Workers' comp system not functioning for low-wage earners, study finds

The workers' compensation system is failing low-wage earning employees, according to a recent report.

Researchers from the National Employment Law Project found that very few employees who earned slightly more than $8 an hour on average filed a workers' comp claim and received benefits for a work-related injury. In addition to workers' comp, the study found that a staggering number of low-wage workers experienced violations of federal regulations that govern overtime pay, minimum wage and employer retaliation.

For the study -- Broken Laws, Unprotected Workers -- researchers interviewed more than 4,300 low-wage employees in Los Angeles, Chicago, and New York City. Most workers in the study were employed in the service sector in industries such as restaurants, retail stores, and home health care. However, there was also a sizable segment employed in residential construction, manufacturing, warehousing and transportation.

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The report found that 12 percent of respondents experienced a serious work-related injury during the last three years of work. For these workers, researchers gathered information about the most recent work-related injury and about the employer's response to that injury in order to determine whether a violation of workers' comp law had occurred.

"We found that the workers' compensation system is very rarely used by our respondents," the study said. "Only 8 percent of the workers in our sample who experienced a serious injury during the previous three years had filed a workers' compensation claim for their most recent injury. This finding clearly indicates that the workers' compensation system is not functioning as intended for front-line workers in the low-wage labor market."

Among the highlights of the report, researchers found that:

Employees were required to work despite an injury. Approximately 43 percent of seriously injured low-wage earners reported that they were required to work despite their injury.
Employers refused to provide help. Nearly 30 percent of low-wage workers said their employer refused to help them with the injury.
Workers faced retaliation. Nearly 13 percent of respondents who were injured on the job were fired shortly after their injury while 4 percent were threatened with deportation or notification of immigration authorities. In addition, 3 percent of low-wage workers were told by their employers not to file a workers' comp claim.
Employees used other means to treat injuries. About half of low-wage workers injured on the job reported that they had to pay their bills out-of-pocket (33 percent) or use their health insurance to cover the expenses (22 percent).

Across the three cities, researchers found that 50 percent of those respondents who suffered an injury in the past three years experienced a violation of workers' comp law for their most recent injury.

"The sheer breadth of the problem suggests the country's work laws are simply not adequate for the 21st century, and that the laws we do have are not being adequately enforced," said Nik Theodore, director of the Center for Urban Economic Development at the University of Illinois Chicago and a coauthor of the report.

Read more at the WORKERSCOMP Forum^TM homepage.

September 28, 2009

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