Employment Reform in the States

States are sending a chilling message to millions of workers across the country: stand up for your rights and you could be standing in the unemployment line. Every year, hard working Americans who return to work after recovering from injuries sustained on the job are greeted with a pink slip and the exit, simply because they applied for worker’s compensation benefits. Part-time and temporary workers—known as contingent workers—are often denied unemployment insurance benefits, solely for declining full-time work for compelling family reasons. Adding to workers’ woes, many states are attempting to muzzle the voice of workers who have faced this discrimination by immunizing employers from lawsuits. In a number of states there is also an effort to make workers’ compensation claims the sole remedy for work-related injuries, even in the case of gross negligence or willful acts of the employer. These bills eliminate any tort liability recovery in even these extraordinary cases.

This year, dozens of state legislatures are introducing various measures to deal with the growing problem of employment-related discrimination. Twelve states still permit employers to fire workers for filing for workers’ compensation benefits; the remaining 38 states provide very limited legal protection for workers to claim their benefits.

Many states looking to overhaul the unemployment insurance system are introducing legislation that gives part-time and temporary workers increased access to benefits and increases the amount of money received by unemployed workers. Most include provisions allowing part-time workers to continue receiving benefits if they turn down full-time work for compelling family circumstances.

The locus of the workers’ compensation reform legislation is a provision requiring that a neutral, licensed and state-certified medical provider conduct medical exams before granting worker benefits. Doctors hired by the
employer or insurance company typically administer such exams. The proposed legislation would also give workers the right to a hearing before cutting benefits, and the ability to sue to be reinstated if they lose their job after filing a claim.

Business interest groups argue that liability claims drive up costs and stifle competition and innovation. But according to the 1997 Cost of Risk Survey by Tillinghast-Towers Perrin and the non-profit Risk & Insurance Management Society, liability insurance and workers’ compensation costs for U.S. businesses steadily declined every year between 1993 and 1996, and dropped over 12 percent in 1996.