History of Workers Compensation


According to most historians, roots of the modern workers’ compensation system should be traced back to the rise of the Industrial Revolution. The latter, as we know all too well today, caused major upheavals in pretty much all levels of the society. In short, the very fabric of the society was altered for good.

However, what is relevant to our present discussion is that workers in those factories that were sprouting everywhere were made to work in appalling and extremely hazardous conditions. Injury and fatality rates were colossal and yet, workers had little recourse to claim any compensation whatsoever. They could move the courts but the legal framework itself was so highly and unjustly in favor of the employers that workers practically stood no chance of recovering any compensation for medical expenses, lost wages or any other reparations.

The First Significant Step Towards Workers Comp

Most historians regard Otto Von Bismarck, the famous Prussian statesman and diplomat, as the father of modern workers compensation laws and system. It was through the efforts of Bismarck that Germany passed the Employers’ Liability Law in 1871. The law offered workers in certain industries, such as mines, quarries and railroads, limited social protection. This was followed in 1884 by the Workers’ Accident Insurance, often believed to be the precursor of the modern workers comp system.

In addition, Bismarck’s efforts also led to the instituting of Public Pension Insurance and Public Aid, both of which were aimed at safeguarding employees who could never return to work due to permanent disability or some serious illness.

America Wakes Up to Workers’ Afflictions

Many credit Upton Sinclair’s 1906 novel ‘The Jungle’ as being the main agent in stirring the public emotion in America towards the favor of the workers and employees. The novel’s graphic description of appalling working conditions in the slaughterhouses of Chicago gave rise to considerable public outrage and the powers that be were forced to take notice.

Subsequently, Congress passed the Employers’ Liability Acts of 1906 and 1908. In reality, though, these laws did little except altering the definition of ‘contributory negligence’ slightly toward the favor of the workers. On the other hand, the laws also made clear that it is the responsibility of respective state governments, and not that of federal government, to enact employee safeguard programs.

Before 1909, four states, namely Montana, Massachusetts, Maryland and New York, made attempts to pass workers’ comp acts. However, those attempts came to naught and subsequently it was Wisconsin that became the first state to adopt a workers compensation law in 1911. The same year, nine other states followed suit and before the decade came to a close, another 36 states had made provisions regarding workers’ compensations. And it was high time, too. Records tell us that in the year 1913 alone, more than 700,000 workers suffered serious bodily injuries through work-related accidents—and this, in addition to 25,000 deaths recorded at workplaces the same year!

Further Reforms

Later, in the 1970s, a number of civil society movements prompted further reforms to workers’ compensation laws and workers in US were never better protected than in those days. This is since we’ll witness in the early 1990s another round of reactionary reforms that reduced employee benefits and gave more powers and provisions to employers to control how the benefits were distributed to affected workers.