Waiting Periods and Direct Payments in Workers' Compensationances
June 1998 Waiting Periods and Direct Payments in Workers’ Compensation (Prepared for the Royal Commission on Workers’ Compensation in British Columbia) by Morley Gunderson* and Douglas Hyatt** * Professor, Department of Economics and Centre for Industrial Relations, University of Toronto. ** Associate Professor, Scarborough College, Faculty of Management, and Centre for Industrial Relations, all of the University of Toronto, Research Associate, Institute for Policy Analysis, University of Toronto, and Senior Scientist, Institute for Work and Health. 1. Introduction At the time of introduction of workers’ compensation in North America, waiting periods were a prominent design feature. This appears, fundamentally, to be due to the heavy influence of the first jurisdictions to adopt compensation programs for work injuries on the jurisdictions that followed. The North American workers’ compensation system was heavily influenced by the German system, established in 1884 under Bismarck, to which both workers and employers both contributed. In Britain, the “Friendly Societies” in the pre-1880, were initially established to compensate injured workers and their families for death or disability associated with a workplace injury, without regard to fault. Workers’ paid for the cost of the system, but over time, employers agreed, either through collective negotiations or on their own accord, to assist in financing the societies. Frequently, the quid pro quo was an agreement that workers’ would not sue the contributing employer. In the United States, a number of early attempts to legislate workers’ compensation statutes were beaten back by the U.S. Supreme Court, which found many of the provisions of the legislation offensive to common law doctrine, including the absence of waiting periods (as a form of co-insurance).
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