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The Origins of the Workers’ Compensation System

On Behalf of | Jan 6, 2015 | Blog, Workers' Compensation

The origins of workers’ compensation can be traced back to Europe with Germany often being cited as the first country to implement an effective nationwide system protecting both workers and employers. The U.S. started adopting workers’ compensation laws during the early 1900s. However, these laws were fundamentally different from those today, mainly because they were written and implemented by states. This article explains why it was so challenging for employees to prove the negligence of their employer and presents the factors that contributed to the need for changes in the early origins of workers’ comp system.

Limited Employees’ Access to Workers’ Compensation

The introduction of workers’ compensation laws made it a bit easier for employees to secure benefits from their employers, which used to hide behind three legal defenses present in the system:

  • Contributory negligence
  • Fellow-servant doctrine
  • Assumption-of-risk doctrine

Under the contributory negligence defense, an employer could deny benefits to an injured worker whose own negligence led to the accident. The fellow-servant doctrine allowed employers to get away from giving benefits to injured workers if the work-related accidents had been caused by the negligence of other employees. Finally, the assumption-of-risk doctrine was used when an employee working in a hazardous environment had sustained an injury.

Where did the Changes Come From?

It was only a matter of time before an overhaul of the early system was needed. A catalyst came in 1911 following the Triangle Shirtwaist Factory fire in New York City. This tragedy, where 146 workers were killed, leads to the creation of the workers’ compensation system in New York and brought a wave of progressive insurance legislation. The Federal Government started putting pressure on the states to pass new workers’ compensation laws, and by the end of 1911 ten states had enacted new laws. By 1935 Florida passed its law, and by 1948 all of the states had some form of workers’ compensation laws enacted.

Under the new workers’ compensation system, employers give injured workers access to benefits, regardless of how the accident occurred, in return for legal protection against negligence-related lawsuits.