U.S. Labor Department: Federal Oversight of State Workers’ Compensation Programs May Benefit Workers

The U.S. Labor Department, in a new report released this month, calls for an “exploration” of federal oversight and possibly federal minimum benefits for injured workers who seek a remedy through the state workers’ compensation program. Congress

The report asks, “Does the workers’ compensation system fulfill its obligation to injured workers?” In short, the agency says, workers who are hurt on the job are at serious risk of slipping into poverty.

Over the years, there have been numerous changes to workers’ compensation laws across the country. This is not a coincidence, but instead, as ProPublica reported in its excellent series, “The Demolition of Workers’ Comp.,” part of a calculated effort by large businesses to lobby state legislators for lower benefits or tougher access for injured workers. This effort has largely been successful, as evidenced by the fact that workers face more barriers to benefits than ever before. In fact, while employers are paying the lowest rate for workers’ compensation coverage, and insurance companies are turning an 18 percent profit, injured workers are turning to taxpayer-funded programs like Social Security Disability Insurance (SSDI) and Medicare to recover lost wages and medical costs they are no longer receiving through their workers’ compensation plans.

The Labor Department report further details the ways in which states across the country have enacted laws, procedures, and policies that significantly limit benefits, reduce the odds of successful applications for workers’ compensation benefits, or discourage workers hurt on the job from applying for benefits in the first place. The report was prompted by a letter in the fall of 2015 from 10 Democratic lawmakers, asking the DOL in light of the ProPublica report to step in and ensure injured workers are protected. They cited documented cases of workers losing their homes, being denied prosthetic devices recommended by doctors, or being denied necessary surgeries.

The DOL concluded that “significant change” is needed to address the many ways in which the current workers’ compensation system is inadequate. There was also a recommendation to re-establish a commission started by the Nixon administration, which had recommended a federal minimum benefit rate and the authority of the federal government to intercede when employers or states fail to comply.

Labor Secretary Thomas Perez stated that workers’ compensation is a critical social safety net, and the federal government has all but washed its hands of it. The current system, Perez said, puts workers on “a pathway to poverty.”

Before the report was released, a number of insurance companies and employers expressed dismay at the idea that there could be some type of federal oversight of the program. For example, an organization called Strategic Services on Unemployment and Workers’ Compensation said that setting a federal minimum benefit level would be “inconsistent” with the state-level control that has governed these programs for more than a century.

The idea of federal minimum benefits is that workers shouldn’t receive less compensation simply because they live in a state where lawmakers have taken an ax to workers’ compensation laws. What’s more, the federal government has a big incentive to get involved in these programs when they fall short and force workers to seek federally funded assistance.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:

Labor Report Urges Study Of A Federal Role In State Workers’ Comp Laws, Oct. 5, 2016, By Howard Verkes, NPR

More Blog Entries:

Yarborough v. Duke University – Proving a Compensable Injury, Sept. 28, 2016, Rock Hill Workers’ Compensation Lawyer Blog

Contact Information