[4] The Workers' Accident Insurance system put into place by Otto von Bismarck in Germany in 1884 is often cited as a model for the rest of Europe and later the United States.
The law made an "unholy trinity" of tort defenses available to employers, including contributory negligence, assumption of risk, and the fellow servant rule.
[7] As result of this trio of legal doctrines, employees injured in accidents or the families of workers killed at work often lost lawsuits over workplace injuries.
[16] In still other states, employers had the choice whether to fall under compensation laws, but if they chose not to they ran greater risks of employee injury lawsuits.
[17] In some states, employers argued in court that compulsory participation laws were unconstitutional and violated the 14th amendment, which required due process before a person or entity could be deprived of property.
[21] One unfortunate side effect of compensation laws in their early days was to create incentives for employers to fire or refuse to hire employees with disabilities or health conditions that made them more expensive to injure, such as a person with only one eye.
[22] In the United States, most employees who are injured on the job receive medical care responsive to the workplace injury, and, in some cases, payment to compensate for resulting disabilities.
In almost all States, having employees without either being authorized to self-insure or carrying workers' compensation insurance is a serious crime, punishable by fines and imprisonment.
Factors that might explain this outcome include this patient population having strenuous upper extremity physical demands, and a possible financial gain from reporting significant post-operative disability.
[42] In all states except Georgia and Mississippi, it is illegal for an employer to terminate or refuse to hire an employee for having reported a workplace injury or filed a workers' compensation claim.
[citation needed] It is also suggested that laws should be made to prohibit inclusion of claims history in databases or to make it anonymous.
[47][48] In most states, workers compensation claims are handled by administrative law judges or magistrates, who often act as triers of fact.
[52] Laws in many states limit a claimant's legal expenses to a certain fraction of an award; such "contingency fees" are payable only if the recovery is successful.
In the vast majority of states, original jurisdiction over workers' compensation disputes has been transferred by statute from the trial courts to special administrative agencies.
However, such appeals are difficult and are regarded skeptically by most state appellate courts, because the point of workers' compensation was to reduce litigation.
[58] If successful, the employee can recover their full common law damages, which are more generous than workers' compensation benefits.
[citation needed] Only four states rely on entirely state-run programs for workers' compensation: North Dakota, Ohio, Washington, and Wyoming.
[citation needed] The federal government pays its workers' compensation obligations for its own employees through regular appropriations.
[citation needed] Employees of common carriers by rail have a statutory remedy under the Federal Employers' Liability Act (FELA), 45 U.S.C.
The FELA remedy is based on tort principles of ordinary negligence and differs significantly from most state workers' compensation benefit schedules.
Workers' compensation fraud can be committed by doctors, lawyers, employers, insurance company employees and claimants, and may occur in both the private and public sectors.
"[65] According to the Coalition Against Insurance Fraud, tens of billions of dollars in false claims and unpaid premiums are stolen in the U.S. alone every year.