Common Law vs Workers Compensation Legislation: A Comparative Study

Common Law

Common law, derived from English legal tradition, is a system of law that has evolved organically over centuries. It is characterized by its flexibility and adaptability to changing societal needs. Common law is largely based on judicial decisions, where judges interpret existing statutes, case law, and constitutional principles to establish precedents. These precedents guide future legal decisions, promoting consistency and predictability in the law 2.

Judges in common law courts interpret statutes and apply them to specific facts, thereby creating new laws. This approach allows for the law to change over time to reflect societal changes and advancements.

However, this also means that the law can become outdated or unfair if it does not keep pace with societal progress. For instance, in the context of employment disputes, common law may be invoked in situations such as breach of contract, misappropriation of confidential information, or discrimination. Employers and employees alike may invoke common law principles to argue their cases in court.

Workers Compensation Legislation

On the other hand, workers compensation legislation is a specialized area of law that seeks to provide financial assistance to employees who have been injured or become ill as a direct result of their employment. These laws are primarily concerned with the provision of benefits such as medical treatment, lost wages, and death benefits. Unlike common law, workers compensation legislation is not driven by court precedents but rather by state laws and regulations 3.

Workers compensation laws are generally more comprehensive and straightforward compared to common law. They define the scope of coverage, the types of injuries or illnesses that qualify for benefits, and the process for claiming these benefits.

These laws also contain provisions for penalties for failure to comply with the law, ensuring that employers take steps to protect their employees. However, the specifics of workers compensation laws can vary significantly from state to state, leading to inconsistencies in how these laws are applied.

The Intersection of Common Law and Workers Compensation Legislation

Despite their differences, common law and workers compensation legislation can intersect in complex ways.

For instance, in a situation where an employee suffers an injury at work, the employer might initially attempt to defend themselves using common law defenses such as assumption of risk or contributory negligence. However, if the employer fails to comply with the requirements of workers compensation legislation, they may face additional liabilities or penalties 2.

Moreover, the specifics of workers compensation laws can vary greatly from state to state. For example, some states require all businesses with three or more employees to carry workers' compensation insurance, while others have lower thresholds.

Some states even allow construction companies to self-insure. These variations can create confusion and inconsistency for employers, particularly those operating in multiple states.

The Evolution of Workers Compensation

The concept of workers compensation emerged around the turn of the 20th century, as many states began to bring legislation into place allowing descendants of deceased employees to bring action against the employer. However, awards were based purely on the financial loss from loss of earnings, and no awards were available for pain and suffering.

These changes were seen as an improvement yet the process of accessing the courts for compensation was proving costly and time-consuming. The solution to this problem came from a new law that was very different from the common-law approach, in that it was a no-fault law.

As long as the workers’ compensation law covered an employee's job, the employer, regardless of who had been negligent, compensated the employee. However, in exchange for the automatic compensation, the employee gave up the right to bring a suit against the employer for compensatory damages 4.

The Role of Courts in Common Law

In the realm of common law, the role of courts is pivotal. Judges interpret existing statutes, case law, and constitutional principles to establish precedents. These precedents then influence future legal decisions, promoting consistency and predictability in the law. However, this reliance on past cases can sometimes lead to outdated interpretations that may not align with modern societal norms and values 2.

For example, a precedent established in a past case may no longer be applicable or fair in today's society.

Yet, due to the principle of precedent, the court may still follow this precedent in subsequent cases. This can lead to situations where the law seems to contradict itself or fails to address contemporary issues. Therefore, it is crucial for courts to balance the need for consistency with the need to adapt to changing societal norms and values.

The Variability of Workers Compensation Legislation

The variability of workers compensation legislation across states is a testament to the flexibility of these laws. Each state has its unique set of workers compensation laws, reflecting the state's economic climate, labor market dynamics, and policy preferences.

For instance, some states have stricter workers compensation laws, requiring all businesses with three or more employees to carry workers' compensation insurance, while others have lower thresholds. Some states even allow construction companies to self-insure 3.

The Impact of Federal Laws on Workers’ Compensation

Federal laws also play a role in shaping workers compensation legislation. The U.S. Department of Labor, for example, regulates the administration of workers compensation programs and sets national standards for these programs. However, individual states retain significant autonomy in implementing their own workers compensation laws 1.

The Difference Between Employees and Independent Contractors

Another intersection of common law and workers compensation legislation lies in the classification of employees versus independent contractors. Misclassification can have significant implications for workers compensation.

For instance, if an independent contractor is mistakenly classified as an employee, the employer may be obligated to provide workers compensation benefits, which could increase costs. On the other hand, if an employee is mistakenly classified as an independent contractor, they may not be eligible for these benefits 2.

Why Deerfield Advisors for Your Workers’ Compensation Needs?

Navigating the complexities of common law and workers’ compensation legislation can be challenging. At Deerfield Advisors, we provide comprehensive services to help you understand and comply with these laws. Our team of experts will guide you through the intricacies of workers compensation laws, helping you understand what's covered, what's not, and how to navigate potential liabilities.

We understand that each business has its unique circumstances, and we're committed to providing personalized advice to help you stay compliant and protect your business. Whether you're just starting out or looking to update your existing workers’ compensation policy, Deerfield Advisors is here to assist you.

Don't wait for potential legal trouble to strike. Get proactive and contact Deerfield Advisors today to get started on your workers compensation policy. With our expert guidance, you can rest assured that you're taking the right steps to protect your business and your employees.