Beginning with Wisconsin in 1911, and ending with Mississippi in 1948, every state in the United States adopted a system of workers’ compensation providing medical and wage replacement benefits for workers who suffer job related injuries or illnesses. North Carolina adopted the NC Workers’ Compensation system in 1929. While each state has its own independent workers’ compensation system the systems are remarkably similar. Three key principles underpin workers’ compensation systems across the country.
First, workers’ compensation helps to ensure that the economic cost of workplace injuries is borne by employers and are not shifted to society at large. As the Kansas Supreme Court wrote in 1921 “the wear and tear of human beings in modern industry should be charged to the industry, just as the wear and tear of machinery has always been charged. And while such compensation is presumably charged to the industry, and consequently to the employer or owner of the industry, eventually it becomes a part of the fair money cost of the industrial product, to be paid for by the general public patronizing such products.” Cox v. Kansas City Refining Co., 108 Kan. 320, 195 Pac. 863, 19 A.L.R. 90. Workers’ compensation then is essentially a cost-shifting prevention tool which prevents industry from shifting the medical and disability costs associated with workplace injuries and illnesses to public and charitable welfare programs.
The anti cost shifting concept leads then to the principle that workers’ compensation is a no-fault system, meaning that benefits will be provided without regard to whether the employer is negligent or the employee contributes to his or her own injury. This is frequently referred to as the “statutory compromise” between business and labor. Employees receive limited but guaranteed medical and wage replacement compensation without having to prove negligence, while employers gain more stability and predictability in estimating their potential liability for workplace injuries.
Finally, workers’ compensation systems are “administrative” rather than judicial. Cases are initially administered and decided by a state agency rather than the courts. There are no jury trials in workers’ compensation cases. In North Carolina, workers’ compensation claims are administered by the North Carolina Industrial Commission. Appeals from the Industrial Commission are to the North Carolina Court of Appeals and then to the North Carolina Supreme Court.
An appreciation of these key principles of NC Workers’ Compensation will help the reader understand how the system operates.