Should we have unified federal workers’ compensation laws in each state?

You frequently see me use the term “Georgia workers’ compensation” on this site, but it occurs to me that you may not know why I do that rather than just writing “workers’ compensation.” The reason I do so is because there is not a single set of federal workers’ comp laws here in the United States. There are differing workers’ compensation laws for federal employees, for harbor workers, for residents of the District of Columbia (as well as one for the employees of the District of Columbia), and one for each territory, possession, and state in the U.S. The federal government has never seen fit to consolidate these all into one system.

According to New York attorney Theodore Ronca, there’s currently a debate going on over replacing all these varied sets of law –specifically at the state level– with one unified federal law. He finds it important to outline why workers’ compensation laws began as state laws and have remained so.

Some proponents of federal unification cite uniform compensation rates as a positive. Roca argues that this would be an unjustly expensive side effect of unification, as some states could not sustain federal rates that aren’t commensurate with their local economies.  He cites the max federal comp rate, which is $1436 weekly (and customarily implements annual cost of living increases) and the fact that this rate wouldn’t come down with federalization.

Important to note in the federalization discussion, too, is why workers’ comp laws started as state laws and have remained that way since the early twentieth century. The simple answer is that the needs of each state were drastically different when compensation laws were implemented. For instance, states that relied primarily on industry covered factory and construction work. States that were agriculture-heavy took their workers’ professions into account as a basis for coverage. As Roca asserts, each state had to conform to its own economic realities in the big picture. While an industrial-leaning state could not afford their disability rolls to swell, an agricultural state could not afford to bankrupt its leaner, more mercurial businesses like farms and ranches with premiums.

So then, locale-based workers’ compensation laws have political and economic benefits to each state. States regulate their own insurance laws, empowering a governor with control over a large pool of financial resources with which to serve his constituents. Comp laws at a state level offer advantages for union negotiations within their local legislatures. In fact, unions have a history of actively opposing the federalization of comp laws (alongside insurance companies!), a fact which must stun and amuse pundits and advocates in turns.

Given my observation over the past few years that reforms to the workers’ compensation “system” have always resulted in fewer rights for the injured workers, and given the fact that Georgia consistently ranks as one of the lowest states in which to have workers’ compensation insurance, I agree with Roca that we would be well served to leave well enough alone.

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