In 1908 the Workers’ Compensation Law was established to immediately address the financial burdens suffered by workers who sustained work-related injuries or who developed an illness due to exposure to hazardous substances during work.

Workers’ compensation took the form of an insurance program, providing sure and fast financial assistance that would cover an injured worker’s lost wages (due to missed work), cost of medical treatment, vocational rehabilitation and, in worst cases, death.

The insurance benefit is guaranteed to authentic applicants (fraudulent claims have been made in the past, with workers faking injuries), regardless of whose fault the accident was. This means that even if the accident were a result of the injured worker’s own act of negligence or carelessness, no amount, however minimal, may be deducted from the total amount of compensation that the injured worker is legally entitled to receive; however, if the injury was self-inflicted, was sustained because the worker was drunk, or was a result of actions in violation of OSHA law or company safety policy, then a worker’s application for a claim will be denied.

Workers’ compensation benefit does not depend on the employer’s or the company’s financial capability too; thus, even if the company were facing possible bankruptcy, the claimant is still assured of receiving the compensation that he/she has a right to. One important clause stipulated in this insurance program, however, is the mandatory relinquishment of the worker’s right from filing a suit against his/her employer for any further legal claims.

Before the Workers’ Compensation Insurance benefit was passed into law in 1908, injured workers, majority of whom worked in construction and industrial firms, had to sue their employers just to be compensated for the injury that they sustained. Workers often lost the cases, however, as employers usually argued that the worker, prior to applying for the job, and during his/her course of employment, was aware of the dangers associated with the work. Besides losing the cases, many workers were also never allowed to return to work due the damage that the court cases caused in the employee-employer relationship.

It is explained in the website of the law firm Scudder & Hedrick, PLLC, that “Worker’s compensation program is based on the belief that employees should be able to receive full medical treatment for their injuries. As a result, nearly all employers are required to carry worker’s compensation insurance, which is designed to protect employees from job-related illnesses and injuries so those employees can receive benefits and pay for their treatment in the event of an accident.”

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