In the United States, workers’ compensation coverage began in the mid-nineteenth century, taking a very different form than it has today. Original laws permitted injured workers to sue their employers for a negligent act or omission.
In the early twentieth century, in an effort to reduce the need for litigation and eliminate the requirement that employees prove their injuries were an employer’s “fault”, states began passing no-fault workers’ compensation laws.
In 1906, the U.S. passed the first law covering federal employees. By 1949, all states had passed no-fault workers’ compensation laws.
In the United States, most employees who are injured on the job have an absolute right to medical treatment. In many cases, they also have the right to compensation for time lost from work and for temporary or permanent disability.
Employers are required to adhere to the workers compensation laws in their state and pay into the system. The greater the amount of risks of injury in their industry, the greater the premiums the employer pays.
Employer premiums may also go up following an injury to a worker, similar to auto insurance policies.
Today, workers compensation is administered on a state-by-state basis. A state governing board oversees varying public/private combination of workers compensation systems. In the vast majority of states, private insurers solely provide workers’ compensation coverage.
Other states have a hybrid system while currently four states, North Dakota, Ohio, Washington and Wyoming, have an entirely public system.
However, for example in Washington State, if a company has sufficient resources to prove they can administer their own claims, such as Boeing or Microsoft, they may be self-insured.
The federal government has its own workers compensation program for its employees. You can learn more about that here.
