In May, Oklahoma hit the reset button on its workers’ compensation system. The new law has a complicated mix of provisions, some of which may benefit claimants by making parts of the system simpler and more efficient. But it cuts back significantly on the availability of benefits, and it substantially increases employers’ control over claims. On balance, workers lose: claims will be much harder to prove, damages for claims of retaliation are limited, and procedures and benefits will be controlled by employers through new opt-out and arbitration provisions.
The much discussed “opt-out” provision will allow employers to provide insurance for work injuries outside the regular workers’ compensation system, while retaining their protection from law suits that employees might bring for negligently caused injuries. While opt-out is allowed in Texas, nowhere else may employers opt out, create their own systems for managing claims, and still retain their immunity from tort litigation.
The legislature clearly focused on saving money, motivated by the relatively high employer workers’ compensation costs in Oklahoma. The state Chamber of Commerce estimates employers will save a minimum of $263 million – most of which comes from benefit cuts.
These cuts include a reduction in the weekly maximum available for temporary total benefits to 70% of the state average weekly wage (from 100%), far below the level in most other states. And compensation is specifically limited for mental health conditions, cumulative trauma, soft tissue injuries, occupational diseases (including asbestosis and silicosis) and pain.
But many of the changes are less obvious and more insidious. To obtain compensation, workers now must be able to prove, using “objective” evidence, that work was more than a 50% cause of their illness or impairment, and they must establish this requirement by a preponderance of the evidence. Gone is the notion of no-fault liberality that was part of the historical basis for workers’ compensation systems. Gone is the presumption that an employer should take a worker “as he finds him.” Now, in Oklahoma, if a worker cannot meet this 51% rule, then s/he does not receive compensation – but the employer nevertheless cannot be sued, leaving the worker with no recourse for an injury.
And there’s more. Employees who have engaged in misconduct, including “dishonesty,” “wrongdoing” or “a violation of a policy or rule adopted to ensure orderly work or the safety of self or others” are not eligible for compensation. In other words, if a worker has violated an employer’s rule, s/he may not get benefits. But employers have no tort liability if they violate federal or industry safety standards: employers can only be sued for intentional torts when the employer had the specific intent to cause the injury itself. Employers that show reckless disregard for workers’ safety are fully protected under this law.
This seems like a “heads I win, tails you lose” approach to worker protection – with workers on the losing end.
The profound significance is that the core of the “bargain” with workers – no fault coverage in exchange for limited liability- has been broken. Employers are protected, while injured workers are left without recourse.
Sadly, Oklahoma does not stand alone. This legislation may go further than most, but it also mirrors what has happened in other states over the past few years. Many injured workers now find themselves shut out of the system that was supposed to provide quick though limited benefits to compensate them for work-related injuries and illnesses, irrespective of fault. Aging workers and people with preexisting conditions are particularly vulnerable to the changes.
To be clear, workers’ compensation has never been a panacea for workers. Benefit levels were grossly inadequate before the 1972 National Commission on State Workmen’s [sic] Compensation Laws threatened states with federal standards, and despite some improvement, they are often still inadequate today. Occupational diseases were never compensated with any regularity. Complex cases with multiple causes have always resulted in dueling physicians and excessive litigation. Procedures are uncertain, time consuming and confusing.
Perhaps not surprisingly, a growing body of research demonstrates that many injuries are never reported and that work-related injuries often do not result in compensation. But these recent changes escalate the problems, and the stories of injured workers around the country reflect the challenges that individuals face.
The decline of unions has left workers’ compensation without any champions in state legislatures. The cutbacks in compensation for injured workers – and the delays and complexity in the systems – have only become worse over the last 20 years. State legislatures appear to regard workers’ compensation as an irritating and unnecessary cost for businesses, rather than a critical component of our social safety net. Many analyses look at employers’ costs, and employers’ satisfaction with the system, and conclude that lower costs – resulting in higher employer satisfaction – represent positive change.
If we were to shift the lens to the experience of injured workers, we would paint a very different picture. Our challenge is both to tell this story well and to develop a compelling political agenda. I am unsure where this would take us in terms of a redesign of an increasingly inadequate system. But I am certain that it is where we need to start.
Emily Spieler is the Edwin W. Hadley Professor of Law at Northeastern University School of Law.