An official with the U.S. Department of Labor (DOL) noted three troubling workers’ compensation trends that could affect injured or sick workers.
Christopher Godfrey, director of the DOL Office of Workers’ Compensation Programs, noted on the DOL’s blog that the number of workers covered by workers’ compensation has decreased, states are paying fewer total benefits and some states are trying to make workers’ compensation optional.
Godfrey was basing this information on information in an annual study of workers’ compensation trends conducted by the National Academy of Social Insurance (NASI). He is also a member of the academy’s study panel.
The study is based on data from 2016 to 2020.
Number of covered workers decreased
The first troubling trend Godfrey points out is that the number of U.S. workers covered by workers’ compensation benefits has decreased.
There had been several years of incremental growth in the number of workers coveted, but COVID-19 wiped all of that out in 2020 alone, Godfrey said.
In the 20-year history of the NASI report, 2020 saw the largest decrease in covered jobs in a single year. Coverage decreased in all but 12 states.
Further, workers who are misclassified as independent contractors continue to lack the security of workers’ compensation coverage.
States paying fewer total benefits
Godfrey also notes that states are paying fewer total benefits to injured workers, with a decrease in 40 states from 2016 to 2020.
COVID-19 was a big factor in this as well, but total benefits paid was already decreasing in 21 states before the pandemic.
Some other factors for this “decades-long trend” include changes to state workers’ compensation laws and policies, according to Godfrey.
Some states considering optional workers’ compensation
South Dakota, Texas and Wyoming already have either fully or partially optional workers’ compensation for some occupations, Godfrey said.
Arkansas, Oklahoma, South Carolina and Tennessee are also proposing alternatives or options allowing employers to opt out of workers’ compensation.
If these changes occur, they could have “an enormous impact on economic support and security for workers.”
DOL addressing these trends
None of these trends are new, according to Godfrey, who cites 2015 reports from ProPublica and the DOL regarding similar trends in 33 states between 2002 and 2014.
But the DOL is doing a few things to address these trends, including:
- launching the Good Jobs Initiative, which addresses “safe, healthy and accessible workplaces – and family-sustaining workers’ compensation benefits that promote economic security”
- hosting a panel discussion discussing the “desperate need to provide more adequate, prompt and equitable support for injured and ill workers,” and
- seeking new ways to collaborate with state workers’ compensation systems, federal entities invested in workers’ compensation and research organizations to identify best practices and solutions that improve outcomes for vulnerable workers.