Workmen's Compensation in Massachusetts.
Sullivan, John Francis
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Workmen's Compensation in Massachusetts Workmen's Compensation is a type of social insurance which provides medical care and partial wage compensation for wage earners or their dependents for economic losses caused by industrial injuries or diseases arising out of, or received during the course of employment. Massachusetts is no exception to the rule that industrial injuries are of major importance in our present day economy. Therefore, the purpose of the thesis is to explain the workings of the Massachusetts Workmen's Compensation Act. The principle began in Germany about 1883 and spread to other parts of the world. The present compensation act is a result of the evolution of the employer's liability for negligence. The history of negligence law shows that in the middle of the 19th century, employers were so burdened by the concept that they sought ways and means of lessening it effect on them. The methods they used consisted of employer's liability insurance and the common law defenses of contributory negligence, fellow servant negligence, and the assumption of risk. The common law defenses worked great hardship on injured workers. The general effects were: to lessen the number of injuries compensated, and to lower the amount of compensation. It has been estimated that about 80% of the cases were lost by the workers, while many settled outside the court for small lump sum payments. There was a definite need for a workmen's compensation law, then, one which would utilize a new concept- that work injuries are a cost of production and should be paid for in the same manner as broken machinery is paid for. The Mass. Compensation Act was passed in 1911 and became effective in July, 1912. There have been amendments to the law since its passage which continue into 1948. This thesis deals with the present law and reviews the original act only to show specific and important changes. At present the coverage is good. About 92% of those who could be covered are actually under the act. Those excluded, who could conceivably be incorporated into the law, are farm laborers, domestics and casuals. Farm laborers account for only 1.2% of the total eligibles- so we can say that the coverage is good. Inaddition to the coverage- about 98% of the covered are also insured. The benefits of the law have been changed from time to time. In general the benefit scale states that workers may be compensated at 3/4 of the average weekly wage, but not more than $25 a week. Provisions are also made for children and widows. Maximum dollar limits are sometimes set on total payments and at other times the limit refers to a given number of weeks of payment. For medical care, benefits are unlimited in time or amount. My criticism of the benefit system is that there should not be a maximum weekly dollar limit on payments. Rather, the payments should be allowed to remain at 3/4 of the weekly salary. Under the present system the worker suffers financially both in prosperity and in depression. Chapter III, describing the practices and procedures under the compensation law, makes it obvious that the rights of both the employer and the employee are fully considered. Neither has lost his legal right of appeal through the courts. The Industrial Accident Board has taken over all the functions previously preformed by the common law courts and it is only in a few instances that compensation cases are appealed beyond the board. This last statement is an indication of the fairness and effectiveness of the board and the ability of its officers. From time to time the question has arisen concerning a state operated fund to provide the insurance for the compensation act. In the last analysis the problem resolves itself into the question of whether or not the state fund should be exclusive, i.e. operated to the exclusion of private insurance carriers. The proponents favoring an exclusive state fund argue on the grounds of economy. An investigation of the costs of compensation insurance by stock companies, competitive state funds, and an exclusive state fund, revealed that the exclusive state funds cost only 1.6% of the premium while the competitive funds ranged from 6.2% to 9%, and the cost to commercial stock companies ranged from 35-40%. In addition to other arguments the proponents claim that no one should be allowed profits and commissions on the necessity of the employer and the suffering of the worker. The opponents oppose the state funds on numerous grounds. One statement claims that it is only one step closer to communism. Other arguments are that benefits are left to the discretion of a few political officials; it is not sound public policy to leave the same officials who determine benefits to tax the employer; state-managed insurance breaks the relationship between employer and employee; and finally the only cost which is not common to the state fund is the commission and acquisition costs, but these are upheld by the services rendered by the agents and the writing of the business. In conclusion, only one system seems desirable and that is the exclusive state fund. The merit rating is a system used by insurance carriers whereby employers with more modern plants are allowed a lower insurance rate. This system gives the incentive to employers to reduce the number of industrial injuries in order to obtain lower costs of the premiums. The conclusions reached in the thesis have been: 1) the old theory of common law defenses is inapplicable to modern conditions of employment; 2) there was a definite need in Mass. for a workmen's compensation act; 3) the coverage of the act is good, but the benefits need revision such that the compensation paid will always be equal to 3/4 of the average weekly pay; 4) the meriti rating is a highly desirable system of computing insurance premiums under the act, for it gives an incentive to reduce accidents through safety work; 5) the state should operate an exclusive state fund; 6) the practices and procedures under the act are such that all the legal rights of appeal are maintained unimpaired for both the employer and the employee.
Thesis (M.A.)--Boston University
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