History of U.S. Disability

The current California workers’ compensation system is the result of a series of compromises based upon perceived religious obligations, the English common law, political compromises, insurance company lobbying, union lobbying, and other expediencies.[1]  It continues to change and evolve.  As of the writing of this article, there continues to be great uncertainty and dispute regarding the California workers’ compensation system.  The system has changed significantly in the last year.  Changes may accelerate as we enter 2005. 

Some of the earliest references to workers’ compensation issues are Biblical.  It is written in the Bible that “if any would not work, neither should he eat.[2]”  The expectation that all must work and contribute has been tempered by the realization that not all are physically able to care for themselves. 

Some primitive societies developed informal systems to care for invalids.  Archeological findings include skeletons of adults that would have been severely disabled and yet were apparently cared for by the community.[3]  As the pre-industrial world developed, disability systems of varied complexity were devised to insure that those less able are aided by the community.  As far back as 4000 years ago, Babylon would compensate for the loss of life or limb.  The code of Hammurabi[4] (1750 B.C.) provided compensation and also that punitive action would be taken against one who caused another’s injury.  The ancient Egyptians, the Greeks, the Nordic tribes each established systems of compensation for disability along with punishment for causing injury.  The Romans established a value of a “whole person” and a system for valuing partial disabilities.  The loss of a tooth would be worth 4% to 8% of the value of a “whole person.”  The Muslims in 640 A.D., during the reign of Caliph Omar provided welfare payments to those afflicted with blindness and certain other disorders.  During the Middle Ages, feudal lords were obligated to care for serfs who became ill or inured.  Craft guilds simultaneously developed disability insurance systems.  Buccaneers of the sixteenth and seventeenth centuries provided disability insurance to crew members by written agreement at the outset of each voyage.

The beginning of the Industrial Revolution in the nineteenth century in London was marked by a system to determine if one could not work or simply did not wish to do so.  An able bodied man who did not work might be imprisoned.  Simultaneously, systems for free medical care by doctors-in-training, as well as sick pay, were developed.  There were both publically funded systems and private disability insurance systems.[5]  Under the English common law, if one were injured by the negligence of another, he would be entitled to compensation.  Workers however did not have the same rights as other injured parties under the common law.  If the injured worker was found to have contributed to his injury, then he might not be able to collect compensation.  If the worker’s injury was caused by a co-worker, then the employer might not be liable.  Finally, if a job was inherently risky, and the injured worker knew of the risk, he might not be entitled to benefits.[6]  The English systems of common law, including those relating to disability claims, became the basis of most of the American disability systems.[7]

 Beginning in the 1880’s, laws to protect injured workers were enacted in several European countries.  In 1907 the Russians set up an indemnification schedule for bodily injuries based upon the concept of the “whole person.”  In the United States the first workers compensation law was the Federal Employers Liability act of 1908.   It was designed to protect railway workers.  Wisconsin became the first state to sign Workers’ Compensation into law in 1911.[8]  New Jersey followed suit in 1912.[9]  By 1949, all states had enacted “no fault” workers compensation systems of one form or another.  In a “no fault” system, the worker gets certain guaranteed benefits but cannot sue the employer for negligence.

California established its workers’ compensation in 1913.  At the time, Russia and California were active trading partners.  The Russians had a number of business concerns in Northern California and were respected by local businessmen.  The California workers’ compensation system was therefore loosely based upon the Russian system.

Until the most recent reforms of April of 2004, compensation for an injury was based upon a “no fault” system where workers were entitled to medical care, retraining for a new job and compensation loosely related to one’s diminished ability to compete in “the open labor market.”  Legislative changes enacted in April, limit medical benefits and retraining.  They dramatically decrease the amount of money paid for most disabilities.  They make it much more difficult for most injured workers to receive benefits and require most to retain attorneys to protect their rights.  Insurance companies are now effectively allowed to assume that a worker is committing insurance fraud and then the worker must prove his or her innocence before being allowed to obtain benefits.  The use of the ACOEM Guidelines and AMA Guidelines both dramatically decreased the benefits available to anyone with an injury.

See also the section in this web site titled Workers Compensation.