Worker's Compensation Brief History

History

Before 1911, the only recourse to a worker who was injured in the course of his or her employment was to sue his or her employer in a civil or “tort” action, which was the same remedy available to a person injured under other circumstances. The tort remedy, however, had a major problem: it required the worker to prove that the injury occurred because the employer was negligent. In tort actions the employer had three almost unbeatable common law defenses: (1) that the worker was also negligent, (2) that the worker knew of the dangers involved and “assumed the risk,” or (3) that the injury occurred because of the negligence of a “fellow employee.” Under this system it was very difficult for workers to recover against their employers. If they won, however, there were no dollar limits on what a jury could award.

It is noted that after 1905 judges and juries in Wisconsin began returning verdicts more favorable to injured workers. This growing trend in tort litigation began to make employers nervous because they believed that as time went on more and more injured workers would get more and more favorable verdicts. Thus for this reason, among others, many employers became increasingly open to the idea of eliminating tort litigation by adopting some sort of worker’s compensation program.

In 1911, Wisconsin adopted a Workmen’s Compensation Act. This remedy is essentially a “no-fault” system under which a worker no longer has to prove negligence on the part of the employer, and the employer’s three common law defenses are eliminated. The intent of the law was to require an employer to promptly and accurately compensate a worker for any injury suffered on the job, regardless of the existence of any fault or whose it might be. In return, the WC Act limited the amount of money that a worker could recover. Thus, workers are only entitled to (1) certain wage loss benefits, (2) the cost of medical treatment, (3) certain disability payments and (4) payments for vocational rehabilitation retraining. Under the pre-WC Act tort system, workers had been able to recover for pain and suffering, loss of enjoyment of life and other damages that a jury might award. This is no longer possible under the WC Act.

Since 1911 the WC Act has undergone numerous changes and refinements. However, the main values have not only remained intact but have also been strengthened. One of those values is universal coverage. Nearly all employers in Wisconsin are covered, including both public and private employers. The only employee exceptions to the WC Act insurance requirement are domestic servants, some farm employees, volunteers (including volunteers of non-profit organizations that receive money or other things of value totaling not more than $10.00 per week) and religious sect members that qualify and are certified for an exemption. In addition there are a few classes of workers who are covered by federal laws instead of the WC Act.

A Note on the Worker’s Compensation Advisory Council

The Wisconsin Worker’s Compensation Advisory Council was created by Chapter 327 Laws of 1967 (effective February 18, 1968) to advise the Department and Legislature on policy matters concerning the development and administration of the worker’s compensation law. One of the important enduring values of the Council is maintaining the overall stability of the workers compensation system without regard to partisan changes in the legislative or executive branches of government.

One of the main functions of the Council is to recommend worker’s compensation law changes to the Legislature through the “agreed bill” process. The process begins with the Council holding public hearings throughout the state where testimony is taken from all interested sources. Council members agree to support the Council’s proposed changes in the Legislature and not to individually seek any changes to those proposals. Likewise, the Council members traditionally agree not to support any worker’s compensation law changes which have not gone through the “agreed bill” process. By July of odd-numbered years the “agreed bill” is usually ready for submittal to Senate and Assembly Committees. By tradition the Council only recommends statutory changes which pass without dissent. Based on this process, the Legislature traditionally accepts the Council’s recommendations and forwards the bill to the Governor for his approval where the bill is signed into law. The statutes prescribe the Council’s membership as follows: 5 employee representatives (voting members); 5 employer representatives (voting members); 3 insurer representatives (non-voting members); 1 department representative (voting member).

If you would like more information on the creation of Wisconsin’s Worker’s Compensation program see Robert Asher’s “The 1911 Wisconsin Workmen’s Compensation Law: A Study in Conservative Labor Reform” in the Wisconsin Magazine of History.

WC Special Funds

The Work Injury Supplemental Benefit Fund (WISBF):

The Work Injury Supplemental Fund (102.65, Wis. Stats.) is a state fund that pays benefits to individuals or dependents under four different benefit programs: (1) Supplemental benefits (Supplemental Benefit Fund); (2) Additional death benefit for children (Childrens Fund); (3) Preexisting disability, indemnity benefits (Second Injury Fund); (4) Payment of certain barred claims (Barred Claims Fund). The WISBF is funded through statutory assessments against insurance carriers and employers for certain specified injuries (dismemberments) and death claims. The Worker’s Compensation Division collects the assessments.

The Uninsured Employers Fund (UEF):


This fund (established by section 102.80, Wis. Stats.) pays worker’s compensation benefits on valid worker’s compensation claims filed by employees who are injured while working for illegally uninsured Wisconsin employers. When a compensable claim is filed, the UEF pays the injured employee worker’s compensation benefits as if the uninsured employer had been insured.

The UEF is funded through penalties assessed against employers for illegally operating a business without worker’s compensation insurance. The penalties are mandatory and non-negotiable. In addition, the department pursues reimbursement from each uninsured employer of benefit payments made by the UEF under section 102.81(1), Wis. Stats., to the employee of that uninsured employer or to the employee’s dependents. The UEF uses aggressive collection action (including warrants, levies, garnishment and execution against property) to secure satisfaction of penalty assessments and reimbursement of claims paid by the fund.


 Updated February 25, 2014
 Division of Worker's Compensation
 Content Contact: Administration