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Are Inadequate State Worker’s Comp Laws Leading To Risk Of Poverty?

Last week the US Department of Labor released a report that spelled out the path for those who have to claim workers’ compensation. Injured workers, the report states, are at a severely high risk of descending into poverty. The reason is that state workers’ comp systems are not doing what they were intended to do; i.e. help those who are injured and unable to work to maintain their standard of living. Across the board, state systems are providing inadequate benefits.

The report is aimed at providing injured workers within states who have inadequate benefits, a safety net through federal funding. The hope is that the federal government can draft legislation to address the many shortcomings of workers’ compensation laws that lead to a downward spiral for injured workers across the nation.

A 43-page report outlined the many misgivings within state workers’ comp benefits. Drafted by 10 lawmakers and Workplace injury attorneys, it urges the federal government to help better aid injured workers and protect them from the risks associated with being unable to work and out of a paycheck. Since 2003, over 30 states have revamped their laws, which has led to injured workers losing their homes, being denied prosthetic devices, and, in some instances, not getting the surgeries and aftercare that is necessary to function.

Labor Department statistics mirror exactly what other agencies such as NPR and ProPublica have found. Workers’ compensation fails to protect those who are injured and can set up obstacles to medical care, decrease the number of benefits to compensate workers, and, for some, has made the criteria to file claims, more arduous. Changes made over the past decade have made it more difficult for those who need it, to receive help and has shifted the cost of injured workers to public programs like Social Security Disability Insurance. That places a greater demand on programs that are ill-equipped to deal with the constant influx.

OSHA, which is a division of the Labor Department, came to the same conclusions last year, but the new report is more in-depth and puts workers’ compensation in the limelight. Previous reports have instead taken aim at paid family leave and minimum wage set limits.

Although speaking with harsh cries, it is likely that no legislative changes will be made anytime soon. The Obama administration has made it very apparent that the problems of workers’ compensation laws are something that will not be tackled until the next administration takes hold. Insisting they already have too many social and economic issues on the docket, the failings of workers’ compensation will have to be undertaken by the next politician to take office.


Current Labor Secretary Thomas Perez, who is leading the charge for change, was rumored to be on the short list of Vice-Presidential candidates for a Clinton Administration. If Hillary is elected, he is likely going to hold a top job in the administration, which could be a huge asset for those looking for workers’ compensation alterations.

Perez himself, in an interview last week, claims that the report is an alarm bell for the nation. When there is no safety net in place or standards regarding workers’ compensation laws, it can lead to a host of bad consequences not just for the injured workers, but for the public at large. When poverty increases, everyone suffers.

Perez is urging legislation to step up to fix a system that he believes is broken. Workers’ compensation has been around for more than a century, but has been an issue resolved at the state level. Employers are typically required to pay the medical bills, and sometimes a portion of lost wages, but the worker can not then sue their employer once the benefits have been dispersed.

What agencies such as ProPublica and NPR found in their investigation is that the benefits from one state to another can vary in extreme ranges. Neighboring states, they found, will compensate a worker anywhere from 45 thousand to 740 thousand, depending on the state law.

When the new administration takes office, they are going to have a lot of issues to sort through and public policy to tackle. Among one of the biggest disparities that needs to be addressed, are the vulnerabilities of workers in the workplace and the way they are compensated for their injuries. Without a standard of care from state to state, it is leading some to a downward spiral of poverty.