A Broken Compensation System Is Leaving the Most Vulnerable Workers in Pain

A Broken Compensation System Is Leaving the Most Vulnerable Workers in Pain

A Broken Compensation System Is Leaving the Most Vulnerable Workers in Pain

A new report reveals the gradual erosion of employer liability requirements that have left workers alone to shoulder the costs of workplace injury.


In the toughest industries, the cardinal rule of prevention, “safety first,” often gets papered over by an unspoken law of the workplace: the most dangerous jobs are done by those who can’t afford safety. The hidden cost of the extra risks they bear quietly—the broken bones, severed thumbs and stained lungs—place an underlying drag on the most vulnerable segments of the economy. An analysis by the Occupational Safety and Health Administration (OSHA) shows the toll society pays for employers’ and regulators’ malign neglect.

Changes in state-based workers’ compensation insurance programs have made it increasingly difficult for injured workers to receive the full benefits…to which they are entitled.… This cost-shift has forced injured workers, their families and taxpayers to subsidize the vast majority of the lost income and medical care costs generated by these conditions.

The double injustice of paying for the physical suffering imposed by your employer is no accident; it’s calculated cruelty. The Workers’ Compensation system has been gradually eroded to limit employer liability, while disenfranchised, precarious workers often have little choice but to accept an inadequate award or none at all.

Guadalupe González struggled just to force her employer to recognize her injury, after she twisted her ankle badly while working her custodial job with the multinational contractor Sodexo in 2011. Though she had been injured on a cleaning shift while traversing the campus at Lasell College in Massachusetts and eventually needed surgery, she recalls, “The manager denied it, as well as the insurance company.… The manager was just saying that I was always complaining about something, and that’s how he tried to get out of it.”

González had to “complain” for months just to recover part of her lost income, but many injured workers have no one even to complain to. The rise of “outsourced” labor—temp work, independent contracting and other contingent jobs—and the misclassification of blue-collar workers as “independent contractors” has placed countless workers in an unregulated zone, cut off from benefits and full legal recourse against managers who aren’t officially employers.

With about “three million serious occupational injuries and illnesses” recorded annually, official estimates put “the cost of fatal and non-fatal work injuries at $198 billion” in 2012. Meanwhile countless injuries go unreported, and the impacts are often hidden and chronic, resulting in long-term sickness and death not attributed directly to work (try suing a company over cancer linked to decades-old asbestos exposures). Past workplace exposures to hazardous materials lead to an estimated 50,000 deaths each year.

Workers’ Compensation generally covers just one-fifth of occupational injury costs. Workers, their families and the public pay the rest: roughly 50 percent is paid out of pocket, private insurance covers 13 percent and underfunded welfare and care programs that make up the “safety net” absorb the remainder of the burden of unsafe jobs.

To handle the cost of injury efficiently, the Workers’ Compensation system was designed to offer a “no fault” insurance system to cover medical care and lost wages outside the courts. But the program’s regulations, which vary by state, have become increasingly byzantine and exclusionary, leaving many with heavily damaged bodies and little to no recompense. About 40 percent of eligible workers never even apply for Workers’ Compensation. One study cited in the report showed that “one-third of workers with employer recorded carpal-tunnel syndrome had not received workers’ compensation.” And lest you think their injuries simply weren’t serious enough, zero benefits went to the same proportion of workers with amputations. A study of workers in New Mexico shows that even those with benefits lost some 15 percent of projected income in the ten years following an injury, or about $30,000.

Corporations have for years steadily chipped away at safety liabilities. According to ProPublica: “Since 2003, legislators in 33 states have passed workers’ comp laws that reduce benefits or make it more difficult for those with certain injuries and diseases to qualify for them. Florida has cut benefits to its most severely disabled workers by 65 percent since 1994.”

This cost-shifting trend means that employers are not only less financially responsible for safety but are also losing incentive to protect it. Developers may find it less “cost effective,” for example, to pay to provide adequate protective gear at construction sites. Because Workers’ Compensation rules assign higher premiums to employers with worse safety records, OSHA reports that employers are perversely incentivized to avoid liability by “assigning workers employed by a staffing agency to the most dangerous tasks…to avoid higher premiums.”

For workers, low pay and high risk go hand in hand: the poverty wages prevalent in unsafe jobs lead to more working hours, and “long work days lead to worker fatigue and increase the risk of both work-related and non-work-related injuries, as well as of motor vehicle crashes.” Moreover, the risk inherent in being an undocumented immigrant can lead workers to avoid reporting injuries for fear of exposure to law enforcement.

Despite improvements in risk reduction over time, OSHA notes, some industries are growing relatively more dangerous on a global scale: “the work fatality rate in the United Kingdom is about one-third the rate of the United States and the rate in construction is about one-quarter the U.S. rate. While the rates in both countries are decreasing, the difference between the rates has grown substantially since the 1990s.”

Though González managed to win compensation, it ultimately covered just 60 percent of her original income of about $10.80 an hour. And all that took months of legal wrangling, working with advocates at Massachusetts Coalition For Occupational Safety And Health. Pressured to return to work, she ended up hurting her back when she stumbled on a stairwell. Though the second injury was caused by the first, she recalls, “the insurance company was just insisting that I was just making this up and that maybe I just deliberately fell on my back.”

Now in physical therapy and struggling to support her household, González says she’s unsure when she’ll return to work, and the company has lost its contract with the campus—so she might have to start all over in any case. For workers like her, the road to recovery keeps going in circles.


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