compensation administrative agency can
perform—a service in keeping both with the original
concept of rehabilitating workers to gainful em
ployment and the modern concept of encouraging
self-support rather than “welfare support.”
Accident Prevention
Advocates of early compensation acts argued
that automatic payments to injured workers would
create a greater safety consciousness on the part
of employers. They believed that self-interest
would prompt an employer to prevent accidents,
because, by doing so, he would save money. Sub
sequent developments over more than 40 years
have demonstrated that—in the main—this
anticipation has not been fully realized. A sub
285758-54- -2
7
stantial number of large employers, over the
years, have developed comprehensive safety
programs. But workmen’s compensation costs
have been only one of several considerations.
Relatively few plants have adequate safety
programs. While estimates of the number of
workers protected by such organized efforts
necessarily are hardly more than informed guesses,
it is believed that about two-thirds of all workers
are not subject to planned, organized safety efforts.
As a consequence, our injury toll in industry during
1952 was over 2 million disabling injuries, with an
estimated direct economic loss of 206 million mandays—enough to provide full-time employment
for 687,000 persons for a year.
Most workmen’s compensation administrators
readily agree that accident prevention is better
than compensation. But relatively few can do
much about it. Some have no such authority.
Others lack the necessary funds. Still others
believe that safety is not their concern.
As far back as 1912, the compensation com
missioners of the State of Washington, in their
first annual report,7 specified that one of the
objectives of the Washington act was to “supplant
concealment of fault in accidents by a spirit of
frank study of causes, resulting in good will
between employer and operative, lessening the
number of preventable accidents, and reducing the
cost of suffering thereunder.”
Some of the States have carried out this aim
creditably, especially where workmen’s compensa
tion and safety, along with other related functions,
are effectively integrated into one administrative
body under one administrative head. In other
States, the two functions are assigned, by law, to
two agencies separately enforcing the workmen’s
compensation act and the State’s minimum re
quirements for industrial safety and health. As a
rule, the safety or factory inspection agency re
ceives no routine reports of work injuries from
employers. Hence, many State factory inspectors
routinely cover their assigned territories without
regard to—and often not knowing—whether or not
they are spending their time in establishments
where they could do the most good.
Some States have arranged for an exchange of
information between the compensation agency and
* First Annual Report, Industrial Insurance Department, State of Wash
ington, 1912 (p. 6).
8
WORKMEN’S COMPENSATION IN THE UNITED STATES
the safety arm. In some jurisdictions, the acci
dent reports flow routinely through the safety
agency, either before or after they have been
handled for compensation purposes; and in others,
the workmen’s compensation agency sends to the
safety group reports of serious accidents which
employers have filed with the compensation com
mission. But rarely is there an attempt to point
to the persistent and serious violations of accepted
safety practices.
To the lack of systematic coordination and
inadequate staffing must be added another and
extremely important factor: few of the States
obtain accident-cause information adequate for a
guided, selective prevention effort.
The problem of how to obtain such information
has long bothered various compensation adminis
trators. One solution attempted in recent years
was to add questions relating to accident causes to
the compensation reports. This additional in
formation dealt with these elementary facts: (1)
What was done unsafely so as to precipitate the
accident? (2) What was unsafe in the work
environment? (3) What can be done to prevent
a recurrence of the accident? (4) What has been
done?
Such data on specific plants or industries—
and, if possible, coupled with accident costs—
would help safety men do a selective safety job
Probably no compensation administrators dis
avow interest in accident prevention. But a
large number insist that someone else do the job.
The fact that the compensation administration
can assist accident prevention substantially—
regardless of where in State government respon
sibility lies—often is overlooked.
Outlook
The history of workmen’s compensation devel
opment in the States does not encourage an op
timistic view of future growth. In many States,
the basic statute is antiquated, holding fast
(with some exceptions) to the more limited ob
jectives of the experimental legislation of the
early pioneers in this field. The laws, and the
administration of them, generally have not grown
with a more enlightened social point of view.
Too many administrators continue to serve only
as adjudicators of contested claims and—again
with outstanding exceptions—are handicapped by
the limited tenure of their appointments.
Few States have the necessary data to permit
an adequate evaluation of what the law accom
plishes, where it falls short, and what changes are
necessary to keep it at socially desirable levels.
Few States are in a position to gauge what, if
any, additional costs would be involved in liberal
izing the benefit provisions of their acts—both in
terms of benefits to offset wage loss and more
liberal provisions for medical care and hospitali
zation. Few States are concerned with the
rehabilitation of permanently impaired workers,
and fewer still, with an active part in accident
prevention.
There is a need today for stronger public con
cern with the inadequacies of workmen’s com
pensation legislation and its administration. In
spite of the tremendous forward strides in other
social and economic areas, our compensation
legislation and administration, on the whole, lag
far behind.
II— Court P roceed in g s
W arren
H.
P il l s b u r y *
With few exceptions, workmen’s compensation
jurisdictions in the United States have provisions
for some form of appeal to the courts from the
decisions of the compensation administrator or
board. Until 1946, there was no provision for
appeals from decisions of the present Bureau of
Employees’ Compensation in the U. S. Depart
ment of Labor.1 In that year, however, in the
course of an administrative reorganization, an
Employees’ Compensation Appeals Board was
created to review the compensation decisions of
the Bureau on applications of injured employees.
The decisions of this Board are not appealable to
the courts. In Nevada, the law makes no pro
vision for court appeals. However, in a few
instances, the Nevada Industrial Commission
has been sued in the courts. The Ohio law has
no provision for court appeals as to occupational
diseases. The workmen’s compensation boards
of the Canadian Provinces supposedly are exempt
from any appellate review; however, two recent
decisions of the Canadian courts have held that
a limited right of review exists in the courts.
The scope2 of the review seems broad enough to
include most questions of law which may be in
volved in the Boards’ decision.
The types of judicial review existing in the
United States vary. In some jurisdictions, pro-
vision is made for a right of trial de novo (com
parable to a rehearing) before a judge or jury in a
trial court. In others, the appeal may be by
bill of equity in a trial court to enjoin enforce
ment of a compensation award or by petition for
certiorari (writ of review) from such trial court.
The appeal is to an appellate court only, in some
States, and may be by certiorari.
Some of the monopolistic State-fund States pro
vide for appeal to a trial court, with trial by jury,
when the board denies compensation. The case
is then retried in court. The Ohio law is of this
type for accidental injuries. The justification
offered for this procedure is that the compensation
board is in substantially the same position as
that of a private insurance company—its first
interest allegedly being the protection of the
funds contributed by the employers and dis
tributed by it—and that, therefore, the injured
worker should have a right of recourse to an
impartial court if his claim is denied because the
paying officer cannot at the same time be the
impartial adjudicator.
In the States in which employers insure with
private insurance companies, with or without
competitive State funds, the judicial review pro
vided is usually by petition for certiorari or equiv
alent proceedings, filed exclusively in an appellate
court in many cases.3 In general, this review is
*Deputy Commissioner, Bureau of Employees’ Compensation, U. S.
Department of Labor.
1 Formerly, the United States Employees’ Compensation Commission, and
later the Bureau of Employees’ Compensation, Federal Security Agency.
a In re Manitoba Workmen’s Compensation Board and Canadian Pacific
Railway (1950), 58 Manitoba Reports, p. 16; in re Canadian Labor Relations
Board (1951), 3 Dominion Law Reports, p. 162.
3New York, Wisconsin, and California are typical examples.
Types of Judicial Review
9
10
WORKMEN’S COMPENSATION IN THE UNITED STATES
limited to consideration of the record made before
the compensation board: it is confined to ques
tions of law, but includes the question of whether
there is any substantial evidence to support the
Board's findings. The case is not retried in the
appellate court nor does the court weigh the
evidence, when it is conflicting, to determine
whether it would have reached the same result
on the same evidence.
The exercise of this power of review is discre
tionary in the court, in some States such as Cali
fornia. Proceedings commence with the filing of
a petition. The court then determines whether
it will hear the case or deny the petition outright,
depending upon the documents submitted. If the
court grants the petition, the Board then files its
record and the case is set for argument.
Under the Federal Longshoremen's and Harbor
Workers' Compensation Act and its extensions,
known as the Defense Bases Compensation Acts,
the procedure differs in form but is very similar
in substance. It follows a type of judicial review
provided for many Federal administrative bodies
and is initiated by the filing of a bill in equity in
the United States district court for an injunction
to restrain enforcement of the award or determina
tion of the Deputy Commissioner. The object of
the proceeding is to determine whether the award
or the denial of compensation benefits is “in
accordance with law." The powers of the district
court, the manner in which they are exercised,
and the scope of the review are not prescribed by
statute; nevertheless, in substance, the procedure
of the State appellate courts in certiorari proceed
ings is very closely followed. The hearing record
of the trial officer—the Deputy Commissioner of
the Bureau of Employees' Compensation—is filed
in court with his answer to the complaint. Except
in a few classes of cases, in which the United States
Supreme Court4 has permitted trial de novo
(which has largely fallen into disuse), the hearing
is based upon the Deputy Commissioner's record.
The court in its decision may either enjoin the
enforcement of the award, dismiss the bill for
injunction and thereby affirm the Deputy Com
missioner's holding, or may remand the case to
the Deputy Commissioner for further findings or
further procedure. The reviewing court will con
sider whether the Deputy Commissioner correctly
< C ro w e ll v. B e n s o n , 2-85, U. S. 22.
applied the substantive law to the facts of the
case, whether he deprived any party of due process
of law in his conduct of the hearing, and whether
there is substantial evidence to support any
finding of facts challenged by the complainant.
The court will not weigh the evidence, nor will it
substitute its view of the weight of the evidence
for that of the original “trier" of the facts.
The United States Supreme Court in recent
decisions has also given some finality to the
decisions of the Deputy Commissioner on mixed
questions of law and fact, a somewhat greater
degree of finality than that given in many States
to decisions of the compensation boards.
The powers of the Employees' Compensation
Appeals Board, for cases arising under the Federal
Employees' Compensation Act, are not clearly
stated in the instrument creating it; in practice,
however, it seems to have adjusted its procedure
to a considerable extent to that used in the pro
ceedings in certiorari or by bill in equity set forth
above. Its consideration is on the basis of the
record and it does not take additional evidence.
The desirability of an appeal to a trial court,
with trial by a jury following the decision of the
Compensation Board, is dubious. Workmen's
compensation administration is highly specialized.
Final decision, which necessarily involves policy
determination, should not be taken out of the
hands of the board and given to a jury which has
no specialization or continuity. The delays inci
dent to a trial in court, the increased cost of court
procedure including higher attorney's fees, jury
fees, expert medical witness fees, etc., unnecessarily
burden the administration of the compensation
act and defeat the primary objects of efficient
administration, i. e., speed and inexpensiveness of
determination of controversies.
An appeal to a judge of a trial court, whether
with or without a new trial by the judge, is but
little improvement. The same delays and higher
costs of administration remain, both to the in
jured worker and to industry. The varying de
terminations of the many trial judges of a State,
often conflicting with each other, deprive work
men's compensation administration not only of the
certainty which it should have but also of the
ability to determine and enunciate policies. Trial
judges, with their many other duties and problems
COURT PROCEEDINGS
can never acquire the specialization in this held so
necessary to efficient administration.
An appeal from the workmen's compensation
board should always go directly to an appellate
court of the State. By eliminating the trial courts,
many months are saved in obtaining final decision
in appeal cases, trial costs and expenses are re
duced, and the State will obtain better decisions
on compensation problems. Judicial review of a
workmen's compensation board's decisions should
be made upon the record taken before the board,
without retrial in the reviewing court. The
board's findings of fact should be conclusive in the
court, if supported by any substantial evidence.
Appeal procedure by certiorari or by bill in
equity to determine whether the board's decision
is in conformity with law is commended as the
most efficient mode of court appeal.
Negligence Liability
The most fundamental characteristic of the
workmen's compensation system is that it imposes
liability upon the employer for work accidents
without regard to the fault of either party. Effi
cient workmen's compensation administration also
includes provision for swift and inexpensive de
termination of all controverted claims for com
pensation benefits. Workmen's compensation
is now adopted almost universally and is effective
in relieving the miseries of the injured worker and
his dependents and in protecting society from in
jured workers becoming public charges; and, when
a reasonably complete system is provided by law,
it should be the exclusive remedy of the injured
worker and prescribe the exclusive liability of the
employer.
Unfortunately, some vestiges of the older lia
bility for negligence and of the damage suit still
remain. These arise from: (1) failure of the em
ployer to secure payments of compensation by in*
surance or self-insurance, which may make him
subject to damage-suit liability; (2) serious and
willful misconduct or gross negligence of the em
ployer resulting in injury for which the employee
at times may elect either to sue for damages or to
take compensation; (3) exclusion of some classes
of workers from workmen's compensation in vari
ous jurisdictions, as for example, farm workers,
household domestic servants, employees in speci
11
fied occupations, employees of an employer having
five or less workers, seamen, and railroad employ
ees in interstate commerce; and (4) a movement,
fortunately not strong as yet, in some quarters to
restore the action for damages against the em
ployer, either as an alternative or in addition to
workmen's compensation rights.
Another field in which negligence liability in
fringes upon workmen's compensation is that of
third-party liability. When the worker is killed or
injured by the negligence of a third person, not
the employer, he or his dependents may usually
sue such third party for damages, and, if compen
sation is paid, the employer is given a certain
interest therein. Further discussion of this thirdparty suit situation is, however, outside the scope
of this paper.
The liability of the employer to a damage suit
when he fails to insure serves only a punitive pur
pose to assist in compelling employers to insure.
Instances of such suits are relatively rare. A
damage suit is usually of no actual value to the
injured employee, as the uninsured employer may
be judgment-proof. A liability law should provide
that the damage-suit rights shall be in addition to
the employees' compensation rights and not an
alternative to them, in order not to deprive the
employee of maintenance and medical care during
the period of his incapacity. In such case, the
liability of the employer for negligence does not
impinge appreciably upon the workmen's compen
sation system.
Excluded occupations are slowly being brought
under workmen's compensation. Their original
exclusion was due to political necessities encoun
tered in the early passage of compensation acts.
The choice of a damage suit against the employer
is occasionally found if the injury is due to his
gross negligence or serious and willful misconduct.
When such a damage-suit right is given as an
alternative to a claim for compensation, it is unfor
tunate. In the early history of the California
workmen's compensation law, cases were noted
in which the employee who elected to sue for
damages and lost his damage suit could not resume
his claim for compensation. Protection of the
worker and his dependents against the economic
consequences of industrial injury should not have
become a subject for his speculation and for the
speculation of his lawyer for a contingent attor
12
WORKMEN’S COMPENSATION IN THE UNITED STATES
ney’s fee. The California law was accordingly
amended to take away this election of remedies
and to substitute for it a right to claim 50-percent
additional compensation from the employer, when
the injury was due to his serious and willful mis
conduct, in the same workmen’s compensation
proceeding as that involving basic compensation.
This change has worked successfully. Doubtless,
the reason for the former election of remedies was
to place a substantial incentive on employers to
provide a safe place of employment by penalizing
them through the imposition of heavy liability for
failure to do so. The provision for 50 percent
additional compensation for willful misconduct
adequately serves the same purpose.
A proposal, advanced recently in Massachusetts,
to restore an injured employee’s right of action
against his employer for damages for negligence
has made little progress, even though it was worded
to provide that such right should be in addition to
the compensation right. It was advanced osten
sibly as a means for securing greater cooperation
by employers with accident prevention programs.
The same result is accomplished with much less
expense by the simple provision for additional
compensation for serious and willful misconduct of
the employer.
The possibility that a successful damage suit
against the employer for his gross negligence would
substantially enhance his interest in accident pre
vention programs is an argument lacking much
merit. Such was not the case during the decades
preceding workmen’s compensation acts in which
such damage suit was the sole recourse of the
injured worker. The employer who is heedless of
the safety of his workmen is likely to be the one to
“take a chance” on the speculative possibility of a
bad injury and successful suit against him. The
accident prevention movement did not actually
gain momentum until workmen’s compensation
legislation became general and inescapably dis
tributed the entire cost of all industrial injuries to
employers by compulsory insurance and merit
rating.
The proposal for restoration of the damage suit
would be a breach of faith with employers and
industry. In return for being placed under the
burden of compensating all injuries, whether due
to their fault or not, by the payment of reasonable
insurance benefits based on percentage of wages
during incapacity, employers were given relief
from the heavy burden of defending negligence
damage suits and from occasional high verdicts.
To retain the compensation remedy and to restore
damage-suit costs against the employer violates
this conception underlying all workmen’s compen
sation legislation.
The cost of industrial injuries is passed on by the
employer to the consumer as a part of the cost
of production. The cost of an additional negli
gence liability would greatly increase the employ
er’s insurance premium for compensation and lia
bility insurance. The burden of damage-suit
liability is not confined to the payment of judg
ments rendered against the employer, which now
often rim into very large sums of money. It also
includes such hidden costs as maintaining legal
staffs by employer or insurance carrier to defend
such suits, paying court and jury fees, subpenaing
witnesses and paying witness fees (particularly
expert medical witness fees), and salaries of inves
tigators. Even though the employer wins the
suit, he will have incurred all of such expenses.
The financial return to the injured employee of a
sum additional to the compensation paid him, is
speculative and largely illusory. A considerable
portion of his recovery would go to contingent
attorneys’ fees and court costs. The compensa
tion paid or payable would also be deductible.
The writer’s experience with third-party suits
indicates that the average net recovery to the
employee would not be of much value to him.
Ill—
F e d e r a l
Legislation
J ohn P etsko *
for Federal
employees, on the whole, are the most liberal in
the country, but a direct and unqualified compari
son with State laws cannot be made for reasons
explained later in~ this article. Compensation
legislation for Federal workers, enacted in 1908,
was the first in this field.*1* With the gradual
establishment of Federal responsibility, Congress
subsequently enacted legislation to protect certain
of the privately employed workers under Federal
jurisdiction (some remaining under State law or
unprotected by any compensation provisions).
This later legislation—similar to State laws in
type of coverage and financing—provides larger
benefits than those authorized in all but a few
States. Administration of the Federal compensa
tion laws—in spite of the variation in benefits,
types of workers covered, and method of financ
ing—has been centralized in one agency, which has
adjusted its organization as each new group was
brought under coverage.
W o k k m e n ’ s c o m p e n s a t io n b e n e f it s
Development and Coverage
The need to furnish protection for Federal
workers incurring injuries led to the initial Federal
action in the workmen’s compensation field. The
•Of the Bureau’s Office of Publications.
i Previously, two States had established investigative commissions but no
legislation resulted. The original Federal act applied only to the relatively
few United States Government employees engaged in hazardous occupations.
The earliest Federal compensation law applying to private employment is
the Longshoremen’s and Harbor Workers’ Act of 1927.
Federal Act of 1908 2 provided limited benefits for
certain Federal employees engaged in hazardous
work. In 1916, this act was superseded by the
Federal Employees Compensation Act, which
applied to all civil employees of the Government.3*
In order to cover certain cases for which “work
men’s compensation proceedings may not validly
be provided by State law,” Congress passed the
Longshoremen’s and Harbor Workers’ Compensa
tion Act in 1927. At first, it covered principally
workers hired to load and unload vessels operat
ing on the lakes, rivers, and other navigable waters
of the United States. Although the title of the
act implies limited coverage, other types of workers
have been subsequently blanketed under its pro
visions. Functioning as the legislature of the
District of Columbia, Congress extended the Long
shoremen’s Act in May 1928 to include employees
of private industry in the District. Employees
of certain private employers engaged in contrac
tual work for the Government outside the United
States—another group for whom Congress had
sole legislative responsibility—were covered by
an additional amendment in 1941.
Approximately 3.2 million workers were esti
mated to be covered by these two laws in May
1953. Of these, over three-fourths were civilian
employees of the Federal Government.
2 Acts of 1882 and 1900 had made some provisions for compensation for
workers in the Life Saving Service of the Treasury Department and in the
Postal Service, respectively.
* The bill was prepared jointly by the Bureau of Labor Statistics and the
American Association for Labor Legislation.
13
14
WORKMEN’S COMPENSATION IN THE UNITED STATES
Several other groups generally considered to be
under Federal jurisdiction have not been included
in Federal workmen’s compensation coverage,
but some are covered by State compensation laws.
In 1936, Congress granted the States authority
to apply their compensation laws to work done by
employees of private contractors on Federal
property situated within their geographical bound
aries.
Certain employees of airlines and motor trans
portation companies engaged in either interstate
or foreign commerce are also under State laws.
In general, interstate jurisdictional problems have
been avoided by the establishment—through
agreements, court decisions, or provisions within
the State laws—of certain rules to serve as the
basis for deciding final jurisdiction. For example,
a bus driver who is injured in State “A” but
operating out of State “B” might be compensated
in State “B” in accordance with the “point of
origin” rule.
Workers not covered by any workmen’s com
pensation law, but provided for by special Federal
legislation, are employees of railroads engaged in
interstate traffic and seamen of the American
merchant marine. They may claim damages
under a system of “rights” which has been estab
lished by tradition and by this special legislation—
the Federal Employers’ Liability Act of 1908.
Railway workers, under the Liability Act, may
sue employers for damages but must prove em
ployer negligence. Under the so-called “mari
time rights,” all injured or ill seamen are entitled
to maintenance, cure or care, and wages to the end
of the voyage.4 In addition, they are entitled to
indemnity for “pain and suffering,” provided they
can prove that the ship was ‘1unseaworthy.” Fur
ther, the Merchant Marine Act of 1920 (Jones Act)
extended to seamen the rights which railway work
ers have under the Federal Employers’ Liability
Act. Under the Jones Act, a seaman may “elect”
to recover damages for a work injury at law, with
certain common-law defenses removed, provided
he can establish that the injury resulted from negli
gence on the part of the employer. Such recovery
is in addition to the “maritime rights.”
Moreover, for both railway workers and seamen,
contributory negligence by the injured worker
diminishes the amount of damages he may obtain.
4 For a discussion of workmen’s compensation and the protection of seamen,
see Bulletin No. 860 of the Bureau of Labor Statistics.
The litigation required by these arrangements may
take some time in process, especially if appeals are
involved, and the worker must pay for legal fees
and court costs. In contrast, both State and Fed
eral compensation laws are designed to provide
benefits to injured workers or their beneficiaries
upon proof of employment and loss of earnings;
proof of employer negligence is not required.
The Federal Employees Compensation Act
covers the following personnel: (1) civil officers
and employees of all three branches of the United
States Government; (2) employees of the Govern
ment of the District of Columbia;5•(3) officers and
enlisted personnel in the Reserve Corps of the
armed services, including the Coast Guard, while
on active duty or in training “in time of peace” ;
(4) commissioned personnel of the U. S. Public
Health Service; and (5) those workers employed
under various emergency relief acts.
Of current significance is the fact that all reserv
ists, recalled to active duty as a result of the Ko
rean conflict, are covered. As no war has been
officially declared, this service is “in time of peace,”
and the reservist has the alternative of securing
benefits under either Veterans Administration pro
grams or under the Federal Employees Compensa
tion Act. Depending upon the individual’s rank,
workmen’s compensation benefits may be much
larger than those paid by the Veterans Administra
tion, since workmen’s compensation is computed
as a percent of salary but benefits under Veterans
Administration programs are on a flat-rate basis.6
The other major Federal workmen’s compensa
tion law—the Longshoremen’s and Harbor Work
ers’ Act—covers the following: (1) Longshoremen,
ship repairmen, ship servicemen, harbor workers,
and others (excluding the master or crew members
of a ship) performing maritime work upon the
navigable waters of the United States, including
dry and floating docks; (2) all persons in private
employment in the District of Columbia (except
domestics and casuals); (3) those employed at any
military, air, or naval base acquired from any for
eign government or occupied or used for military or
naval purposes in the territories and possessions of
the United States; (4) those engaged by United
• Except pensionable members of the Police and Fire Departments.
• The Veterans Administration’s monthly rates for service-connected disa
bility range from $15.75 for 10-percent disability to $172.50 for 100-percent dis
ability. Death benefits (exclusive of the life insurance to which all service
men’s beneficiaries are entitled) range from $75 monthly for a widow with no
children, to $121 for a widow with one child (each additional child, $29).
15
FEDERAL LEGISLATION
All injuries or diseases incurred in the perform
ance of duty, except those self-inflicted or caused
by misconduct, are covered by both Federal
compensation laws. In practically all respects,
however, the monetary benefits provided by the
Federal Employees Compensation Act are more
generous than those of the Longshoremen’s Act;
Federal employees also have the option of using
accumulated sick or annual leave during disa
bility until such leave is exhausted,8 with com
pensation available thereafter. As shown in the
accompanying table, the difference in the limita
tion on weekly compensation is outstanding: the
limits set under the Federal Employees Act are
7 The War Claims Act of 1948 authorized disability and death benefits to
civilian American citizens interned by or in hiding from the Japanese Govern
ment.
8 Federal employees are entitled to 13 days’ sick leave and 13 to 26 days’
annual leave on full pay each year. Sick leave may be accumulated, with no
restriction as to total amount.
States contractors in public work outside the con
tinental United States; and (5) those employed by
Government contractors during World War II who
incurred injury, death, or detention as the direct
result of a war-risk hazard, and the dependents of
detained or captured employees.7
Benefit Provisions
Major benefit provisions of Federal and selected State workmen’s compensation laws, December 1952 1
Maximum
Federa ]and State acts ofpercentage
wages or
of wage loss
Maximum period
of payment
Maximum weekly
amount 8
Maximum period of payment
Number of weeks for
Maximum total
schedule injuries
payment
Nonschedule
injuries
Loss of Loss of Loss of
sight of fourth arm (at
an eye finger shoulder)
DEATH BENEFITS 8
Federal employees
Lon gshoremen
Arizona
California
Connecticut
Illinois
Michigan
Nevada
North “Dakota
Oregon
Washington
45-75 4 ___
35-66^64.......
35-66264 -6124_____
5 0 _______
75-97264___
6626 ______
50-804 ___
45-75 8
Until remarriage____
___do __________
.... do __________
200 weeks 8______ __
520 weeks 7_________
400 weeks__________
Until remarriage____
do __ _ _ _ _
_ _ do ____ _____
___do __________
$121.15___________
$13.38-$35.00 ____
$153.85 __________
$35.00-$43.756. ___ $8,750 8________
$36.00____________
$25.50-$34.00 4_____ $6,800-$9,600 4_..
$28.00-$36.00 4..........$13.85-$27.70 4_____
$15.75-126.254 ........
$18.46-$39.23 4 ____
$23.08-$40.38 4_____
PERMANENT TOTAL DISABILITY
“F ederal employees
Lnn gshoremen
Arizona
Connecticut
Tdaho
_ _ _________
Illinois
M ichigan
N evada
North D akota
Oregon
W ashington
W isconsin
L ife_______________
Period of disability__
L ife______________
780 weeks ________
Life H______ _______
___do. ________ ____
750 weeks
_ ____
L ife_______________
___do ___________
Period of disability 10_.
Life 1 0 ___ _________
7 0 ________ ___do ___________
6626-754___
6626 ______
6 5 ................
50 ____
55-6010____
75-9726 4____
6626
70 ______
6626 ______
$121.15 9 _________
$35.00 9--___ _____
$150.00___________
$ 3 6 .0 0 .____________
$20.00-$37.00 4........ -.
$25.50-$34.00 4_____ $6,800-$9,6004__
$28.00-$38.00 4 . ___
$17.31 9___ _______
$25.00-$42.00 4_____
$18.46-$40.38 4.........
$23.08-$46.15 4_____
$37.00 9.......................
PERMANENT PARTIAL DISABILITY «
“Federal employees 18
Longshoremen 13
__
Alabama
Arizona 13
California 13
Connecticut13 _ ____
Tdaho 13
Illinois 13
Louisiana
__
Massachusetts ______
Michigan _ ______
Minnesota 13
New Jersey is _____
New York 13
_
Orevon
Rhode Island «
Tennessee13 _______
Wisconsin 13 _ _ _ _
6626-75 4 ___
6626_______
55-654_____
5 5 ________
6124 _____
5 0 ________
55-60 if is___
75-9726 4
6 5 ________
6626--.........
6626 ______
6626 ______
6626 ______
6626
(io)„ ______
50-60 18 ___
6 0 ________
7 0 ________
See footnotes at end of table
285758— 54----3
$121.15 8.....................
$35.00 9___________
$23.00____________
$126.92_____ ______
$30.00 ......................
$36.00.____ ______
$25.00-$37.00_______
$25.50-$34.004 ___
$30.00____________
$30.00 14 ___________
$28.00-$38.004...........
$32.00 8___________
$30.00____________
$32.008___________
$25.38-$45.00 4_____
$18.00-$20.00 18 ___
$25.00____________
$37.00 8..- ..............
$11,000 18______
$9,200_________
$10,000 I4______
$7,500_________
160
140
100
130
120
208
140
140
100
200
150
110
175
160
(2°)
^ 120
100
275
312 During disability.
15
7
280
Do.
15
w 200 300 weeks.
17 lfl 17 240
260 During disability.
12
399 weeks.17
20
275 780 weeks.
20
240 (19).
20
225 417 weeks.
18 200 300 weeks.
20
14175 During disability.
15
250 500 weeks.
jj'jg
20
18 230 310 weeks.
20
300 550 weeks.
312
15
During
disability
(20)
(2°) (20).
18
300 800 weeks.
15
18 200 300 weeks.
28
500 1,000 weeks.
16
WORKMEN’S COMPENSATION IN THE UNITED STATES
Major benefit provisions of Federal and selected State workmen’s compensation lawsf December 1952 1—Continued
Maximum
Federal and State acts ofpercentage
wages or
of wage loss
Maximum period
of payment
Maximum weekly
amount2
Maximum period of payment
Number of weeks for
Maximum total
schedule injuries
payment
Nonschedule
injuries
Loss of Loss of Loss of
sight of fourth arm (at
an eye finger shoulder)
TEMPORARY TOTAL DISABILITY
Federal employees ___
Longshoremen ______
Arizona _____ ______
Connecticut________ __
Idaho _____________
Illinois
Michigan ____ _____
Nevada ___________
North Dakota________
Oregon ____ ______ _
Washington ________
Wisconsin____________
Wyoming. _ ______
6626-75 4
662^ ______
6521 ______
5 0 ________
55-604 ___
75-97264.
6626______
8 0 ________
6626______
50-6626 4 ___
7 0 ________
During disability
__ do __________
433 weeks___________
780 weeks___________
400 weeks22_________
During disability
500 weeks. ________
433 w eeks_________
During disability
___do ___________
.... do __________
___do ___________
___do _____ _____
$121.15___________
$35.009___________ $11,000................
$150.00--............ .......
$36.00____________
$20.00-$37.004_____
$25.50-$34.004 ___ $6,80d-$9,6004...
$28.00-$38.004_____
$24.23-$34.62 ______
$25.00-$42.00 4_____
$25.38-$45.00 4...........
$23.08-$42.69 4______
$37.009____ _______
$21.23-$43.85 4_____
1 Only benefit provisions of State laws which exceed those of the Long
shoremen’s Act are shown. Benefit provisions of Federal Employees
Compensation Act are included, but not as a basis of comparison.
2 On overseas installations, compensation payments for noncitizens and
nonresidents are computed on basis of prevailing local payments in similar
cases.
8 Lower limit for maximum percentage of wages applies to widow only;
higher limit applies to widow with children.
* According to number of dependents.
8 Period varies from 200 weeks for maximum benefits to 316 weeks for
minimum benefits.
®Widow without children, $35 and $7,000; widow with one or more children,
$43.75 and $8,750.
7 Thereafter, reduced payments to children until age 18.
8 According to number of dependents; in addition, lump-sum payment at
death as follows: $300 to widow and $100 for each dependent child; maximum,
$600.
• Additional benefits in specific cases; e. g., vocational rehabilitation,
constant attendant, etc.
18 According to marital status and number of dependents.
11 400 weeks; thereafter $10 per week ($12, if dependents).
12 For schedule injuries, maximum percentage is based on average weekly
wages; for nonschedule injuries, on difference between wages before injury
and wages after injury, i. e., wage loss. For loss of arm, maximum period
shown is for schedule injuries unless otherwise specified.
is Compensation for both schedule and nonschedule injuries is in addition
to that for temporary total disability.
14 Weekly maximum is increased by $2.50 for each total dependent, the
total benefit being limited to the weekly wage. In addition to all other
compensation for loss of members, hearing, or eyes, or for bodily disfigure
ment, payments of $20 weekly are authorized for specified periods ranging
from 100 to 500 weeks.
i®For schedule injuries; $10,000 for nonschedule injuries.
ifl Maximum period allowed for a number of combined losses, as follows:
Alabama, 400 weeks; California, 399 weeks, based on State Permanent Dis
ability Rating System; Louisiana, 400 weeks; Minnesota, 440 weeks; and
Tennessee, 400 weeks.
17 Four weeks of compensation for each 1 percent of permanent disability;
thereafter, life pension of 1 percent of average weekly earnings for each 1
percent of disability in excess of 60 percent, if disability is 70 percent or more.
is In Idaho, 55 percent for nonschedule and 60 percent for schedule injuries;
in Rhode Island, 50 percent and $20 for schedule injuries, and 60 percent and
$18 for nonschedule injuries.
19 In proportion to schedule injuries.
28 No maximum period specified. Law provides for monthly payments
(minimum, $100) of $45 for each degree of disability, ranging from 2 to 192
degrees for schedule injuries and from 2 to 132 degrees for nonschedule injuries.
21 Additional benefits for dependents.
2£$10 per week thereafter; $12 if dependents.
approximately 3 times greater than those of the
Longshoremen’s Act. A pending amendment to
the latter act would reduce somewhat, but would
not eliminate, the difference in benefits, which had
been accentuated by the liberalization of the
Federal Employees Act in 1949.9
The proposed amendment would also make
identical the waiting-period requirements of the
two laws; it is 3 days for the Federal Employees
Act and 7 days for the Longshoremen’s Act.
Under existing law, compensation is paid for the
waiting period if disability continues beyond 21
days for Federal employees and beyond 7 weeks
for employees covered by the Longshoremen’s Act.
The waiting period affects compensation only.
In addition to monetary benefits, both laws
provide for first aid, full medical care, and any
hospitalization required—without limit as to time
or amount. Rehabilitation is also provided for,
with a monthly payment up to $50 for Federal
employees and $43 for workers under the Long
shoremen’s Act for maintenance during rehabilita
tion. The Federal Employees Act also covers the
cost of employing an attendant, when required,
up to $75 monthly.
• For discussion of the 1948 and 1949 amendments, see Monthly Labor
Review, September 1949 (p. 278) and November 1949 (p. 518).
Administration of the Program
Both of the Federal acts are administered by the
Bureau of Employees’ Compensation of the U. S.
Department of Labor. Within the Bureau, how
ever, the two acts are administered separately—
one on a centralized and the other on a decentral
ized basis, for the most part. These administra
tive arrangements have been necessitated by the
hybrid nature of the coverage and financing.
Under one act, the workers of only one employer—
the Federal Government—are involved, and the
funds are provided by Congressional appropria
tion. Under the other act, as under State laws,
the types of employers vary widely, the Govern
FEDERAL LEGISLATION
ment acts as an enforcement agency, and private
employers are required to provide the protection.
Virtually all cases under the Federal Employees
Act are processed at the main office of the Bureau
of Employees’ Compensation in Washington or at
its district office in San Francisco. The district
office was opened as a pilot installation to deter
mine the feasibility of further decentralization.
In contrast, the Longshoremen’s Act is adminis
tered by deputy commissioners of districts estab
lished by the Bureau in accordance with statutory
provisions. Compensation for maritime employ
ment is handled by 12 deputy commissioners
assigned to 13 compensation districts covering
the 48 States, Hawaii, and Alaska. An addi
tional deputy commissioner administers private
employment compensation cases in the District of
Columbia. Compensation claims of workers over
seas are also processed by these deputy commis
sioners. In servicing the claims of some workers
employed overseas, the Bureau cooperates with
and uses the facilities of military establishments
at or near the worker’s place of employment.
The Bureau acts as a quasi-judicial body in
administering the Federal Employees Compen
sation Act, making findings of fact and awards for
or against payment of compensation. Further
more, when accidents occur under circumstances
creating legal liability against a third party (i. e.,
other than the United States Government or its
employee), the Bureau initiates action to collect
necessary damages. No legal procedure for ob
taining evidence is required, but generally the
Bureau makes its decisions on the basis of written
testimony filed by the parties concerned; hearings
are not legally provided for. However, under the
Longshoremen’s Act, the functions of the deputy
commissioners are to review the settlement of
claims, all of which must be reported in writing.
During this process, deputy commissioners may
make any investigation deemed necessary and
may order hearings, generally informal con
ferences. The Bureau’s central office in Washing
ton determines whether insurance companies
selected by employers are qualified to write
workmen’s compensation insurance under the
law and authorizes certain employers to act as
self-insurers.
The appeals procedure also varies for the
different groups covered. For Federal employees,
Bureau decisions are subject to review by an
17
independent Employees Compensation Appeals
Board, on questions of both law and fact—the
right of appeal has been available only since 1946.
The Board’s decisions are not subject to review.
Cases, however, may be reopened by the Bureau
on the basis of new evidence; they are then proc
essed as new claims. According to available
records, an average of only about 4 or 5 percent of
all claims filed for compensation receive adverse
decisions which may result in appeals action. For
employees covered by the Longshoremen’s Act,
appeal is to the appropriate Federal district court.
Judicial review is limited to questions of law;
determination of facts, when supported by the
record, cannot be disturbed by the courts.
Both Federal laws provide for safety investi
gation, advice to employers on accident pre
vention, and the developing, supporting, and
fostering of organized safety promotion. These
functions are performed by the Bureau of Labor
Standards of the U. S. Department of Labor. A
safety supervisor and a small staff are available
to assist the various Government agencies and the
interested private employers with programs de
signed to prevent accidents and to remove unsafe
working conditions. In the Federal Govern
ment, organized accident prevention programs are
carried on regularly by 20 executive departments
or independent agencies accounting for about 85
percent of all Federal employees. The results of
these Government programs over the past 10 years
indicate clearly that such efforts are practical and
effective: the rate of occupational injury has been
reduced 40 percent.
Because the majority of Federal employees have
nonhazardous jobs, many people believe that none
of them are engaged in hazardous work. In fact,
however, Federal workers perform construction
work, foundry work, lumbering, quarrying, wood
working, and marine, warehousing, and similar
operations; in addition, Federal employment in
cludes a large number of maintenance workers,
mail handlers, laundry workers, firefighters, elec
tricians, and printers. These groups account for
about 85 percent of all Federal accident cases,
with handling of material or equipment and falls
causing nearly half of the injuries. By establish
ment, the Department of Defense, employing a
little over half of all Federal personnel, had the
largest number of injury cases—almost 40 per
cent in the fiscal year ended June 30, 1952; the
18
WORKMEN’S COMPENSATION IN THE UNITED STATES
Post Office Department, with 20 percent of em
ployment, had about 30 percent of all injuries.
Approximately 100,000 Federal employees re
ported injuries during fiscal year 1952. However,
less than half involved loss of time, as shown in
the figures below on final disposition of cases
(exclusive of medical care). Of this group, nearly
all (approximately 45,000) were temporary in
juries, less than 3 percent (1,300) of which resulted
in permanent disabilities. Further, the majority
of those who were off the job beyond 3 days
elected to utilize leave instead of compensation.
(Some of those listed as receiving compensation
also used leave, but how many is not known.)
No loss of tim e1___________________________
1 to 3 days lost time_______________________
More than 3 days lost time------------------------Covered by sick or annual leave________
Compensated, nonfatal_________________
Compensated, fatal____________________
Recovery from third party_____________
Claims disapproved____________________
Percent
52. 9
12. 1
35. 0
19. 3
11. 4
.2
.2
3. 9
Total_______________________________ 100. 0
1 Workers off the job no more than 8 hours are regarded, for administrative
purposes, as having lost no time.
Reports received by the Bureau of Employees,
Compensation under the Longshoremen’s Act for
the same period indicated approximately 139,000
injuries. Of this number, 93,000 were in mari
time employment; 17,000 were among defensebase workers overseas; and 29,000 were in private
employment in the District of Columbia. Ap
proximately 13,000, 1,500, and 4,000, respectively,
were compensable cases.
Compensation benefits under the Federal Em
ployees Act amounted to $36 million for that
year. The administrative costs were 3.6 percent
of benefits. (During the entire operation of the
act, administrative costs have never exceeded 6.5
percent annually.) For all private employment
covered by Federal legislation, approximately $9.5
million was spent by insurance companies or selfinsured employers, exclusive of medical costs, in
cases closed during the year.
Relative Levels of Federal Provisions
Although the Federal Employees Act, as previ
ously mentioned, provides more liberal benefits
than any other law, it cannot in fairness be com
pared with the State laws. Financing of benefits
under the act are provided by congressional ap
propriation, in contrast with the insured-risk
provisions of State compensation laws. In addi
tion, the act covers a homogeneous group of
workers under a single employer and permits
employees to utilize accumulated sick or annual
leave, with full pay, in lieu of compensation pay
ments, and to take any such leave before receiving
disability compensation. Not only is there no
single Federal schedule of benefits, but the two
basic Federal laws differ as to types of workers
covered, method of financing, and administrative
procedure; in addition, there is no standardized
State workmen’s compensation law.
On the other hand, benefits provided by the
Longshoremen’s Act exceed those of the majority
of State laws but are exceeded by a few. How
ever, inasmuch as the Longshoremen’s Act pro
visions are similar in nature to those provided
under State laws, exact differences between them
can be ascertained, but only after lengthy and
detailed comparison.
The actual amount of compensation for a given
injury is determined by four factors, and provision
for a single factor cannot be meaningfully com
pared: a more liberal provision for one factor may
be canceled by a less liberal provision for another.
The four determining factors are the maximum
rate of payment (usually a percentage of the work
er’s earnings at the time of the accident), maxi
mum period of payment, maximum weekly amount,
and the maximum total payment. When the
actual benefits which result from these four factors
are computed and compared, it is then possible to
determine the relative benefits of various laws.
Provisions under the Federal Employees Act are
noted in the accompanying table—not as a basis of
comparison, it is emphasized, but to indicate
benefits provided in the law. The table shows
that 20 States have provisions exceeding those of
the Longshoremen’s Act in at least one of the four
factors. But, in many instances, one of the fac
tors—especially the total weekly maximum—
limits the actual benefits so that those under the
Longshoremen’s Act are higher. For example,
suppose that an industrial worker with a wife and 2
children, earning $70 a week, dies as a result of an
on-the-job accident; his widow would receive $35
a week if he were covered by the Longshoremen’s
Act and the workmen’s compensation law of one of
the States listed in the table under “ Death Bene
FEDERAL LEGISLATION
fits.” In five of the States, the widow would re
ceive more, but in three States, less. Similarly, if
benefits for the various types of disability were
calculated for such a worker, Longshoremen’s
benefits would equal those provided in one or two
States and would be either above or below those
provided by several States. The liberality of the
Longshoremen’s Act is even more striking, in view
of the fact that provisions of the State acts outlined
in the table provide higher benefits than those of
laws in States not listed.
Differences in waiting-period requirements are
less marked. In contrast to the 3-day Federal
Employees requirement, one State has no waiting
period. Under other State acts, the period varies
from 1 to 10 days, with 7 the most frequent—the
time allotted under the Longshoremen’s Act.
Other features of Federal and State compensa
tion legislation also vary widely. For example,
only 31 State laws furnish full medical care and
only 12 of these have no period or cost limitations
on such care. Twenty-six States cover all occu
pational diseases, but 18 list only a limited num
ber and 4 do not compensate for any occupational
disease. While all States provide rehabilitation,
only 16 augment it with some form of special
allowance.
Over and above the variations as to benefits,
many of the State laws are “ elective”—i. e.,
employers may accept or reject the law. In the
latter case, the employer is subject to suit in
court and his rejection deprives him of certain
common-law defenses. A court suit, however,
19
may still cost a worker time and money; whereas
ordinarily, under the Federal laws, the worker
simply files a claim. Both Federal laws are “ com
pulsory” in nature; therefore all workers covered
are automatically protected.
Also relevant in this connection is the extent
to which workers are excluded from compensation
coverage. While not all workers under Federal
jurisdiction are protected, State coverage as a
whole is even more limited. The difference in
type of workers within Federal and State jurisdic
tion makes substantive comparison difficult. But,
for the one like group—public employees—the
United States Government protects all of its
workers while some of the States do not.
The details of the above comparison are, of
course, subject to constant change, as legislation
is amended. In 1951 alone, over three-fourths of
the States amended their compensation laws, and
further amendments were enacted in 1952 or are
currently pending. Past experience indicates,
however, that while the State legislatures change
individual provisions of compensation laws more
frequently, amendments to the Federal acts are
more comprehensive. For example, the 1949
amendment to the Federal Employees Compensa
tion Act was the first to cover rates in over 20
years, but it resulted in the act’s being considered
by authorities in the field as “ one of the most
advanced workmen’s compensation laws in the
world.” The 1948 amendment to the Longshore
men’s Act also was the first in 20 years; it provided
for benefit increases of approximately 40 percent.
I V —
O c c u p a t i o n a l
D i s e a s e s
B ruce A . G r e e n e *
N
of the early workmen's compensation laws
in this country made any specific provision for the
coverage of occupational diseases, although the
term “personal injury” in the Massachusetts law
was held by the courts to be broad enough to
include occupational diseases. In some States,
sporadic court decisions defined the term “acci
dental injury” or “injury” to include occupational
diseases. The confusion resulting from the un
certainty of these court decisions led the States to
gradually bring occupational diseases expressly
under the workmen's compensation laws.
By 1930, all or certain types of occupational
diseases were covered by 15 State or Federal
workmen's compensation laws.*1 Today, it is
generally accepted that the worker suffering dis
ability through occupational disease should be
entitled to the same protection of the workmen's
compensation law as a worker disabled through
accidental injury. Table 1 shows that some pro
vision for such protection is made under 52 of the
54 laws in the United States and its Territories.
More than half of these 52 laws cover all occupa
tional diseases. The others limit the coverage to
diseases specifically listed (scheduled).
An outstanding development in recent years has
been the increasing use of full or general coverage.
This trend was particularly notable in 1949 when
Delaware, Nevada, New Jersey, Rhode Island,
Utah, and West Virginia changed from schedule
one
♦ Of the Bureau of Labor Standards, U. S. Department of Labor.
1 California, Connecticut, Illinois, Massachusetts, Minnesota, New Jersey,
New York, North Dakota, Ohio, Wisconsin, District of Columbia, Hawaii,
Puerto Rico, Federal Longshoremen’s Act, and Federal Employees’ Com
pensation Act.
20
to full coverage, and South Carolina, in providing
for coverage of occupational diseases for the first
time, adopted the general coverage pattern. Since
1949, two additional States (Maryland and Vir
ginia) joined the full coverage group of States.
Coverage and Costs
In the past, private insurance carriers, with few
exceptions, have opposed the broad coverage of
occupational diseases in workmen's compensation
legislation. However, at the 1949 convention of
the International Association of Industrial Acci
dent Boards and Commissions, the representative
of one of the largest workmen's compensation
insurance carriers in the United States made a
convincing statement in favor of full coverage of
occupational diseases.2 He pointed out that new
industrial processes are constantly creating new
occupational disease hazards and cited the follow
ing examples: the lung-cancer hazard discovered
recently in the chromate industry; beryllium poi
soning found in plants producing beryllium com
pounds as well as in plants using beryllium
in manufacturing operations; and the poisoning
caused by the increasing use of extremely danger
ous elements found in insecticides, fungicides,
rodenticides, and herbicides. He referred also to
the expanding use of plastics and new chemicals
which may cause occupational diseases not now
2 See Proceedings of the 35th Annual Convention of the IAIABC, Bureau
of Labor Standards, Bull. 119 (pp. 70-79). This opinion was expressed by
Ashley St. Clair, general counsel of the Liberty Mutual Insurance Co.,
Boston, Mass.
OCCUPATIONAL DISEASES
T able
1.— C overage
Full coverage
Alaska
Arkansas
California
Connecticut
Delaware
District of Columbia
Florida
Hawaii
Illinois
Indiana
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Nebraska
Nevada
New Jersey
New York
North Dakota
Ohio
Oregon
Rhode Island
South Carolina
Utah
Virginia
Washington
West Virginia
Wisconsin
United States:
Civil Employees
Longshoremen’s Act
o f o ccu p a tio n a l d ise a sesf J u ly 1953
Schedule coverage
Jurisdiction
Alabama___ ____
Arizona_________
Colorado________
Georgia...............
Idaho__________
Iowa___________
Kansas..................
Kentucky..........
Louisiana_______
M aine................
Montana_______
New Hampshire..
New Mexico..........
North Carolina__
Oklahoma...........
Pennsylvania........
Puerto Rico_____
South Dakota___
Tennessee_______
Texas.....................
Vermont________
Number of
diseases1
No coverage
Mississippi.
36 Wyoming.
24
25
11
16
12
(3) 6
14
(4)
0
31
26
13
13
17
25
89
45
7
0
1 In some States, the number of diseases refers to “groups of diseases.”
2 Covers pneumoconiosis, including silicosis, anthroco-tuberculosis, aluminosis, and other specified dust diseases.
3 Covers only injury or death by gas or smoke in mines and poisonous gas
in any occupation. Voluntary as to silicosis.
4 Separate act provides for payment of $60 a month from public funds to
persons totally disabled from silicosis, if they have been State residents for
10 years.
3 Covers silicosis, and other pulmonary diseases, anthrax, lead poisoning,
dermatitis, venenata, and diseases due to the inhalation of poisonous gases or
fumes.
• Full coverage permissible.
known, and to the increasing radiation hazard
resulting from the atomic energy developments.
This insurance company representative asked:
In view of present-day disease hazards in industry,
should not every industrial jurisdiction, if not every
jurisdiction, do away with a schedule of compensable
diseases, and, under the proper definition, make every
occupational disease compensable? Beryllium is men
tioned in only two schedules, but a man suffering
from beryllium poisoning is as sick as a man with lead
poisoning or silicosis or benzol poisoning. Almost
all of the States having occupational disease schedules
include radiation disease in some fashion. In a num
ber of these laws, however, the description used is so
restrictive that some workers in those States who here
after suffer radiation diseases as a result of work expo
sures to radioactive isotopes or to other forms of
atomic energy will not be entitled to compensation
benefits. In short, a schedule of compensable occupa
tional diseases, even a schedule as complete as that of
Texas, is an unsatisfactory device. Is there one good
reason to give compensation benefits to one man suf
fering from an occupational disease and deny them
to another, merely because the latter is suffering from
a disease not known when the schedule was drawn?
21
One of the main objections presented by the
opponents to full coverage is that there would be
a flood of occupational disease claims and that
the cost would be excessive. However, the records
of States with such coverage do not indicate this.
In New York, for instance, only 3.3 percent of all
compensated cases closed in 1947 involved occu
pational diseases. The total compensation
awarded for occupational disease cases amounted
to about $2,000,000 or 3.5 percent of $57,000,000,
the total compensation cost for all cases. In Wis
consin, over the 6-year period, 1946-51 (see table
2), the occupational disease cases averaged less
than 5 percent of the number of all cases and the
total cost of benefits awarded in occupational dis
ease cases averaged about 3.8 percent of the cost
of all cases. These costs include silicosis cases
which represent about 25 percent of the total cost
for all occupational disease cases. The Wisconsin
experience is especially significant since full bene
fits are provided for all such cases and have been
since the amendment was passed in 1919 providing
for coverage of occupational diseases.
In Virginia, the costs for occupational disease
coverage have been relatively low also. The
amendment which brought occupational diseases
in that State under the workmen’s compensation
act became effective July 1, 1944. Under this
amendment, the diseases to be covered were listed,
but the employer was also permitted to elect full
coverage for all diseases in lieu of the schedule or
list of diseases. For the period July 1, 1944, to
January 1, 1950, the cost of compensation and
medical benefits for occupational disease cases was
only about 1 percent of the total cost for all cases.
In 1952, Virginia amended its law by making the
full coverage provision compulsory for all employ
ers subject to the act.
The Oregon experience over a 5-year period
from July 1943 to July 1948, shows that occupa
tional disease claims represented only 1.37 percent
of all claims filed. The following extract from
the Portland Oregon Journal of November 7, 1948,
is pertinent:
Owing to the favorable experience in Oregon, it was
not necessary for the Industrial Commission to
increase the base contribution rates for the occupa
tional disease coverage for employers under the
workmen’s compensation act. When the occupa
tional disease law was being considered for adoption,
critics declared its terms were much too liberal because
it was an all-inclusive law; that there would be a rush
WORKMEN’S COMPENSATION IN THE UNITED STATES
22
of claims filed, and that the financial reserves of the
commission would be seriously impaired. It is partic
ularly pleasing to be able to demonstrate that these
predictions were without foundation.
Full coverage in workmen’s compensation legis
lation appears to have justified itself according to
the experience of other States. During the 15year period 1935 to 1949 in Illinois, less than 2
percent of the total industrial injuries reported
were occupational disease cases. The Ohio experi
ence since 1939, when it changed from schedule to
coverage of all diseases, is noteworthy in regard to
the effect on the insurance rates. The basic
insurance rates prior to the adoption of this amend
ment included a general occupational disease rate
of 2 cents for each $100 payroll. This general
occupational disease rate was maintained after the
adoption of the amendment and has remained
unchanged. For a few classifications in which the
occupational disease hazards are considered exces
sive, the rate varies from 20 cents to $1 on each
$100 payroll. Although it is too early to deter
mine the real measure of the cost of the 1949 New
Jersey amendment, it is interesting to note that
an increase of only 1.2 percent in the general
insurance rate level was adopted to reflect the
change from schedule to full coverage.
Administration
Full coverage of occupational diseases under
workmen’s compensation legislation has often been
opposed on the grounds that many diseases which
are not occupational in origin would be compen
sated and consequently the law would become a
health insurance law. Again, the facts do not
bear this out. In discussing the full coverage
amendment to the New Jersey law, it was alleged
that, under the definition suggested, common colds
would be classified and compensated for as occu
pational diseases. However, an inquiry by the
New Jersey Consumers’ League to the Wisconsin
and New York workmen’s compensation agencies
for information on their experience in this con
nection resulted in the following replies:
Replying to your inquiry as to whether the Board
allows compensation for colds, I am saying that I
have no recollection of any such decision during my
years of connection with this Board.—Letter from
Miss Mary Donlon, Chairman, New York Workmen’s
Compensation Board, February 23, 1949.
T able 2. —
C o m p a ris o n o f o c c u p a tio n a l disease cases a n d
benefits w ith a ll types o f com pensable cases i n W is c o n s in ,
1946-51
Benefits
Percent of (in thousands) Percent of
©ccupaoccupa
tional
tional
disease
disease
Occupa benefits
Occupa cases to
to
Total
tional
Total tional
total
disease all benefits
disease
Cases
Year
1946_______
1947_______
1948_______
1949_______
1950.........
1951........ .
31,475
34,140
32,154
26,615
25,150
26, 538
1,405
1, 575
1,384
1,157
1,087
1,229
4.5 $7,369
4.6 7,835
4.3 9,441
4.3 9,355
4.3 9,454
4.6 10, 200
$352
292
313
297
352
388
Up to this time, no case of the common cold has
been allowed because of the impossibility of proving
that the cold resulted because of circumstances of
work . . . —Letter from Harry Nelson, Director,
Workmen’s Compensation Department, Wisconsin
Industrial Commission, February 25, 1949.
4.8
3.7
3.3
3.2
3.7
3.8
Objection to full coverage because of abuse of
the law can be eliminated through proper admin
istration of the law. The Wisconsin compensation
authorities who have had the longest experience
with the operation of full coverage, state that the
settlement of occupational disease claims is no
more difficult than adjudication of accidental
injury cases and that no special administrative
machinery is needed. Nevertheless, in some
States, the administration of the occupational
disease provisions has been handicapped by the
establishment of elaborate procedures and arrange
ments, such as medical boards, for settling occu
pational disease claims. The primary purpose of
such machinery was to safeguard against any
abuses of the coverage of occupational diseases
and to reduce the cost to industry by restricting
the number of such cases for which benefits may
be paid. Experience has likewise shown that the
initial effect of a provision for full coverage has
often been to accelerate the existing program of
injury prevention or to inaugurate a safety pro
gram where such activities have been lacking.
Where such preventive measures have been under
taken, the cost of occupational disease has ceased
to be a burden.
West Virginia adopted full coverage of occupa
tional diseases in 1949 with provision for special
procedures, including an Occupational Disease
Medical Board, for handling of such cases. In
commenting on his experience in administering
the new provision, the West Virginia Compensa
OCCUPATIONAL DISEASES
tion Commissioner stated in his 1951 Annual
Report:
The procedure set up for determining nonmedical
facts in occupational disease claims is too burdensome
to be practical. Furthermore, the Occupational
Disease Medical Board has been extremely cautious
in classification of diseases, occupational in nature,
which meet the requirements of the statute. The
prescribed procedure has often proved exceedingly
cumbersome, especially in view of the fact that the
only issue involved in many claims is the payment of
a small medical bill for’treatment.
I f the w ork m en's com p ensation la w is to he effective
as a n in s tru m e n t f o r the com pensation o f em ployees
w ho suffer o c c u p a tio n a l diseases, it w o u ld he m y su g
gestion that the procedure set u p f o r d e te rm in in g the
c o m p e n sa h ility o f o c c u p a tio n a l disease cla im s he
a bolish ed a n d such c la im s fo llo w the same a d m in is tra
tive p rocedure as tra u m a tic i n j u r y c la im s.
,
emphasis.]
[Author’s
Time and Benefit-Amount Limitations
A number of the existing occupational disease
provisions in various State compensation laws
contain time limitations requiring that to be com
pensable the disease must occur within a certain
short period after the last exposure or after the
last day of work or similar restrictions. These
time limitations, were inserted in early laws as
safeguards against unwarranted claims. How
ever, the insurance carrier representative, quoted
earlier, suggested that these time limitations be
reexamined in order to determine whether the
time periods can be extended, or in some cases,
removed altogether.3 In citing some examples of
the injustices created by these time limitations,
he states:
That such limitations are over-harsh is not difficult
to demonstrate. Let us consider a case of lung cancer
from chrome, developing 30 months after the victim,
for one reason or another, left employment in which
he was exposed to chrome. In 21 of our States in
which occupational diseases are supposed to be com
pensable, that unfortunate man’s right to compensa
tion would be barred by the lapse of time since expo
sure to employment. Likewise, a worker who suffers
disablement from chronic pulmonary poisoning from
beryllium 4 years after his last exposure to beryllium
has lost his right to compensation in the majority of
those States whose compensation laws include occupa
tional diseases. A man suffering from a long-delayed
injury—i. e., disablement—-from the effects of exces
sive radiation is in the same boat. Any of these ill
nesses may be fatal or may develop into permanent
23
total or permanent partial disability. The workman’s
right to compensation benefits is barred by the lapse of
time. He is not even entitled to medical treatment.
Because his disability is industrial in origin, he cannot
get himself within the usual group disability benefit
plans common in industry. Is there any good reason
to deny compensation in such a case, merely because
the claimant’s disability did not occur within a speci
fied period after exposure or employment? Proof of
the cause of his disability is not difficult.
Should not such time limitations either be dropped
altogether or made sufficiently long so that only occa
sional and unusual cases will be barred? The road in
this direction is already marked. In most cases where
disability is long delayed after exposure, New York
requires only that the employee or, in case of death,
his dependents file claims 90 days after disablement
and after knowledge that the disease is or was due to
the nature of the employment. Massachusetts, North
Carolina, Michigan, Missouri, Tennessee, and Virginia,
all with a large volume of industry, have provisions in
their laws under which time does not begin to run
against a claimant suffering from an occupational dis
ease until he is disabled from that disease. Experience
of employers and carriers in these States has not been
so unfavorable as to deter other States from adopting
such provisions.3
The benefit payments for disability or death or
medical care under the existing occupational dis
ease provisions are generally the same as for acci
dental injuries except with respect to silicosis, asbestosis, or other dust diseases. The fear that the
cost of silicosis and other dust diseases would be
excessive resulted in 21 States 4placing limitations
on the benefits payable for such diseases. How
ever, Wisconsin, which has paid full benefits for
silicosis since the adoption of the 1919 amendment
covering all diseases, has not found the cost un
reasonable for the industry to bear. Ohio in 1939,
New York in 1947, and New Jersey in 1951 re
moved the limitations on compensation benefits
for silicosis. In 1950, Massachusetts eliminated
the restrictions on benefits for silicosis and other
dust diseases in the granite industry with the ex
ception of a $5,000 total maximum compensation.
The experience of these States indicates that there
is no valid reason that compensation for these
diseases should be different than for other indus
trial injuries.
3 Op. cit.
'Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Iowa, Maryland,
Massachusetts, Michigan, Minnesota, New Hampshire, New Mexico, Ore*
gon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont,
and West Virginia.
24
WORKMEN’S COMPENSATION IN THE UNITED STATES
To avoid the difficulties in administration
which occur where restrictive and detailed clauses
are provided a provision for full coverage of
occupational diseases should be simple and clear.
The Federal Longshoremen’s and Harbor Workers’
Compensation Act accomplishes full coverage by
the definition of the term “injury” as follows:
The term “injury” means accidental injury or death
arising out of and in the course of employment, and
such occupational disease or infection as arises natu
rally out of such employment or as naturally or un
avoidably results from such accidental injury, and
includes an injury caused by the willful act of a third
person directed against an employee because of his
employment.5
Wisconsin also uses a simple definition of “injury”
to provide for full coverage:
. . . “injury” is mental or physical harm to an em
ployee caused by accident or disease.*8
6Sec. 2, paragraph (2).
8 Wisconsin Workmen’s Compensation Act, Sec. 102.01, paragraph (2).
The New York law which originally had schedule
coverage was amended in 1935 to provide for full
coverage merely by adding to the long schedule of
diseases covered: “Any and all occupational
diseases.” Ohio amended its law in 1939 to
provide for full coverge by adding to the schedule
“all other occupational diseases.”
A worker who is disabled by an occupational
disease is as much a casualty of industrial pro
duction as a worker who loses an arm by an
accidental injury. Workers who are injured by
industrial accident or disease should be entitled
to compensation on the same basis, and the cost
should be considered as part of the cost of produc
tion. Arguments for compensation for occupa
tional diseases are even more compelling than for
accidental injuries. As one labor commissioner
says: “A worker may be able to protect himself
from dangerous machinery but he may not always
be able to identify and control dangerous fumes,
dusts, and gases.”
V—Medical Services
Bruce A. Greene*
E
to the compensation pay
ments which an injured worker may receive are the
medical services to which he is entitled under the
workmen’s compensation law. The speed of
recovery for the injured worker, the degree of his
disability, and his restoration to maximum earning
capacity are dependent on the effectiveness of the
medical-aid provisions of the workmen’s compen
sation law.
q ual in
im p o r t a n c e
Medical Benefit Provisions
All the compensation acts contain some pro
vision for medical aid to be furnished to injured
workers. In the early legislation, the provision
for medical aid was narrowly restricted as to the
monetary amount, the period of treatment, or
both. In the later development of the acts and
particularly in recent years, the trend has been
toward granting unlimited medical benefits. In
July 1953, full medical aid was being provided by
36 of the 54 State, Territorial, and Federal com
pensation laws. Seventeen of 36 laws specifically
provide that medical aid must be furnished with
out limit as to time or amount. The administra
tive agency, in the other 19 laws, is authorized to
give unlimited medical aid. (See accompanying
table.) The remaining 18 laws impose limitations
on the cost of the medical aid or on the period of
♦ Of the Bureau of Labor Standards, U. S. Department of Labor.
time during which such aid shall be rendered, or
both. All but a few of the medical-aid provisions
include the furnishing of artificial appliances
wherever necessary.
The efforts to remove any limitations on medical
aid are usually related to the experience that ade
quate medical aid is economical. Most employers
and insurance carriers generally recognize that the
best medical care reduces their costs by lessening
the period during which such care is needed, and in
many cases, lessening the degree of permanent
disability suffered by the worker. Even in the
States with limitations on medical benefits, it is
not uncommon for the employer or insurance
carrier to provide medical care over and beyond
the legal requirements.
Several organizations and conferences have
adopted recommendations for medical-benefit pro
visions. The National Conferences on Labor
Legislation have repeatedly recommended un
limited medical benefits as the desirable standard
for State laws. The medical committee of the
Internationa] Association of Industrial Accident
Boards and Commissions (IAIABC), in its 1949
convention report, stated:
Your committee agrees that, in the case of the in
jured workmen, medical aid should not be restricted
by legal limitations and costs; that disability resulting
from industrial accident or disease should be the
responsibility of industry so long as it continues and
medical aid should be furnished on this basis.
25
WORKMEN’S COMPENSATION IN THE UNITED STATES
26
A recommendation in support of full medical aid
was made in 1952 by a Subcommittee on Industrial
Relations of the American College of Surgeons,
headed by Dr. Alexander P. Aitken, of Boston.
S ta tu to ry 'provisions re la tin g to m edical benefits
1
F u l l B e n e f it s
Jurisdiction
By ad
minis
By stat trative
ute author
ity
Arizona...............
Arkansas8______ 00
California______
xX
Connecticut____
Delaware—. _____
District of Colum
X
bia.
Florida_________
Hawaii_________
x
Idaho__________
X
Illinois8_________
X
Indiana_________
Maine8_________
Maryland_______
Massachusetts___
X
Minnesota______
X
Mississippi...........
X
Missouri.................
Nebraska_______
X
New Hampshire- _
(2)
By ad
minis
By stat trative
ute author
ity
Jurisdiction
New Jersey_____
X New Mexico_____
New York. ____
North Carolina 8. .
North Dakota___
4X
Ohio___________
Oklahoma_______
4x Puerto
Oregon ____ _
Rico_____
Rhode Island____
South Carolina___
4 X Utah 8............
4X
Washington___
X Wisconsin_______
Wyoming_______
United States:
Civil employees.
4X
Longshoremen.4X
4
44Xx
x
x
X
44 XXx
4X
4x
4x
4-4
x
xX
X
x
L im it e d B e n e f it s
Jurisdiction
Alabama___
Alaska..........
Colorado___
Georgia.........
Iowa______
Kansas_____
Kentucky......
Louisiana___
Michigan___
Montana___
Period Amount
90
days
$500
2yrs.
6mos.
1,000
10wks.8 71,500
»500
120days8 2.500
1.500
1,000
612mos.8
mos.
1.500
Jurisdiction
Nevada8___
Pennsylvania.
South
Dakota.
Tennessee__
Texas
..
Vermont8___
Virginia
West
Virginia.
Period Amount
690mos.8
days »®ii$225
300
20
1,500
14 wks.8
yr.wks.
2, 500
180
60days18
days8 131,600
12
1 Data include 1963 legislation up to June 1, 1963, insofar as available.
2 Full medical aid, in the judgment of the Arizona Industrial Commission,
is authorized through a combination of the medical care and rehabilitation
provisions of the law. Medical benefits for occupational diseases are payable
for total disability, maximum $500, and for partial disability due to listed
disease, $250.
8 In case of silicosis or asbestosis, reduced benefits.
4 After an initial period or amount, the administrative agency may extend
the time or amount indefinitely.
8 In case of occupational diseases, reduced benefits.
8 Period may be extended for additional time and amount not exceeding
$250.
7 $1,000 maximum for hospital service and supplies and $500 for medical and
surgical services. Commission may authorize an additional $1,000.
8 In case of occupational diseases, may be extended an additional 90 days.
8 May be extended for specified limited period of time.
10 Hospital services also allowed for 90 days, maximum $225.
» Also hospital benefits not to exceed $700.
12 Also hospital charges, 180 days but amount expended for services and sup
plies shall not exceed $2,500.
18 Additional $800 may be authorized. $800 may also be paid for vocational
rehabilitation. No allowance for medical treatment for silicosis.
This committee agreed that “ the need for full
medical care, including rehabilitation, under
competent supervision is recognized.”
Choice of Physician or Surgeon
The medical-aid provisions of workmen’s com
pensation laws involve the problem of the method
in selecting the physician or surgeon to attend the
injured worker. Various methods are provided
for under the laws. A survey of the provisions
for selection of attending physicians made by the
statistical committee of the IAIABC in 1949 showed
that, in most States, the law provides for the
choice to be made directly by the employer or
insurance carrier. In a few States, the selection
is made by the worker from a panel made up by
the employer or carrier. In about one-fourth of
the States, the worker has some form of “free
choice” but only a few of these authorize unlimited
“free choice.” In actual practice, it is quite com
mon for employers or insurance carriers to forego
their legal rights and allow the worker his choice
of a physician.
The National Conferences on Labor Legislation
have always recommended that the worker be
given the choice of physician. In reporting upon
this problem to the 1949 convention, the IAIABC
medical committee stated:
Unrestricted free choice as so often advocated is
not compatible with the best of care—most people
choose their physician or surgeon because of a friend’s
advice, a liking for his personality, an admiration of
his office or equipage, or a report on his charges, if not
for his availability and location alone. Thus, the man
most skilled in pediatrics may be chosen to treat a
fracture—or the man who directed the last family
confinement called to treat a spinal-cord injury. The
best cannot be thus obtained!
On the other hand, the family physician, the trusted
friend of the claimant, can frequently attain results
in cases within his competence far beyond those of his
more skilled but unknown brother.
Free initial choice retains all of these advantages
and, if under advice by a competent, skilled, and un
biased medical officer of the commission, can lead by
consultation and reference to the best of surgical care.
Y o u r com m ittee , as that o f last ye a r, believes that the
trend is i n th is d ire c tio n — that the p h y s ic ia n o f fre e i n i
tia l choice i n conference w ith a sk ille d , u n b ia se d m edical
officer o f the com m ission can best a rra n g e f o r the most
advanced a n d adequate m edical care
I n order to p r o p
e rly accom p lish th is the la w sho u ld place con tro l o f med
ic a l a id i n the com pensation a u th o rity a n d fre e i n i t ia l
choice be allow ed by r u lin g o f the com m ission
,
,
,
emphasis.]
.
,
. [Author’s
MEDICAL SERVICES
Supervision of Medical Aid
Supervision of the medical-aid features of work
men’s compensation laws includes the duties of
ascertaining whether the injured worker is re
ceiving adequate medical care, checking on the
promptness and completeness of reports required
from attending physicians, regulating charges for
medical services, and evaluating medical reports
and testimony in relation to the cause and extent
of disability. The degree of supervision exercised
over these matters varies widely among the
States. Lack of medical staff is given by compen
sation officials as one of the main reasons for
failure to provide more adequate supervision.
Less than half of the State workmen’s compensa
tion agencies have medical personnel and in many
of these States, only part-time medical staff is
available.
The control provisions of some of the workmen’s
compensation laws are meager and ineffective.
The Utah workmen’s compensation act is an
example of a law which gives effective controls to
the Industrial Commission. This law reads in
part as follows:
All physicians and surgeons attending injured em
ployees shall comply with all the rules and regulations,
including the schedule of fees for their services,
adopted by the commission, and shall make reports
to the commission at any and all times required by
it as to the condition or treatment of any injured
employee, or as to any other matters concerning
cases in which they are employed. Any physician
or surgeon who refuses or neglects to make any report
required by this section is guilty of a misdemeanor,
and shall be punished by a fine of not more than $500
for such offense.
In supervising medical care, compensation
officials state that one of the main points to guard
is that the injured worker is treated by a physician,
surgeon, or specialist whose competence to treat
the type of injury sustained has been determined
by recognized medical organizations. Inexpert
medical care often proves expensive and may have
a very harmful effect on the rehabilitation of the
injured worker. For example, improperly han
dled amputations can leave too long or too short
a stump for effective use of an artificial appliance.
In some instances, the choice of physician who
treats the injured worker has been determined
27
not by his excellence as a surgeon, but by his skill
as a medical witness. Under proper supervision,
such practices do not exist.
Medical Aid and Rehabilitation
Medical aid includes not only the primary medi
cal or surgical care, but also the rehabilitative,
convalescent, or post-operative care. This phase
of medical treatment is developing rapidly as the
result of World War II experience in returning
injured servicemen to their line of military duty.
Very few of the workmen’s compensation laws
contain any specific provision for the physical
rehabilitation of injured workers. However, the
medical-aid provisions of many of these laws are
interpreted to include such treatment. The Na
tional Conference on Workmen’s Compensation
and Rehabilitation, held in Washington in 1950,
recommended that under workmen’s compensa
tion laws—
(a) Medical care should be defined to include any
treatment and allied medical services necessary to
restore the disabled individual to his maximum level
of physical capacity. Medical aid should be unlim
ited, encompass physical medicine as well as definitive
medical care and should include the furnishing of
prosthetic appliances, and provide for the proper fit
ting and training in the use of such appliances.
(b) Full supervision and control over the provision
of medical care within the scope of the workmen’s
compensation act should be given to the workmen’s
compensation agency.
(c) The workmen’s compensation agency should
have qualified medical consultants.
Four rehabilitation centers, exclusively for
injured workers, are operated by workmen’s com
pensation agencies. They are located in Rhode
Island, Washington, Oregon, and Puerto Rico.
In addition, several similar centers are maintained
by private workmen’s compensation insurance
companies. Also, a number of privately operated
rehabilitation centers are open to all types of
disabled persons, including injured workers. The
experience thus far indicates that these centers
are performing a wonderful"service for injured
workers by speeding their return to their former
jobs or to suitable employment. The medical
and compensation cost to the employer or insur
ance carrier is at the same time being reduced in
cases handled by these centers by shortening the
28
WORKMEN’S COMPENSATION 1JN THE UNITED STATES
period and amount for medical care and by less
ening the extent of the permanent disability.
Improvement of Medical Services
The IAIABC medical committee, in its 1951
and 1952 convention reports, reiterated the rec
ommendations made as the result of the study of
medical services conducted by the committee in
1949. It submitted as a basis for working out
the details of problems in cooperation with work
men’s compensation administrators and members
of the medical profession and its organizations,
the following recommended principles:
1. A recognition of the necessity for more adequate
ly trained and skilled medical and surgical care of
injured workers.
2. A recognition that medical aid to injured workers
should not be limited by cost or other legal prohi
bition.
3. A recognition that the goal of medical aid in
compensation cases is prompt recovery, minimum
residual disability, maximum physical restoration,
and preparation of the injured worker for resumption
of gainful employment.
4. A recognition that the law should place direc
tion of medical aid in the compensation administra
tive authority.
5. A recognition that rehabilitation must begin
with first aid and continue throughout the period of
disability; that, in order for a physician to carry out
his responsibility under workmen’s compensation
medical practice, it is basic for him to consider the
total medical problem, including preparation for the
injured worker’s return to work; that the physician,
therefore, must bring to bear on these problems all of
the skills and disciplines that science and society can
offer and utilize all community resources in the accom
plishment of such objectives. [Paraphrased from
item 5 of Basic Principles for the Rehabilitation of the
Injured Worker, in a report of the Subcommittee on
Industrial Relations of the American College of Sur
geons.]
6. A recognition of the necessity for close associa
tion and cooperation between the compensation
administrative agency and the State, Provincial, and
local medical groups for the purpose of (a) procuring
and giving the medical attention recognized in
Item 3; and (b) securing written reports and advice
necessary for the rehabilitative agency’s case records.
7. A recognition of the need for more expertly
trained and better informed physicians in traumatic
surgery, occupational medicine, and physical medi
cine, to be achieved by (a) undergraduate specialized
courses in medical schools and colleges; and (b) post
graduate review by seminars, meetings, and bulletins.
An adequate and successful workmen’s com
pensation system depends materially on the
extent to which these recommended principles
are carried out.
VI—Accident Prevention
William L. Connolly*
the primary aim of workmen’s com
pensation—the alleviation of the financial burden
imposed upon a worker as a result of injury—is a
worthy one. And it has been of direct assistance
to millions of workers who would have been unable
to obtain relief under the old system of employers’
liability. Nevertheless, the greatest contribution
which workmen’s compensation has made to the
economic and physical well-being of workers is the
stimulus it has given to accident prevention efforts.
Workmen’s compensation, at best, merely
lightens the loss sustained by an injured worker.
Even the most liberal workmen’s compensation
law does not make up in full the economic loss
suffered by a worker through enforced absence
from his job, or by a family through the death of
its breadwinner. And no rehabilitation program
can restore an eye or limb to a worker, or fully
replace the function performed by the lost member.
However, accident prevention can completely free
the worker of suffering and loss from injury, and
eliminate economic waste to industry from the cost
of accidents.
C e r t a in l y
Birth of Safety Movement
The cost of compensation is actually but a small
part of the total cost of work accidents. Not
every accident results in injury to a worker,
although it may result in damage to machinery,
material, or goods in process. Not every injury
involves payment of compensation, although it
•Director, Bureau of Labor Standards, U. S. Department of Labor.
may cause some loss of working time and the
expense of first aid or medical treatment. And it
is generally accepted that the indirect or “hidden”
costs of injury—covering such factors as time lost
by employees other than the injured, cost of
replacing the injured employee, and plant and
equipment damage—amount to three or four times
the direct cost of compensation and medical bene
fits under workmen’s compensation.
It would not be correct to say that industry had
no concept of the indirect costs of accidents before
the passage of workmen’s compensation laws.
Certainly, while the full extent of those costs may
not have been appreciated, there was tangible
proof of their existence in damaged machinery,
equipment, and material.
Nor would it be correct to say that there was no
interest in industrial safety before the enactment
of compensation laws. Some understanding of
indirect costs, a degree of humanitarianism, pres
sure for safety legislation, and modification of
employer defenses under liability laws had already
given birth to a safety movement of sorts. But it
took the imposition of direct costs upon industry
in the form of compensation benefits to give it
vigor and to produce the industrial safety move
ment as we know it today. Whether employers
who were to be subject to the various laws were
also aware that workmen’s compensation would
change their attitudes toward safety is a mootpoint. But the effect of workmen’s compensation
on industrial safety is beyond question. In 1925,
a New England manufacturer, A. L. Emery,
29
30
W ORKM EN’S COMPENSATION IN THE UNITED STATES
bluntly admitted before the National Safety Con
gress that “ our first real interest in safety work was
forcibly demanded of us by passage in Massachu
setts in 1912 of the workmen’s compensation act.”
Compensation Administration and Safety
The inevitable relation between workmen’s
compensation and accident prevention was under
stood almost unanimously by the various investi
gating commissions whose studies preceded the
introduction and passage of workmen’s compensa
tion laws. In some States, too, the relationship
was reflected in either the titles or terms of the
compensation laws. For example, the Massa
chusetts act was entitled, “An Act Relative to
Payments of Employees for Personal Injuries
Received in the Course of Their Employment and
to the Prevention of Such Injuries” ; and the
preamble to the 1917 revision of the California law
contained the following statement: “A complete
system of workmen’s compensation includes ade
quate provision for the comfort, health, safety,
and general welfare of any and all employees . . .
also full provision for securing safety in places of
employment.”
More than half the States recognize this close
relationship by placing administrative responsi
bility for workmen’s compensation laws and safety
programs in the same department. (In several
States the workmen’s compensation commission
administers both the compensation law and the
safety program.) Other States usually provide for
reporting of accidents by the workmen’s compensa
tion commission to the State labor department, so
that the department can make prompt inspections
in order to prevent future accidents. A number
of States also associate safety with the adminis
tration of workmen’s compensation by providing
that benefits shall be subject to increase if the
employer neglects to make available reasonable
safeguards or, in most cases, to a decrease if the
injured employee ignores or refuses to use the
safeguards at his disposal.
Development of Safety Movement
In addition, workmen’s compensation laws have
had other major effects upon the development of
industrial safety. One of these arises from the
reporting of injuries required of employers under
such laws. Prior to their passage, there was no
means of gauging the scope or naturp of the ac
cident problem. But with the spread of work
men’s compensation to State after State, and the
extension of reporting requirements within the
various States, the scope of injury reporting
under workmen’s compensation laws has been
enlarged steadily until it now covers most
employees.
Arthur H. Reede 1estimates that in 1940, when
47 States had workmen’s compensation laws, the
employers of 92.7 percent of employees not covered
by Federal compensation acts were subject to re
porting requirements of State laws. This con
trasts with his comparable estimate of 52.8 percent
for 1915, based on 23 State compensation laws.
Although reporting under some State laws con
tinues to be required only of “subject employers”
and, in some cases, after the expiration of the wait
ing period which must elapse before an injured
worker is eligible for benefits, Professor Reede’s
estimates indicate that these restrictions affected
relatively few employees in 1940. For example,
73.2 percent of employees worked in States requir
ing reports from “all employers,” and 64.9 percent
worked in States requiring reports for injuries
causing absence from work of 1 day or less.
Noting that “the test of any law is administra
tion,” Professor Reede adds “there is abundant
evidence that with the passing of time the margin
of noncompliance with these requirements is
narrowing.”
This extension of reporting requirements has
served to place the facts concerning their own in
jury experience before an increasing number of
employers. More importantly, it has given the
safety movement a constantly broadening picture
of the extent and nature of the industrial injury
problem in the various States and in the Nation,
as indicated in a 1952 report2 to the President’s
Conference on Industrial Safety:
Since 1948, there has been an increase in the amount
of accident data available to the [State] industrial
safety agencies and in the use of these data by such
agencies in improving their safety programs. Over
half of the States reported that current reports of all
1 See Adequacy of Workmen's Compensation, Cambridge, Mass., Harvard
University Press, 1947.
2 Report of the Conference Committee on Laws and Regulations on a sur
vey undertaken at its request by the Bureau of Labor Standards.
ACCIDENT PREVENTION
disabling injuries (lost time of 1 day or more) are avail
able to the industrial safety staff. Other States re. ported that more limited reports of accidents were
available to their safety staff.
Accident data are used by the safety agencies in a
variety of ways. A number of the agencies indicated
that accident reports are an essential factor in plan
ning general inspection activities or in the special in
vestigations of accidents of a more serious nature.
They are used as a guide by safety staff in making
special services available to employers looking to the
correction of hazards. In one State each accident re
port is analyzed and entered in the firm’s record with
indication as to potential cause and the inspector in
the area receives a condensed copy of the record each
quarter. Some agencies computed frequency and
severity rates for various industries for comparison
with the records of individual plants, and to help the
employers work out a suitable plant safety program.
The method of assuring payment of benefits
under workmen’s compensation laws in the United
States has also played a major role in shaping the
development of our safety movement. In con
trast with the prevailing system in Europe and in
Canada, which emphasizes group liability, we have
placed heavy emphasis on individual performance.
Through self-insurance and merit-rating, our sys
tem has made it possible for larger employers to
realize practically all of the savings in compensa
tion costs achieved by a reduction in work injuries.
The resulting impetus to safety work in larger
establishments has helped to produce spectacular
reductions in injuries by large employers, including
employers in fields which once were considered as
highly hazardous. At the other end of the scale,
our system of elective coverage and numerical and
other exemptions have served to remove from a
number of employers the financial urge to prevent
accidents. In between the two extremes are the
employers who have their compensation obliga
tions underwritten by insurance carriers and do
not benefit so immediately or so fully from reduced
injuries as do the larger employers. The impetus
to safety exists for such employers, but not to the
degree that it does in the case of larger establish
ments.
In general, there is corresponding variation in
the safety accomplishments of the different sizes
and categories of employers. However, this corre
lation is not universal since workmen’s compensa
tion is but one of the factors underlying the safety
31
movement. The initial drive and direction fur
nished by workmen’s compensation has been
supplemented by such voluntary safety activities
as those of the National Safety Council, the
National Fire Protection Association, the Ameri
can Standards Association, and trade associations,
and the informational, promotional, and enforce
ment work of State and Federal agencies.
Savings From Safety
Safety activities in general are predicated upon
the assumption that they are less expensive than
accidents. Broadly, considering the human values
and the indirect costs of injuries, there can be
little doubt of the validity of that assumption. It
has been documented, too, in records of the
National Safety Council,3 which contain ample
evidence of the savings achieved through safety
activity. For example, 1 large company, operating
4 plants, reduced its annual costs for medical
examinations, first aid, and compensation from
more than $20,000 to $1,900 in 4 years; and
intensive safety work undertaken by a construc
tion company saved $33,456 within 6 months of
its inception.
Neither savings nor costs of safety programs are
limited to compensation. It is difficult if not im
possible to obtain comprehensive figures on costs,
principally because of the fact that they are so
widely distributed that isolation is extremely
difficult. Some indication of this, as well as of the
vast savings which can be achieved in compensa
tion costs, can be drawn from the recent experience
of the Bureau of Ships of the U. S. Department of
the Navy.
As a result of an intensive program, the Bureau
of Ships succeeded in reducing the number of
deaths resulting from work injuries from 100 in
1946 to 4 in 1951. According to the Bureau of
Employees’ Compensation of the U. S. Department
of Labor, the cost of compensation and medical
care in fatal injuries to Federal employees aver
ages $35,000. Thus, had the Bureau of Ships’
1946 death toll persisted, it would have cost the
Federal Government $3,500,000 in 1951, so that
the actual reduction in deaths saved $3,360,000 in
* Published in the 1942 edition of Accident Facts.
32
WORKMEN’S COMPENSATION IN THE UNITED STATES
the latter year alone. Concurrently, the Bureau
reduced its injury-frequency rate from 20 in 1946
to 5 in 1951, thereby considerably increasing the
savings.
In reporting on the reduction, the Bureau’s
Safety Engineer noted that “the most continuously
effective part of the Bureau of Ships’ program is
concerned directly with supervisors and employees.
Safety is so much a part of supervision that safety
responsibilities and functions are written into the
individual supervisor’s position description.” This
quotation points up the difficulty of segregating
the cost of even one important segment of the
Bureau’s safety program. However, since the
additional work was imposed upon existing staff,
it is safe to say that the cost was negligible com
pared to the enormous savings achieved.
Similar examples of savings in compensation as
a result of safety activities in 7 States and the
District of Columbia were reported to the 1952
meeting of the President’s Conference on Indus
trial Safety:
A rkansas: 9.9 percent reduction in workmen’s com
pensation insurance rates in 1951 with no change in
benefits.
D istrict of Colum bia: a decrease of 35 percent in the
all-injury frequency rate in the 9 years following the
passage of industrial safety law, which resulted in a
26 percent reduction in compensation insurance rates
in the face of liberalized benefits for injured workers.
Illinois: a 10 percent reduction in compensation
premiums in the period 1948 to 1951, accompanied by
a 30 percent increase in benefit payments.
Indiana: compensation rates lowered 20 percent
during 1950 and 1951, while benefits were increased by
25 percent.
K an sas: a 5 percent decrease in insurance rates dur
ing the same period, also with a liberalization of
benefits.
M innesota: no specific figures quoted, but report
noted that a raise in benefits called for only a slight
increase in compensation insurance rates because “of
the downward trend in accident frequency and
severity.”
Oregon: compensation rates decreased 30.5 percent
from 1944 to 1951, while benefit rates increased
nearly 75 percent.
Rhode Island: compensable injuries reduced 49.2
percent from 1945 to 1949, with a reduction of 8.5 per
cent in premiums and 13.3 percent increase in benefits
in 1949 and further rate reductions in 1950 and 1951.
Combined these changes effected annual savings of
$3,360,000.
The program which accomplished the notable
reduction in workmen’s compensation insurance
costs in Rhode Island was described at the 1949
meeting of the President’s Conference by United
States Senator John C. Pastore, then Governor of
Rhode Island, as follows:
It is 4 years since we in Rhode Island set this
cornerstone in our safety foundation. Until . . .
1945, our safety laws were written in terms more or
less general, [and their] interpretation . . . was left
to the industrial inspectors. . . . Not unnaturally
and not infrequently there was . . . a serious defi
ciency in safety standards.
We recognized the need for more effective accident
prevention measures. So our General Assembly
created . . . a Special Commission To Study Codes
and Rules for Safety and Health in Places of Em
ployment.
The Commission made a competent investigation
of facts, exploring the need for codes by the use of
all available accident statistics accumulated in our
State over a period of years. Their aim was a deter
mination of this question: Was it practical to con
struct by means of mandatory requirements a “floor”
for safety and health—this “floor” to represent the
minimum conditions which would be permitted in
places of employment? . . .
Out of [the Commission’s findings and recommenda
tions] came the act constituting the Industrial Code
Commission for Safety and Health which I signed into
law on April 28, 1946.
This Commission was duly appointed and immedi
ately activated in the setting up of industrial safety
and health codes. Seven codes have already been
adopted and put into effect. Four additional codes
are in the process of preparation.
Ready acceptance of these codes on the part of
management, sincere cooperation in complying with
their requirements are highlights in our code-making
experience. . . .
A State safety foundation saves lives and money.
It is a good investment. It deserves adequate appro
priations . . . The 37 States replying to an inquiry
by the Bureau of Labor Standards reported that they
spent a little less than $6 million in the last year on
safety work . . . an average of 23 cents per worker
. . . But almost half of those States spent 10 cents or
less per worker. How does that compare with the
conservative estimate that last year’s industrial acci
dents cost American industry and labor over $90 per
worker?
The inadequacy of our appropriations is even more
evident if we translate them into people and service.
The 48 State agencies reporting on this question had
a total of 1,018 inspectors. . . . Most of [the States]
said they needed double their present staff—or
better—to do an effective enforcement job.
ACCIDENT PREVENTION
. . . I view enforcement as a last resort—not as a
first. The purpose of enforcing a safety law is not
prosecution but prevention—it is not to punish for
violation but to save human life or prevent bodily
injury.
Our experience in Rhode Island shows that this can
ordinarily be better done by safety promotion. For
the majority of accidents today do not arise from a
violation of any law but from a variety of other causes.
To reach and remedy those other causes, safety promo
tion, education, and consultation are required. . . .
[Therefore,] to industrial plants our inspection
division offers a continuing service in six phases:
(1) Services in analyzing accident reports and
reporting methods.
(2) Assistance in developing overall safety
organizations within the plants.
(3) Assistance in the development of safety
committees.
(4) Visual education services.
33
(5) Specialized consulting services on indi
vidual problems requiring considerable personal
attention or technical knowledge.
(6) Assistance to management in determining
accident costs and providing suitable instruction
in conducting such cost analysis.
Our pressing need is to sell top management, espe
cially among these smaller firms, on the importance
of constant, active direction of the company’s safety
program. We need, as well, the active cooperation of
the workers.
History testifies to the tremendous effect of
workmen’s compensation upon the stimulus and
direction of the safety movement in the United
States. Such evidence as is available indicates
the enormous savings in compensation costs, as
well as in other financial and human values, which
accident prevention has made possible.
VII—Problems of Administration
P aul E. Gurske *
A l l w o r k m e n ’s c o m p e n s a t i o n j u r i s d i c t i o n s ,
whether operating through State funds or private
insurance carriers, face essentially the same kinds
of administrative problems. These fall into two
broad types: the procedures and practices at
tendant to hearings, and the day-to-day operating
matters. While most of the discussion in this
article relates specifically to the experience of the
Oregon State Industrial Accident Commission,
the general applicability to other situations will,
I hope, prove useful.
Authority and General Procedures for Hearings
The authority of the workmen’s compensation
commission to conduct hearings is usually con
tained in the general powers given to the com
mission to administer the provisions of the work
men’s compensation act. Under the same grant,
the commission can appoint assistant commis
sioners, experts, clerks, etc. In Oregon, each of
the three Commissioners and the assistants is
given authority to hold sessions at any place
within the State, to administer oaths, and to
provide for the service of subpenas (to which the
State circuit courts are empowered to compel
obedience and to punish any disobedience), for
the attendance of witnesses and the production
of papers, accounts and testimony, and also,
generally, for taking of testimony and for record
ing of proceedings.
As in many other States, the Oregon legislation
does not prescribe particular rules for hearings,
♦ Chairman, Industrial Accident Commission, State of Oregon.
34
and the Commission’s procedures and practices
have been developed under its broad general
authority. Simplicity is the essence of good
hearings technique, and the Oregon Commission
has always adhered to a simplified procedure.
We believe that the general law of administrative
procedure, which protects the rights of all con
cerned, gives us ample authority to proceed
without prescribing and publishing definite rules
of procedure. It is our experience that definite
rules only serve to complicate what should be an
entirely simplified and orderly procedure. There
fore, we endeavor to eliminate all unnecessary
technicalities from our hearings, and this philos
ophy governs the procedures used in the different
kinds of hearings conducted by the Commission.
Types of Hearings
Whenever a fatal industrial accident occurs in
Oregon, we conduct a hearing immediately, not
necessarily for the purpose of fixing blame or
responsibility, but in order to preserve the facts
and to determine the safety factors involved,
with a view toward prevention. Similar hearings
are conducted in connection with safety factors
involved in other injuries to workmen, especially
where the circumstances are unusual. In such
hearings we usually subpena the employer and
witnesses to the accident, and the testimony is
taken under oath.
Compensation hearings are held under the
provision of the Oregon law that a workman who
is dissatisfied with the Commission’s action on
his claim may, within 60 days, petition the Com
PROBLEMS OF ADMINISTRATION
mission for a “rehearing.” The claimant's appli
cation for rehearing must set forth in full detail
the grounds upon which he considers the Com
mission's order, decision, or award unjust or
unlawful, and it must include every issue to be
considered by the Commission, as well as a general
statement of the supporting facts upon which he
relies. The claimant shall be deemed to have
waived all objections, irregularities, and illegalities
concerning the matter upon which rehearing is
sought other than those specifically set forth in
his application. Pursuant to decisions of the
Oregon Supreme Court, such petitions need not
be couched in formal legal language, but nearly
all are actually prepared by attorneys.
Upon receipt of the petition, the Commission
immediately fixes a time and place for the hearing.
Notice is sent not only to the workman and his
counsel, who usually makes an appearance, but
also to the employer.
“Rehearing” Procedures
The procedure followed at rehearings reflects
the fact that we treat them more as administrative
investigations than as judicial trials. Technically,
the Oregon Commission has quasi-judicial func
tions, but it is of the opinion that a board or com
mission, being an administrative agency, should
not act as a court. Therefore, strict rules of evi
dence, such as are applied in the courts, are not
adhered to, and great latitude is given to claimant
and counsel in presenting evidence. Further, other
than the simplified petition for rehearing already
described, no papers are required to be filed by the
claimant under Oregon law—no motions or de
murrers, nor any written answer. If it should
appear that any matter concerning the claim is
jurisdictional, this can be stated in the hearing.
In short, in striving for a simplified procedure, we
try to subordinate the forms and rules to the sub
stance of what should be accomplished. Our re
hearings procedure has not been questioned over
a period of many years, and we have been con
tinuously advised that it is entirely in accordance
with law (and specifically with the Fourteenth
Amendment to the Constitution, which provides
that no person shall be deprived of life, liberty, or
property without the due process of law).
We also realize that our compensation hearings
can be conducted fairly only by officers who are
35
unbiased, experienced, and qualified in adminis
trative hearings procedure, nor will we permit
politics to interfere with the impartiality of our
rehearings. Hearings officers, selected on the basis
of these criteria, are called referees, and they are
instructed to conduct hearings in a completely
impartial manner and as informally as possible.
The commissioners themselves, either individually
or as a group, occasionally conduct hearings,
especially important ones. Five assistant attorneys
general who are assigned to the Commission are
available upon request to sit in on cases where it
appears that a legal problem is to be presented
which would require their immediate advice.
Most often, however, the only persons present are
the referee, claimant, his attorney, and the
reporter. The act does not require the claimant to
be represented at hearings by counsel, however,
and he may represent himself if he wishes.
In some States, it is deemed entirely proper for
the hearings officer to conduct the preliminary
examinations of the claimant and other witnesses,
giving opportunity to claimant's counsel to ques
tion or cross-examine those who testify. Such a
procedure does save time and also assures that all
essentials of a complete hearing are presented,
but it is used only occasionally in Oregon, where it
is not generally favored by attorneys. Our more
usual procedure is for the referee, at the outset of
the hearing, to invite counsel for claimant to state
for the record his position on the issues; this is
especially helpful to the Commission when there
are complicated issues. Counsel for claimant may
also introduce as exhibits such medical reports and
other documentary evidence as would be of aid,
without the need for formal identification or
authenticating testimony.
At some hearings, of course, the employer wishes
to register objections. Under the Oregon law,
employers' contributions vary according to the
hazard of the industry in which they are engaged,
such as one rate for logging and another rate for
construction. (One cent per day is deducted from
the workman's wage.) This base rate can be re
duced up to 50 percent if the employer has a
favorable experience with respect to accident costs
over a specified period of time. If, however, his
accident costs exceed 70 percent of his contribu
tion, then the favorable experience rating is lost.
Hence, the employer is interested in rehearings or
appeals for increased compensation. He may
36
WORKMEN’S COMPENSATION IN THE UNITED STATES
either appear personally or be represented by
agent or by counsel and has the privilege of
questioning the claimant and his witnesses.
At the conclusion of the hearing, if it appears
desirable because of the claimants physical condi
tion or other circumstances, the referee may ar
range for immediate further medical examination.
In many cases, too, the hearing is followed by an
informal, off-the-record discussion between the
referee and the counsel for claimant. This saves
unnecessary record and is a great aid to the Com
mission in resolving the issues and helping the
parties to reach a satisfactory agreement. Im
mediately after the end of the proceedings, the
referee dictates to the reporter his recommenda
tions to the Commission and his impressions of
the claimant and the entire proceeding. The
record is forwarded at the earliest practicable time
to the main office of the Commission for review;
following this, the petition is either denied, or the
claim is reopened for appropriate action, e. g., for
further medical care, for increased compensation,
or for arranging with claimant’s counsel some
other amicable adjustment.
Other Protections for the Worker
If the workman is dissatisfied with the Com
mission’s action upon the rehearing, within 30
days thereof he has the right to appeal to the State
circuit court. In that appeal he is limited to such
issues of law or facts as were properly included in
his petition for rehearing. The appeal is tried
de novo , and the claimant is entitled to a jury trial,
as in other civil actions. The rules of evidence,
as in civil actions, apply to these appeals.
Throughout these rehearings or court appeals,
fees for attorneys who represent the injured work
men are contingent upon their securing an increase
in compensation. Fees are based upon an agree
ment between the Commission and the Oregon
State Bar Association, which calls for 20 percent
of the increase, with a maximum of $750. Fees
are payable only as and when compensation is paid
to the claimant.
The worker is also protected by the fact that
the Commission’s simplification of procedures ex
tends to the prehearings stage of claims processing.
For instance, if, when an injured workman files
his claim with the Commission, we were required
to ask him to adhere to strict court rules of evi
dence, it is conceivable that we would have to hire
a huge staff of investigators and legally trained
people, as well as asking for the assignment of
additional assistant attorneys general. Under
such a procedure, the processing of claims would
be interminable, and the workman would be sadly
neglected at a critical time when he needs aid.
We feel that our legislature never intended this to
happen, and hence we act on reasonable and re
liable information, especially where the employer
and the first medical doctor furnish acceptable
proof showing the relationship of the accident to
employment and of the injury to the accident.
Over and above all these protective measures,
the Oregon act provides that an injured workman
who has filed a valid claim may, within 2 years of
the first closing order, reopen his claim for further
benefits in the event his condition becomes ag
gravated. Following the 2-year period, the Com
mission may reopen any claim on its own motion
for additional benefits if the treating doctor ad
vises the Commission that the workman has devel
oped further disability which has a causal connec
tion with the worker’s original accident. Thus,
the door of the Commission is always open to the
injured workman and to his counsel and to his
employer to assist the Commission in accomplish
ing speedy justice to the injured workman and to
his ultimate rehabilitation.
Operating Problems
For many workmen’s compensation adminis
trators the extent of the pay lag is the most
persistent and omnipresent problem. Its causes,
in turn, embrace many of the problems encoun
tered in the benefits or claims payment section—
such as claims flow, filing, accounting procedures,
and personnel utilization.
Herbert W. J. Hargrave in Michelbacher’s “ C a s u a l t y I n s u r a n c e Principles”
(McGraw-Hill Book Co., Inc., New York and
London, 1930) states: “The highest duty of the
claims man is so to organize his department that
compensation benefits will be paid with exact
promptitude, as the desired effect of the legislation
is lost if the injured does not receive the benefits
until a considerable period after the time he is
entitled thereto.”
This promptitude, or rather, the lack of it, is
P a y Lag.
PROBLEMS OF ADMINISTRATION
called pay lag in the field of workman’s compensa
tion and is defined as the period between the date
of accident and the date of first payment. Pay
lag can be broken down into three periods: (1)
from the date of accident to the date of receipt of
the claim form; (2) from the latter date to the
date upon which enough information is supplied
to permit positive action on the claim; and (3)
from the time action can be taken to the date of
payment. Each contributes to the extent of time
lag, and at first glance it would seem that the
administrator can do little except reduce the third
period. In Oregon, the administrator has little
or no direct control over the greater part of the
time lag since it occurs prior to actual processing
of the claim.
That period between the date of injury and the
date of receipt of claim in many cases is unneces
sarily lengthy, with the major part of the lag
directly traceable to either the employer or the
treating physician, each being required, in Oregon,
to fill out one section of the workman’s claim.
Too often, the usual aversion of physicians to
“ paperwork” is reflected in withheld claims,
sketchy and insufficient data regarding type and
extent of injury, and tardy reports. Oregon
attempted at one time to improve this situation
by paying a premium for the first call by a doctor
if his report was submitted in 48 hours. However,
administrative problems created by the tide of
partially completed claim forms, i. e., the doctor’s
section only, and the attendant confusion created
by misspelled names, soon necessitated changes in
the procedure under which the premium was paid.
Claims are delayed by the employer to a much
lesser degree. In those States where a statutory
time limit, with penalties for late filing, is placed
upon the employer for reporting an injury to a
workman, very little time lag is noted.
Because of the utterly impersonal system pecul
iar to a State fund, proper and complete filling
out of the claim forms is vital in the determination
of the time-loss payment due the injured worker.
Although Oregon’s “ three way” claim form
clearly states that all questions should be answered,
nearly 14 percent of all claims presented in Oregon
require additional information prior to validation
or payment. Workmen are prone to omit such
highly important data as date, time, and place of
accident, the mechanics of the accident, and other
37
information which would help the underwriter
to establish the validity of the claim. Also the
marital and dependency status and period of time
loss, both of which are required to determine the
rate and amount of compensation, are frequently
ignored. These omissions may be due to inad
vertence or carelessness, or they may be inten
tional. Perhaps they can be attributed to the
average American citizen’s passion for privacy,
i. e., a “ that’s none of your business” attitude, or
to fear of an imagined “ bureaucracy bent on
denying rightful benefits.” Correspondence to
obtain information which should be contained on
the claim form is both time-consuming and expen
sive, even when confined to form letters, and
pyramids an unnecessary addition upon already
high costs. This problem is especially complicated
in Oregon because of the unique “no waiting
period” provision of the law, which generates a
greater percentage of time-loss claims than nor
mally found in States that have a waiting period.
An extensive educational program, involving
the cooperation of the press, labor and manage
ment periodicals, labor organizations, medical
professional groups, and the safety committees of
employer and employee groups, is essential in
eliminating these contributory causes of excessive
pay lag.
That part of the time lag which occurs after all
information needed to process the claim is in the
hands of the Commission, while shorter than the
two periods previously discussed, is the most
important to the administrator, for it is the one
over which he has nearly complete control. Con
tinual scrutiny of the whole claims processing
operation can result in many savings of time, and
consequently, costs.
Claims Flow . As an example, we have found that
transportation of claims in the course of processing
them, while seemingly insignificant, presents a
very real problem, and one which can benefit from
minute inspection. The location of sections, and
of personnel within the various sections, is de
pendent upon the flow of claims, and a thorough
initial study of the problem must be made and
the results perused frequently.
The average employee works most accurately
and speedily in the morning. He also works
better with a relatively small amount of work
38
WORKMEN’S COMPENSATION IN THE UNITED STATES
always ahead of him; if his desk is piled high with
work, a peculiar feeling of frustration slows him
down. Thus, we deliver only moderate amounts
of files, and the deliveries are more frequent in the
morning than in the afternoon. Further, we have
noted that the performance of successive steps in
claims processing at adjacent desks eliminates the
need of personnel for delivery and actually stim
ulates employee efficiency when proper supervision
is applied. Such a procedure requires stringent
personnel screening to insure that employees in
the “chain” have nearly equal productive capacity
in order to avoid a “pile-up” of claims. In
addition, of course, personnel must be selected
with a view to eliminating personality conflicts as
far as possible and to stimulating a friendly rivalry
for attained efficiency among the employees, a
condition not difficult to foster in a continuous
flow procedure. The one drawback to this pro
cedure—the obvious tendency of employees to
engage in excessive extraneous conversation—can
be kept at a minimum through careful supervision.
F iling System . Filing, regarded by many persons
only as a necessary evil, is the very backbone of
an administration’s efficiency, because without an
accurate and easily accessible filing system, the
myriad pieces of mail which are received daily on
current and closed claims could not be processed
properly. Further, under the Oregon law, claim
files (or microfilms thereof) must be kept indefi
nitely, because the Commission may reopen a
claim at any time regardless of the period of time
which has elapsed since the date of injury, because
of aggravation of the worker’s physical condition
if, in the opinion of medical advisers, there is
sufficient causal relationship to the original injury.
After experiencing considerable difficulty be
cause of the unavailability of files, Oregon adopted
a procedure which insures that all claims, except
those actively being processed, are in file and
which, therefore, enables personnel to file mail and
other documents and to pull claims for action far
faster than formerly. Before the change, depart
ment heads, wanting to insure possession of files
upon which action was pending, started depart
mental filing systems as an expedient. The filing
system soon was composed of a little-used main
file and many small departmental files, which
increased the time required for filing and hindered
the free flow of needed claims. Our partial
solution of the problem was to move the general
files to a more central location in the Claims
Division, flatly abolish the little departmental
files, and require the department heads to request
only those files needed for current processing,
which were to be returned to the general file
immediately upon completion of processing and
not held while action was pending. This pro
hibition of departmental files aids materially in
reducing the time lag.
Checking and Accounting Procedures . The actual
processing of a claim is a relatively standardized
procedure, and very little can be done to speed up
the method. Certain questions on the claim form
must be answered properly before the claims can
be processed. However, the very fact that the
same questions—in the same location on all claim
forms—must be answered on every claim led us
to consider a new system of checking. Why not
construct a cut-out card for each claims man to
place over the claim form which would blank out
all items except those to be checked by him, thus
blotting out all distractions for each job in the
chain of processing? One minor drawback to this
ingenious device is the periodic receipt of claims
on forms issued many years ago, which cannot
be processed in this way. Application of the pro
cedure is also hindered for a time following any
change in the claim form which, in any event,
requires that all employers, doctors, and employee
groups be circularized explaining the new form,
instructed to destroy old forms, and furnished a
supply of the new form, which is a somewhat
costly operation. This method requires much
planning, research, and reallocation of work
among processing personnel, but may be a key
to attaining greater efficiency.
The production of checks for claimants, doctors,
hospitals, and other medical auxiliaries [a problem
only for State fund jurisdictions] was very timeconsuming until we installed a complete punchcard system, because the allocation of costs to each
employer’s account, to each rate class, as well as
to each claim, created a huge clerical problem.
Now, not only does the fund more quickly produce
checks for all types of payments^ but the account
ing department can give more prompt notifications
of claim costs chargeable to an employer’s account,
PROBLEMS OF ADMINISTRATION
of contributions due, or of contributions received.
Also, the resummarization of all claim costs paid
and contributions received and allocation to the
various rate classifications and periods involved is
a fast, almost automatic process. And, inasmuch
as the computations are an adjunct of the cash
received and the claim costs paid or awards setup,
all statistical byproducts of the system can be
balanced. The change also settled the argument
between the accounting and actuarial divisions
regarding priority of processing and information,
because the production for each was nearly simul
taneous. It also brought the funds to full use of
punchcard equipment for all accounting, both fiscal
and administrative. Although the step is a very
great one, we would recommend that other State
funds investigate the advantages of changing to
machine accounting.
Personnel .
We realize that without proper, welltrained personnel, all the administrative and edu
cational panaceas go for naught. It is a subject
about which all administrators can moan in
unison.
Much of the difficulty encountered by a State
workmen’s compensation administrator can be
traced directly to relatively low personnel utiliza
tion which results from low personnel standards
or high personnel turnover, or both. Legislators
39
are prone to regard workmen’s compensation as
just another governmental function requiring the
usual run of clerical employees, whereas it is a
highly specialized field of casualty insurance, re
quiring experienced, well-trained personnel. In
many instances, compensation administrations
have become free training schools for private enter
prise, because many exemplary workers, after they
have become proficient, have been induced to leave
public employment for the more adequate salaries
paid by private business. Most of those remain
ing fall into the categories of either dedicated
public servants or marginal employees. The solu
tion of this problem also lies in an educational
program—one directed to the public and to the
legislators who control the purse strings either
through appropriation or budget review.
One sidelight of the general problem of personnel
utilization is the definite tendency for inter
viewers who listen to the complaints of injured
workmen over a long period of time to become so
calloused that they lose their perspective and
objectivity in judging the facts presented. Oregon
has solved the problem by periodically shifting
the interviewers to other jobs for which they are
qualified. This policy has improved our public
relations with claimants by assuring a sympathetic
but objective hearing, and has increased the effi
ciency of the employees involved.
VIII—Rehabilitation
Jer o m e P o llac k*
W
workmen’s compensation legislation set
out to provide medical care and replace lost in
come for injured workers, it embarked on a course
that could not be complete without a third goal—
the rehabilitation of the worker to optimal family,
social, and economic life. This goal is potentially
the most significant improvement in the concept
of workmen’s compensation.
The original legislation was based on an essen
tially static concept of disability. The medical
care of the day was relatively limited. When
first aid and medical treatment had been rendered
there was little to do but accept the residual inca
pacity as it stood. The medical care required by
statute usually ended after the initial healing
period and the program thereafter dealt primarily
with cash payments. Compensation for perma
nent partial disabilities was based on indemnities
fixed by statute for specified losses. It was as
sumed, moreover, that the “loss of both hands, or
both arms, or both feet, or both legs, or both eyes,
or of any two hereof shall, in the absence of con
clusive proof to the contrary, constitute permanent
total disability.” *1 Where further treatment held
no promise, the tendency to establish fixed liabili
ties for fixed losses was both humane and practical.
The rise of rehabilitation, however, has intro
duced infinitely improved means of regaining lost
health and overcoming loss of function. It has
narrowed the area of permanent disability so that
hen
*Of the Social Security Department, United Automobile Workers (CIO).
permanent total disability is a common provision. Quotation is from the New York law.
1Presumptive
40
today it scarcely has any valid meaning except to
the extent that rehabilitation is unsuccessful or
not feasible. Certainly it has shattered the notion
of presum ptive permanent and total disability.
It has opened the prospect of improved methods
of evaluating disability which would overcome
some of the deep-seated deficiencies of the system.
Rehabilitation cannot, of course, be the sole objec
tive of workmen’s compensation, although such
assertions are sometimes'loosely made. But it
offers a set of services essential to the proper
functioning of workmen’s compensation legisla
tion; the availability of these services to injured
workmen is supported by compelling reasons of
social and economic policy;
Nature and Effectiveness of Rehabilitation
In part, rehabilitation is an outgrowth of work
men’s compensation experience. Compensation
administrators soon recognized the incompleteness
of the legislation and gave the movement for
vocational rehabilitation “its most direct and
substantial support.” 2* Their efforts paved the
way, when the First World War came, for the first
national legislation for rehabilitation of veterans.3
The war enlarged the need for rehabilitation and
stimulated awareness of its potentialities. Reha
8Federal Grants for Vocational Rehabilitation. By Mary E. MacDonald.
Chicago, University of Chicago Press, 1944 (p. 11).
* See Rehabilitation and Employment of the Injured Workman. By
Colonel John N. Smith. (In Workmen’s Compensation Problems, U. S.
Department of Labor, Bureau of Labor Standards, 1953. Bull. 167, pp.
222-226.)
REHABILITATION
bilitation centers began to be established. Legis
lation followed, providing a financial base and
establishing organized programs of rehabilitation
successively for veterans, the industrially disabled,
and the general population. There emerged the
modern concept of rehabilitation made possible by
great advances in the general practice of medicine,
in orthopedic surgery, physical medicine, and
other medical specialties; and by the pioneering of
specialized institutions for the care of the disabled,
which had served such groups as handicapped
children, the ruptured and crippled, the deaf, and
the blind, and which had stimulated, concentrated,
and coordinated efforts to overcome disability.
Modern rehabilitation has been defined as “the
restoration of the handicapped to the fullest physi
cal, mental, social, vocational, and economic use
fulness of which they are capable.” Its practice
has developed in two segments: m edical, aimed at
maximum recovery of health and the fullest pos
sible restoration of lost function; and vocational, to
promote an optimal economic adjustment, through
vocational counseling and training, transitional
employment, and placement services. Currently
the psych osocial elements of evaluation, social
service, personal counseling, psychometrics, recrea
tion, and psychiatric service are recognized as a
third coordinate segment. Each segment is a
composite of many disciplines. In severe cases,
the necessary medical specialists may include: “A
general surgeon, an orthopedic surgeon, a neurosur
geon, a plastic surgeon, an internist, a urologist, a
roentgenologist, a doctor of physical medicine, a
psychiatrist, and sometimes others . . . indis
pensable for the proper handling of a single case
. . .” 4 And before rehabilitation is completed,
many nonmedical specialists may have to be called
upon. Integration of the diverse disciplines, serv
ices, and facilities toward a single goal is the crucial
administrative problem. The goal is total rehabil
itation. The process cannot stop with the best
artificial appliance and its most skillful use if the
worker is unable to cope with his social environ
ment or his employment. Proper rehabilitation
thus necessitates the availability, where needed,
of all the component services and of the institu
tions which house and coordinate their work.
8 Rehabilitation of the Disabled. Washington, United Mine Workers of
America Welfare and Retirement Fund, [1950?] (p. 10).
41
Of its effectiveness there is hardly room for
question. The will to live revealed by many
persons despite the most severe afflictions, their
courage and resourcefulness, combined with the
new ways to achieve restoration, inspires the
common designation of “miracles.” Many ac
counts could be cited which recall Biblical passages.
A history of the Institute for the Crippled and Dis
abled is appropriately entitled “Take Up Thy
Bed and Walk.” 5 Dr. Howard Rusk has given
an inspiring account of the rehabilitation of 500
paraplegics 6 under the program sponsored by the
United Mine Workers. These were—
. . . the toughest cases that anybody ever saw,
bar none. You always like to tell about your worst
case, but there were many as bad as this one:
This man was 40 years old and his back was broken
20 years before. How he survived that length of time
I don't know. When he was found . . . he . . . had
not seen a doctor in 3% years. There was not even
a wagon road to his house and he was carried down
in a sling between two bed poles by friends. The man
had 11 bed sores from the size of a plate to the size of
a dollar; stones in both kidneys and his bladder, and
his lower extremities were almost up under his chin.
You might ask, is it worth fooling with a person like
that? He thought it was. He wanted to live. And
we felt we had an obligation. It took 26 surgical pro
cedures and 13 months before we could even start to
train this individual. . . . We trained that man to
walk, swing through a gait on crutches in 90 days,
and in control of automatic bladder and automatic
bowel. And during the last 3 months of his stay in
the institute he ran for sheriff in his county . . . and
he has been the sheriff there for more than 3 years.
New ways of rehabilitation hold promise of still
newer ways and broader applications. Rehabili
tation is being extended to mental illness, heart
disease, epilepsy, blindness7 and aging.8*10 Its
horizons are expanding and the hope it holds for
tomorrow makes it all the more important to
perfect the institutional arrangements to bring
rehabilitation to the disabled.
8By
David Hinshaw. New York, Q. P. Putnam’s Sons, 1948.
• Hope for paraplegics is in itself a startling innovation. “Until the last
10 years,” as Dr. Rusk has pointed out, “paraplegics had been no problem
because the mortality rate was 90 percent the first year. There were 400
paraplegics in World War I. Only two are living today . . . In this war
it was a different story. We had 2,500 and they didn’t die because you could
control their infection and we knew about the management of their bed
sores.” (In Application of Rehabilitation to Workmen’s Compensation,
Medical Aspects of Workmen’s Compensation, Commerce and Industry
Association of New York, Inc., 1953, p. 62.)
T See Annual Report of the Federal Security Agency, 1952. Washington,
Office of Vocational Rehabilitation (pp. 251-275).
•See Rehabilitation of Older Workers. Edited by Wilma Donahue.
Ann Arbor, Mich., 1953.
42
WORKMEN’S COMPENSATION IN THE UNITED STATES
Provision for Medical Rehabilitation
From the beginning, workmen’s compensation
legislation accepted, at least in part, a responsi
bility for restoring health which often extended
into medical rehabilitation as it then existed.
True, restrictions on the total cost or duration of
care were the rule. Nevertheless, more than a
third of the laws enacted by the end of 1919
defined medical care to include such items as
“crutches and apparatus,” “artificial limbs,”
“mechanical appliances,” and the like and it is
probable that other States also furnished them
under the general provision that “all necessary”
or “reasonable” services, medicines, and supplies
were to be provided.
Although medical rehabilitation was partly
anticipated, it was largely an unforeseen develop
ment requiring a greater emphasis on medical
care, a broader scope of services, and possibly a
reexamination of the arrangements for medical
care.
Progress toward adequate medical care, how
ever, has been slow. One authority poses the
problem as follows: “Those laws which should
have restored the disabled worker to gainful
employment failed to provide even adequate
medical care by the statutory limitation of the
cost and duration of such care. It should be
obvious that no true rehabilitation can possibly
be afforded if medical benefits are to be so
restricted.” 9 Such restrictions still exist in as
many as 17 States. The practice is sometimes
more enlightened than the legislation, but this
does not establish a satisfactory financial base for
medical rehabilitation.
Modern rehabilitation involves the total medical
practice as it affects the injured. It begins with
the attending physician—and even with the
medical school. In order for the physician to
carry out his responsibility as defined by the
American College of Surgeons, “ . . . it is essen
tial for him to recognize the total medical problem
of the patient in addition to his injury, as well as
his personal problems. The physician must
bring to bear on these problems all the skills and
disciplines that science and society can offer, and
•Rehabilitation in Workmen’s Compensation. By Dr. Alexander P.
Aitken. (In Workmen’s Compensation Problems, U. S. Department of
Labor, Bureau of Labor Standards, 1953. Bull. 167, p. 212.)
utilize all community resources which can assist
him in the accomplishment of these objectives.” 10
The community resources bearing closest on
medical rehabilitation are the community hospital
and the rehabilitation center. The President’s
Commission on the Health Needs of the Nation
has underscored the need for establishing depart
ments of physical medicine and rehabilitation in
general hospitals. The Commission concluded that
the average community hospital of 200 beds
could profitably assign perhaps 20 percent of its
beds for rehabilitation and convalescent care.
However, only 19 of 1,600 general hospitals
replying to a questionnaire by the Commission on
Chronic Illness had any bed allocation for reha
bilitation services; and very few of these actually
offered comprehensive service. The President’s
Commission found, moreover, that: “All told,
there are less than a dozen comprehensive reha
bilitation centers in existence . . . ” and that they
meet only a small fraction of the need. To make
the miracles of medical rehabilitation a reality for
most of the Nation’s disabled workmen, a great
expansion in hospital and center facilities is
obviously needed.
Provision for Vocational Rehabilitation
A few States were prompt to amend their laws
to bring vocational rehabilitation within the scope
of the compensation system. Massachusetts was
the first to establish, in 1918, “a division for the
training and instruction of persons whose capacity
to earn a living has in any way been destroyed 'or
impaired through industrial accident.” 11 The
following year California, North Dakota, and
Oregon adopted similar measures. Oregon’s com
pensation law set a high standard:
One purpose of this act is to restore the injured person
as soon as possible to a condition of self-support and
maintenance as an able-bodied workman, and final
settlement shall not be made in any case until the
commission is satisfied that such restoration is
probably as complete as can be made . . . the com
mission is authorized to expend money from the
accident fund to accomplish this purpose in each case
and the amounts so spent shall not be charged against
the compensation allowed by this act to the injured
workman . . . 12
» Ibid., p. 207.
11General Acts of 1918, chapter 231.
h Workmen’s Compensation Law of 1913, Ch. 112, sec. 23 (as amended by
Ch. 288, acts of 1919).
REHABILITATION
But rehabilitation was also developing in a
broader direction. Support was growing for the
idea that it should be made available to all of the
disabled regardless of the origin of disability.
This idea was embodied in the Federal Vocational
Rehabilitation Act of 1920 which provided for
technical and financial assistance from the Fed
eral Government for State-operated vocational re
habilitation programs serving the general popula
tion. There had been some resistance to the
inclusion of vocational rehabilitation under work
men’s compensation; within that framework, re
habilitation faced uncertain financing and restric
tive standards of eligibility. The Federal-State
program, on the other hand, was readily accepted
as the means of providing vocational rehabilita
tion for the occupationally disabled, and the drive
to bring rehabilitation under workmen’s compen
sation generally abated.
As a result, only 17 States have made any stat
utory provision whatsoever under their workmen’s
compensation laws to provide, promote, or facili
tate rehabilitation. Fifteen States facilitate re
habilitation by providing limited maintenance
allowances during its course; a few among them,
probably five, finance or help pay for rehabilitation
services as a direct part of workmen’s compensa
tion. Four States and Puerto Rico directly
operate rehabilitation facilities for injured workers
under the workmen’s compensation program.
There thus exist in America today two basic
patterns in providing rehabilitation services for
injured workers: in a few States the services are
directly provided by the workmen’s compensa
tion agency; overwhelmingly they are furnished
through cooperation with the Federal-State program.
Direct Provision of Services. The few States
which directly operate rehabilitation facilities un
der workmen’s compensation—Ohio, Oregon,
Rhode Island, and Washington—offer potentially
the most complete integration of the two programs.
There are evident benefits in centers concentrating
on traumatic disabilities; there is greater special
ization; the cases tend to be relatively recent in
origin and can be processed before despair patterns
become confirmed. The patients generally retain
employment ties that may be reactivated and have
a job orientation that is often helpful. The
rehabilitation is financed as a workmen’s compen
43
sation cost. To the injured worker it comes as an
insured right without any means test or any im
plication of public assistance. Such centers have
been performing excellent services for the injured
employees under their jurisdiction.
The success of workmen’s-compensation-operated centers, however, requires an administrative
agency with considerable authority, empowered
not only to establish the necessary facilities and
provide the services, but also with clear authority
to refer cases for rehabilitation. Such agencies
are the exception rather than the rule in present
American compensation practice. The fact that
so few States have taken this course during four
decades does not inspire much hope for a major
trend for the direct provision of rehabilitation
services under workmen’s compensation.
Cooperation With Federal-State and Voluntary Com
munity Centers
. A plan of rehabilitation geared
to State, local government, and community cen
ters offers a number of advantages. Community
centers tend to be broader in scope than centers
dealing exclusively with work injuries. They repre
sent an investment in services and facilities avail
able also to the worker’s family and to the worker
injured off the job. Community centers can make
for fuller utilization of scarce resources by avoiding
the duplication of personnel and facilities perform
ing the same functions for different population
categories. Local arrangements, moreover, can
bring rehabilitation closer to the workers’ com
munities—an important factor in inducing workers
to accept rehabilitation. Such arrangements can
provide for better integration of rehabilitation
with the sources of medical education, medical
service, placement agencies, and other community
services.
Considering its vast responsibilities and chron
ically limited budgets, the Federal-State program
has achieved remarkable results, especially since
the Barden-LaFollette Act of 1943 broadened
its scope to embrace the full range of rehabilita
tion including medical and psychiatric services.
Nevertheless, examination of the volume of re
habilitation of injured workers, the delays in
securing service, the weaknesses in the referral
system, the shortages of personnel, the inadequate
financing, and other serious shortcomings, revives
the question as to whether it was proper for
44
WORKMEN’S COMPENSATION IN THE UNITED STATES
workmen’s compensation to have transferred,
largely or entirely, the responsibility for rehabili
tation to another program without at least shar
ing in the cost and without taking definitive
responsibility for following its cases through to
complete rehabilitation. The question persists
whether the responsibility to purchase or provide
rehabilitation services must not be made an
integral part of workmen’s compensation, just as
medical care is.
The volume of rehabilitation is critically inade
quate. The Labor Department and the Office
of Vocational Rehabilitation have estimated that
at least 200,000 of the nearly 2,000,000 workers
injured each year could benefit from rehabilita
tion. By this standard of eligibility, “only 3
percent of the injured workers in the United
States are receiving the type of service needed.” 13
About 6,000 injured workers annually receive re
habilitation services under the Federal-State
program, but each year fully twice as many sus
tain serious permanent disabilities and are in
acute need of rehabilitation. Most of the rehabili
tation is received, not by those currently becom
ing disabled, but by a portion of the vast, and
growing, backlog of persons needing rehabilitation.
Authorities are unanimous in stressing the
crucial importance of promptness. Nevertheless,
the Task Force on the Handicapped has made
public the fact that, while the Rehabilitation
Center of the Liberty Mutual Insurance Co. in
Boston reported an average lag of 6.4 months
from injury to admission, under the Federal-State
program it had taken 7 years on the average for
occupationally disabled workers to find their way
to the rehabilitation agencies in 1951.14
The tendency has been to approach the matter
of referrals superficially. The problem is far too
deeply rooted to be overcome by merely urging
more prompt action or even through improvements
in the mechanics for referral. One important cause
of delay is built into some of the statutes; rehabili
tation is not authorized until the worker qualifies
by becoming entitled to an award for major perma
nent disability. Claim settlement procedures
is See Report of Rehabilitation Committee to 1950 Annual Convention of
the IAIABC. {In Workmen’s Compensation Problems, U. S. Department
of Labor, Bureau of Labor Standards, 1950. Bull. 142, p. 173.)
m See Report of the Task Force on the Handicapped to the Chairman.
Washington, Office of Defense Mobilization, Manpower Policy Commitee,
1952*(p. 31).
which require the worker to maximize his disability
in order to secure fair compensation also interfere
with rehabilitation—and this is one of the deepseated evils of present compensation practice
that may prove exceedingly difficult to overcome.
Far greater access to facilities is needed. In
jured workers usually must travel to the large
urban centers at considerable hardship and expense.
In most States, travel and maintenance expenses
are not provided under the compensation law and,
indeed, the regular cash benefits themselves are
insufficient for this purpose.
Rehabilitation is not only grossly underfinanced
but, partly as a consequence, seriously under
staffed. As Mary E. Switzer, Director of the
Office of Vocational Rehabilitation, recently
testified:
. the urgent need for more trained
personnel is not limited to the field of medicine.
The need for physical therapists, occupational
therapists, speech and hearing therapists, rehabil
itation counselors, special class teachers, social
workers, psychologists, and other specialists is
even greater.” 15
Trends and Developments
The conquest of disability is one of the most
constructive achievements of our time. Notwith
standing the many remaining lags, the merits of
rehabilitation are gaining recognition. In 1951,
the Industrial Commission of Ohio was authorized
to advance $300,000 to establish a rehabilitation
center. Puerto Rico appropriates $50,000 an
nually for the rehabilitation of injured workers.
Numerous community rehabilitation facilities are
being planned and built.
Two of the more significant attempts to extend
rehabilitation for injured workers have come from
a labor union and an insurance company. The
union is the United Mine Workers, which con
cluded that “the problems which the severely dis
abled face in making a recovery are created in great
measure by the present inadequacies of our work
men’s compensation, relief, and rehabilitation pro
grams.” 16 The union’s Welfare and Retirement
1* Hearings, Special Subcommittee, House Committee on Education and
Labor, pursuant to H. Res. 115, 1953, pp. 49-50.
i®Rehabilitation of the Severely Disabled: UMWA Welfare and Retire
ment Fund Experience. By Kenneth E. Pohlmann. (In American Journal
of Public Health and the Nation's Health, New York, April 1953, p. 451.)
BEHABILITATION
Fund set out to supplement and coordinate the re
habilitation of disabled miners in conjunction with
the Federal-State and other public and community
agencies. The signal contribution made by this
program has been to demonstrate the effectiveness
of rehabilitation and to improve screening and re
ferral procedures for its members. Other unions
are now studying the possibility of promoting re
habilitation through collective bargaining.
The insurance company is Liberty Mutual, one
of the major insurers of workmen’s compensation
liabilities. It observed the slow progress in bring
ing modern rehabilitation to injured workers. It
was concerned with the rising cost of workmen’s
compensation and saw rehabilitation as one con
structive method for controlling cost. Since 1943
it has operated a center in Boston which has pro
duced excellent results, having derived many of the
advantages of a program closely integrated in the
workmen’s compensation process. Its contribu
tion is the demonstration that rehabilitation pays.
The savings in reduced medical and compensation
costs are difficult to measure by rigorous standards,
although many specific cases can be cited in which
very substantial amounts were saved. Stanwood
L. Hanson, in evaluating the center’s work, has
stated the case with candor: “Although we still
have many failures, the successes outweigh our
failures, and our gains in human values and in
w Disabled Men Work Again. {In American Journal of Public Health
and the Nation's Health, New York, July 1952, p. 790.) See also The Rising
Cost of Workmen's Compensation Cases and New Methods of Control,
published by the Liberty Mutual Insurance Co.
45
dollars far exceed the cost of providing these serv
ices of rehabilitation.” 17
Sweeping changes are needed to modernize the
Nation’s workmen’s compensation laws. There
is probably no better place to start than with the
establishment of a definitive program of rehabili
tation for occupationally disabled workers. Re
habilitation should be as firmly established under
workmen’s compensation as the responsibility for
medical care. Whether the services should be
directly provided by the workmen’s compensation
board or purchased from community centers is
not the basic issue. The need is for the assump
tion of responsibility for comprehensive rehabili
tation and for a vast expansion in its availability.
The medical care provisions should be broadened
to cover the cost of medical restoration in full.
The administrative agency should be given clear
authority to make rehabilitation services and
income-maintenance benefits available to all who
need them. The administrative reforms which
are urgently needed in workmen’s compensation
generally—in the direction of a clinical rather than
a forensic system—can most logically and appro
priately begin with rehabilitation. Once rehabili
tation becomes a definitive part of workmen’s
compensation, further improvements will become
possible, such as the revision of the much-criticized
disability rating system. This is the most promis
ing prospect for workmen’s compensation as it
stands today.
U. S . GOVERNMENT PRINTING OFFICE: 1954
@FedFRASER