Workmens Compensation

Commission Period.

The loth century brought increasing public concern over industrial accidents and the plight of their vic tims. In State after State official commissions were set up to investigate and recommend legislation. Eight such commissions were appointed in 191o, twelve in 1911, and seven in 1913. Alto gether there were 4o commissions between 1903 and 1919. These bodies were unanimous in their condemnation of the existing legal situation. Their investigations revealed that very few injured workers or their surviving dependents secured any compensation whatever from their employers, and then only after long delay. Moreover, a large proportion of any award of damages went to pay the lawyer's fee. Some of the commissions considered the pos sibility of strengthening existing employers' liability statutes, but concluded that this would prove an inadequate remedy, since the necessity for court action and proof of negligence by the employer would remain. With almost complete unanimity, the commissions recommended the adoption of the compensation principle and drafted bills along that line.

Period of Legislation.

New York passed the first compre hensive compensation law in 1910 and a wave of such laws fol lowed. Ten States acted in 1911 ; eleven in 1912-14. Nine States and three territories were added to the compensation area in 1915-16, and eight states in 1917-19. After that the remaining States, mostly Southern, came in slowly ; a law was passed for the Philippine islands, a Federal law for the District of Columbia, and another for the longshoremen and harbour workers who had been excluded from State legislation. In 1939 only two States, Arkansas and Mississippi, remained without workmen's compen sation laws.

Constitutionality.

Like other kinds of American labour leg islation, workmen's compensation had to run the gamut of the courts. Though eventually held constitutional, it bears the scars of that encounter in the "elective" feature which still remains in a majority of State compensation laws. It has been noted that the earliest attempts at compensation legislation in Maryland and Montana were invalidated by State courts. These laws were lim ited in scope and defective in plan. In 191o, however, the largest industrial State in the Union, New York, passed a compulsory compensation law for the industries which it designated as haz ardous. This law was promptly invalidated by the highest court of the State in the famous case of Ives v. So. Buffalo Ry. Co., 201 N.Y. 271 (1911). The statute was held to be in conflict with both the State and Federal constitutions. The court stated that it knew of "no principle on which one can be compelled to indemnify another for loss unless it is based upon contractual obligation or fault." Under the Federal Judiciary Act as it then stood, this case could not be appealed to the United States Supreme Court. New York at once amended its State constitution expressly to permit workmen's compensation legislation. But doubt as to the validity of such laws under the Federal Constitution obviously remained.

This doubt led to the use of the "election" device in two-thirds of the laws passed prior to 1917, the year in which the constitu tionality of compulsory laws was finally established. By that time the elective pattern was so generally accepted that its use con tinued in many States. Under an elective law, the employer and the worker chose whether to come under compensation. The em ployer, however, was induced to come in by provisions which abro gated some or all of his common law defences (described above) if he remained outside. Most of these laws presumed his election to come in unless he took affirmative action to the contrary. It was generally believed that the absence of compulsion would make these elective laws easier to sustain.

However, in 1917, the United States Supreme Court finally up held both compulsory and elective laws in three important de cisions (New York Central Rail. Co. v. White, 243 U.S. 188; Hawkins v. Bleakly, 243 U.S. 21o, and Mountain Timber Co. v. Washington, 243 U.S. 2 1 9 ). In the first case the court unanimously upheld New York's second compulsory law, passed in 1913 after the State constitution had been amended. The opinion emphasized

that the compensation act did not merely destroy the body of common law rules relating to industrial accidents, but replaced them with another system. The court further declared that "lia bility without fault is not a novelty in the law." In the second case the court unanimously upheld Iowa's elective law. In the third case it sustained the compulsory law of the State of Wash ington which further required all covered employers to insure in a State insurance fund. This decision was reached by a five to four vote.

Comparison of American and British Systems.—American compensation laws differ from the British Act in several impor tant respects. In the first place, they make compensation an ex clusive remedy. In every State but one, the law denies the worker a choice after the accident between compensation and his right to sue for damages. Under compulsory laws he loses his right to sue entirely, except under certain special circumstances. Under elective laws he must choose between the two remedies prior to the accident ; ordinarily he is presumed to accept compensation along with his employer. Again in contrast to the British system, employers are required under American acts to insure their com pensation risk. In virtually all jurisdictions, all employers must carry insurance except those who can satisfy certain standards of financial responsibility and qualify as "self insurers." In seven States in 1939 employers were required to insure in the exclusive State fund; in 12 jurisdictions they had a choice between a State fund and private insurance ; in the remaining States only private insurance carriers were available. Finally, unlike Great Britain, virtually every American State had by 1939 established some kind of administrative agency for the decision of disputed compensa tion claims. Appeal to the courts from these quasi-judicial bodies could be made only on questions of law, not of fact. In addition these administrative agencies were charged with the affirmative responsibility to see that injured workers received the compensa tion due them.

American compensation laws resemble the British Act in their benefit features. After a specified waiting period, compensation is paid covering medical care and a portion of wage loss measured as a percentage of average full time earnings. Various methods are used in different States in computing the benefits due in case of death or one or another type of disability.

As for scope, the definition of injuries covered is typically the same as that used in Great Britain; namely, "injuries arising out of and in the course of employment." These terms have been in terpreted in numerous court decisions. In addition to accidents, some kinds of occupational disease are included under more than half the American compensation laws. By 1939, 23 States and six other jurisdictions had amended their laws to this effect. How ever, only 14 of these acts provided complete coverage. The re mainder compensated for certain listed diseases, or were even more limited in scope. Though workmen's compensation had been generally accepted in the United States for about 20 years, it is important to note that in 1939 farm labourers, domestic servants, casual workers, and the employees of small employers were still generally excluded from the scope of compensation laws. In ad dition, interstate railway employees remained under a special em ployers' liability statute. The effect of these exclusions was to leave at least 2o% of American workers outside the compen sation system. It must be recognized that benefits are limited both in amount and duration so that they never equal the full wage loss.

F. Dodd, Administration of Workmen's Compensation, The Commonwealth Fund (1936) ; Lescohier and Brandeis, History of Labor in the United States, Vol. III Labor Legislation (5935); For subsequent changes in workmen's compensa tion laws consult Bureau of Labor Statistics, U.S. Department of Labor, Monthly Labor Review. (E. Bs.)