Tuesday, December 15, 2020
Legal Responses to COVID-19 Around the World surveys the labor-related responses of 50 countries to the COVID-19 pandemic. The book currently is available only on kindle, but will be available in hard copy within a week or so. Beyond the book's content, the table of contents provides a really nice list of labor scholars throughout the world.
Here's the complete cite: Legal Responses to Covid-19 Around the World, Cláudio Jannotti da Rocha, Flávia Fragale Martins Pepino, & Rafael Lara Martins, eds. (Lex-Magister [Brazil], 2020) . Disclosure: I contributed the U.S. chapter.
Here's the publisher's description:
This is a collection of papers from 50 countries (6 continents) about the effects of the Covid-19 pandemic on the economy, employment, contracts, business, people’s income, health, courts and dispute resolution systems. The book’s purpose is to allow current and future generations to find, in one place, information about the legal responses to Covid-19 around the world.
December 15, 2020 in Books, International & Comparative L.E.L., International Contacts, Labor and Employment News, Labor Law, Scholarship, Wage & Hour, Workplace Safety, Workplace Trends | Permalink | Comments (0)
Tuesday, November 17, 2020
Rachel Arnow-Richman (Florida) has just posted on SSRN a pair of timely articles related to the pandemic: Temporary Termination: A Layoff Law Blueprint for the COVID Era (forthcoming ABA JLEL) , and Is There An Individual Right to Remote Work? A Private Law Analysis (forthcoming Wash. U. J. L. & Pub. Policy). Here are the abstracts:
Remote Work: One of the gnawing legal questions of the COVID-19 pandemic is the status of remote work. Since the expiration of the first round of government shut-down orders in the summer of 2020, companies have been calling workers back to the job, prompting serious concerns about the risk of workplace transmission. As a consequence, many workers have asked to continue the remote arrangements their employers adopted when forced to close under executive orders. Some employers are acceding to these requests; others are not. This brief essay, prepared for the ABA Journal on Labor & Employment Law, considers this problem from a private law perspective. It concludes that public law offers little protection to individual employees other than those with qualifying disabilities. Companies, however, may be in breach of contract if they terminate employees who have enforceable job security rights for refusing to return to in- person work. Rather than rely on guesswork, the prudent and compassionate choice for employers is to continue temporary remote arrangements to the extent feasible.
Temporary Termination: This paper, prepared for a forthcoming Washington University of Saint Louis symposium on COVID-19, responds to the pandemic-induced unemployment crisis with a strategy for addressing temporary, economic-based terminations. Workplace regulation has long neglected workers separated for economic reasons, leaving the problem to the social welfare system, which is now overwhelmed by record numbers of unemployment applicants. In prior articles, I have drawn on comparative law models to argue for laws requiring employers to provide mandatory advance notice of termination or commensurate severance pay to laid off workers. Building on that work, and drawing specifically on Canadian law, this paper argues for recognizing “temporary separation” as a distinct legal status that confers individual rights to affected employees within the context of a comprehensive law of layoffs. Under this system, all employees terminated for economic reasons would be entitled to advance notice or its equivalent in severance pay. However, employers could suspend such obligations by classifying workers as temporarily separated. Affected individuals would retain their status as employees, obtain fast-track access to unemployment benefits, and enjoy a right to reinstatement when their jobs resume. Should the employer choose not to recall a temporarily separated worker, or if the lack of work becomes permanent, the employer would be required to fulfill its deferred severance obligation.
Thursday, October 1, 2020
Sara Slinn (York - Osgoode) has posted on SSRN her timely and well-written article Protected Concerted Activity and Non-Unionized Employee Strikes: Worker Rights in Canada in the Time of COVID-19, 57 Osgoode Hall L.J. ___. Here's the abstract:
During the pandemic employees in the US have engaged in a wave of strikes, protests and other collective action over concerns about unsafe working conditions, and many of these involved non-unionized workers in the private sector. Similar employee protests were notably absent in Canada. This article examines the differences in labour legislation between the US and Canada which may help to explain these diverging experiences, primarily: the National Labor Relations Act (NLRA) section 7 protection for concerted activity, and the NLRA section 502 ability for a good faith strike due to abnormally dangerous conditions for work. This article outlines and compares the situation of, and consequences for, three categories of workers engaging in a strike over fears of workplace safety: unionized employees, non-unionized employees, and non-employees, such as independent contractors under the NLRA compared to under the Ontario Labour Relations Act (OLRA), as generally representative of Canadian labour legislation. In the final section, this article considers how a statutory provision similar to the NLRA protected concerted activity provision might be incorporated into Canadian labour legislation such as the OLRA. It also considers some more fundamental questions that such changes might prompt policymakers to reconsider, including: the focus of our statutory system on “organizing” collective action to the exclusion of “mobilizing” collective action, and questions about the potential role of minority unionism in our labour legislation system.
Wednesday, July 29, 2020
Michael Duff, Thomas McGarity, Sidney Shapiro, Rena Steinzor and Katie Tracy have published a piece through the Center for Progressive Reform on the need to provide a private right of action under OSHA. An excerpt from the executive summary:
Over the last several decades, through a concentration of economic and political power by corporate executives and their allies in government institutions, workers have been systematically disempowered and silenced. Two important results of this dynamic are that the nation's workplaces are not nearly as safe or healthy as they need to be to protect all workers, and workers lack the power they deserve to speak up against exploitation without fear of significant retaliation.
The handling of the coronavirus pandemic is emblematic of several decades of choices by our national and state leaders that prioritize short-term profits ahead of people. At this very moment and in plain view, President Trump and his Occupational Safety and Health Administration (OSHA), conservatives in Congress, and many state leaders are failing to protect workers from the potentially fatal risks of COVID-19. Significantly, this increased burden is not equally shared by all. Black, Latinx, and other people of color are disproportionately represented in many occupations that make up the low-paid, high-risk jobs, such as health services, child care, public transit, grocery clerks, janitorial services, and meatpacking, which are deemed essential during the pandemic. . . .
Agencies like OSHA should play a key role in setting policies that ensure health, safety, stability, and power for workers in addressing workplace hazards. But since 1970, Congress and the White House have hollowed out the agency, denying it resources and trimming its authority, leaving it in a weak state. The failure has been bipartisan. Republicans have been overtly hostile to OSHA, and Democrats have often lacked the political will to pursue progressive standard-setting and enforcement policies. . . .
Fixing the current system requires an updated and vastly improved labor law that empowers workers to speak up about health and safety hazards, rather than risk their lives out of fear of losing employment and pay. It also requires that workers be empowered to fight back when government agencies fail to enforce safety and health requirements. Our vision is to guarantee all workers a private right of action to enforce violations of the OSH Act, coupled with incentives for speaking up and strong whistleblower protections to ensure workers can and will utilize their new authority. In addition, this private right of action should cover the millions of workers who are currently unprotected by OSHA, including misclassified independent contractors, agricultural workers, and public sector workers in states under federal OSHA’s jurisdiction. Congress should also ban mandatory arbitration as a condition of employment, since the purpose of such arbitration requirements is to disempower workers by denying access to the courts. Finally, Congress should require that all states and territories that operate their own occupational safety and health programs in lieu of federal OSHA incorporate a private right of action into their state plans. . . .
Check it out!
Monday, May 25, 2020
Desiree LeClercq (formerly Director for Labor Affairs at the Office of the United States Trade Representative; currently en route to Ithaca NY to teach at the Cornell ILR School) writes to tell us:
LERA has been hosting a series of webinars free to members and non-members that examine various labor elements of the COVID pandemic. This Thursday, May 28, from 10-11am, I will be moderating a panel on ""Global Governance During Pandemic: Implications of Force Majeure and National Emergency for Worker Rights Protections." Panelists will include representatives from the ILO, the World Bank, the World Maritime University, Solidarity Center, and Sustainable Enterprises. In case of interest, the link to register and receive the Zoom link may be accessed at: https://lera.memberclicks.net/lera-webinar-series--ler-during-covid-19.
This looks like a terrific program!
Wednesday, April 15, 2020
The Italian Labour Law E-Journal has published a special issue describing the global labor responses to covid-19. Here's a description:
This special issue of the Italian Labour Law e-Journal intends to provide a systematic and informative overview on the measures set out by lawmakers and/or social partners in a number of countries of the world to address the impact on the Covid-19 emergency on working conditions and business operations. The aim is to understand which labour law norms and institutions and which workplace arrangements are being deployed in the different legal systems to tackle the global health crisis. Another aim is to find whether and to what extent the established body of laws is proving able to cope with the problems raised by the current extraordinary situation or whether, on the contrary, new special regulations are being introduced. The national reports may be subject to updating in case of major changes.
Thursday, April 4, 2019
Monday, February 25, 2019
The Occupational Safety and Health Administration (OSHA) administers the Occupational Safety and Health Act (OSH Act). OSHA specific workplace and health standards do expressly preempt the entire field of workplace safety and health law, but where such standards do not exist or states developed their own OSHA plans, nor does it merely set a floor either. A type of “hybrid federalism” has been established. Here, by “modified” or “hybrid” federalism, this article refers to a strong federal-based field preemption approach to labor and employment law issues, but tied to a conflict preemption approach. Applying this hybrid preemption approach to the employee right to disconnect problem provides the best opportunity to address the growing epidemic of overwork through electronic communications in the United States.
This hybrid approach has two essential characteristics under OSHA. First, as a default standard, a federal general duty clause that requires all covered employers to maintain a workplace free of hazards that may cause serious injury or death and cannot be feasibly abated. Second, OSHA also has promulgated specific workplace safety and health standard over the last five decades that set more detailed and specific requirements for numerous health or safety dangers in the workplace. The specific standards occupy the field and all contrary state or local safety and health regulations are preempted. Yet, employers can still seek a permanent variance from any OSHA standard if they can establish that they have another method to achieve the same goal as the permanent standard. Second, the OSHAct also permits states to develop their own plans and submit them for approval to OSHA. Twenty-seven states have taken advantage of this option to one degree or another and have plans approved by OSHA. While these state-approved plans must be “at least as effective” as the federal OSHAct, some states, like California and Virginia, have been more aggressive in regulation and have regulated areas that the federal OSHAct has not. This Article maintains that a combination of general duty clause federal enforcement and individual state enforcement is the most effective way of providing a broad-based right to disconnect standard until a federal permanent standard can be promulgated.
In a forthcoming book chapter, Charlotte Garden argues similarly that NLRA preemption should be reformed to let state and local governments enact more worker-friendly labor laws.
Friday, February 15, 2019
I normally try to avoid too much self-promotion on the blog, but I wanted to post a new draft article of mine. Hopefully the topic is of interest, but I post it mainly because I'd love comments and thoughts, which you can send me directly (I'm going through the journal submission process now, but still need to work on some things, especially citations). The article is called Future Work and is available on SSRN. The abstract:
The Industrial Revolution. The Digital Age. These revolutions radically altered the workplace and society. We may be on the cusp of a new era—one that will rival or even surpass these historic disruptions. Technology such as artificial intelligence, robotics, virtual reality, and cutting-edge monitoring devices are developing at a rapid pace. These technologies have already begun to infiltrate the workplace and will continue to do so at ever increasing speed and breadth.
This Article addresses the impact of these emerging technologies on the workplace of the present and the future. Drawing upon interviews with leading technologists, the Article explains the basics of these technologies, describes their current applications in the workplace, and predicts how they are likely to develop in the future. It then examines the legal and policy issues implicated by the adoption of technology in the workplace—most notably job losses, employee classification, privacy intrusions, discrimination, safety and health, and impacts on disabled workers. These changes will surely strain a workplace regulatory system that is ill-equipped to handle them. What is unclear is whether the strain will be so great that the system breaks, resulting in a new paradigm of work.
Whether or not we are on the brink of a workplace revolution or a more modest evolution, emerging technology will exacerbate the inadequacies of our current workplace laws. This Article discusses possible legislative and judicial reforms designed to ameliorate these problems and stave off the possibility of a collapse that would leave a critical mass of workers without any meaningful protection, power, or voice. The most far-reaching of these options is a proposed “Law of Work” that would address the wide-ranging and interrelated issues posed by these new technologies via a centralized regulatory scheme. This proposal, as well as other more narrowly focused reforms, highlight the major impacts of technology on our workplace laws, underscore both the current and future shortcomings of those laws, and serve as a foundation for further research and discussion on the future of work.
February 15, 2019 in Employment Discrimination, Labor and Employment News, Pension and Benefits, Public Employment Law, Scholarship, Wage & Hour, Worklife Issues, Workplace Safety, Workplace Trends | Permalink | Comments (0)
Wednesday, August 15, 2018
The NY Times has a story on Muriel Pénicaud, the French labor minister who has been leading the charge of reforming France's labor regulations. Macron, the French President, has been trying to get reforms through for a while but has been largely stymied by protests (you've got to hand it to the French, their capacity to protest may exceed even their cooking talent). As a result, Pénicaud has been embarking on a long series of negotiations with unions and businesses. Stay tuned for what the final results may be.
Also--shameless plug warning--if you want to compare France's legal and social welfare protections for dismissed workers, check out this article that I co-authored with Sam Estreicher, Comparative Wrongful Dismissal Law: Reassessing American Exceptionalism, 92 North Carolina Law Review 343 (2014). We compared not only the laws as written, but also how they operate (e.g., average win rates, average/maximum/minimum awards) for twelve countries, including the U.S.
Tuesday, March 20, 2018
On March 5, 2018, the U.S. Department of Labor announced that settlements totaling $13.9 million and covering over 2,400 workers with four Chinese contractors building the Imperial Pacific casino in Saipan. Many of these workers paid $6,000 or more to labor brokers in China, incurring significant debts with high interest rates, based on false promises of high-paying jobs in the United States. Instead, upon arriving in Saipan, the workers were stripped of their passports, forced to work long hours under dangerous conditions, and paid below minimum wage. OSHA also imposed significant fines against these contractors and the Department of Justice prosecuted several managers of these companies. News of the settlement was published by numerous media outlets, such as the Associated Press, New York Times, Washington Post, and South China Morning Post, and included a quote from Aaron Halegua, a lawyer and NYU research fellow who assisted the workers in this process and has written about the situation in Saipan elsewhere. Aaron discussed the importance of the settlement and necessary measures to prevent similar abuses from happening again. Specifically, he recommended that the casino, at a minimum, require contractors to purchase surety bonds, train workers about their rights, and hire a third-party monitor to oversee safety and labor conditions. One of the challenges will be distributing the settlement monies as almost all of the workers are now back in China.
Tuesday, February 20, 2018
Thanks to Aaron Halegua for passing along this feature story from last week's Bloomberg BusinessWeek about a Chinese casino in Saipan. It gives a very compelling account of the labor and safety issues concerning the Chinese construction workers there. And, these issues became the subject of many questions during a Senate hearing earlier this month about a bill concerning the future of a CNMI-specific guest worker program. For those who want further information about the labor situation in Saipan and the response by the federal authorities, see Aaron's short piece in ChinaFile.
Thursday, February 15, 2018
U.S. workers are increasingly finding it difficult to escape from work. Through their smartphones, email, and social media, work tethers them to their workstations well after the work day has ended. Whether at home or in transit, employers are asking or requiring employees to complete assignments, tasks, and projects outside of working hours. This practice has a profound detrimental impact on employee privacy and autonomy, safety and health, productivity and compensation, and rest and leisure. France and Germany have responded to this emerging workplace issue by taking different legal approaches to providing their employees a right to disconnect from the workplace. Although both the French legislative and German corporate self-regulation models have their advantages, this paper puts forth a hybrid approach using existing U.S. safety and health law under OSHA to respond to this employee disconnection problem. Initially under the general duty of clause of OSHA, and then under OSHA permanent standards and variances, this article provides a uniquely American approach to establishing an employee right to disconnect from work.
Wednesday, November 15, 2017
Deborah Widiss (Indiana) has just posted a new book chapter on SSRN: Addressing the Workplace Effects of Intimate Partner Violence, in Violence and Abuse in the Workplace (Cary Cooper & Ronald Burke eds., forthcoming 2018).
Here's the abstract:
Although most physical violence against intimate partners occurs in the home, intimate partner violence (IPV) also affects workplaces. It often causes absences, productivity losses, and employee turnover; less commonly, perpetrators physically attack their intimate partners at work. This book chapter discusses best practices for decreasing workplace disruptions and the risk of workplace violence caused by IPV, and it explains legal standards that may apply. The primary focus is the United States, but research and legislation from other countries is also included. It also identifies websites that provide research, model policies, and other tools for organizations seeking to address IPV, including resources regarding employment of perpetrators of IPV.
This topic feels especially salient given the role of family violence in recent high profile shootings. This chapter looks like a helpful resource, and I'm looking forward to the book's release.
Tuesday, October 24, 2017
What do unions do for regulation? That's the subject of Alison Morantz's recent and timely review of the research literature: "What Unions Do for Regulation," Annual Review of Law and Social Science 13 (2017): 515-534. Here's the abstract:
The question of how organized labor affects the content, enforcement, and outcomes of regulation is especially timely in an era in which protective laws and regulations are being scaled back or minimally enforced and union membership is in decline. This article surveys literature from a wide array of regulatory domains—antidiscrimination, environmental protection, product quality, corporate governance, law enforcement, tax compliance, minimum wage and overtime protection, and occupational safety and health—in an effort to identify common findings on what unions do for regulation. Literature on the topic has taken up five questions: how labor unions affect the passage of protective laws and regulations; how they affect the outcomes that regulators target; how they affect the intensity of regulatory enforcement; the specific activities and channels of influence they use to influence regulated outcomes; and the role they play in self-regulation. Drawing on empirical literature from the domains listed, I review and analyze literature on each of these questions and offer several conclusions and suggestions for future research.
Morantz's main conclusion: There's a lot of support in the research literature for thinking that, "in most contexts, unions' tendency to strengthen workers' collective voice and mitigate market imperfections predominates their tendency to exert monopoly power and engage in economic rent-seeking." The best evidence of this comes from studies of how unionization strongly correlates with lower rates of serious and fatal workplace injuries. Some prior research also shows that unions tend to lower overall wage dispersion, which may indirectly reduce pay discrimination against women and racial minorities.
Tuesday, September 5, 2017
Tequila Brooks has just posted an essay over at Intlawgrrls on Making the human rights case for including compensation for workplace injuries in free trade agreements. Here's an excerpt:
For many undocumented workers in the U.S., suffering a workplace injury can lead to detention, deportation and worse, as reported by Michael Grabell and Howard Berkes in their August 16, 2017 Pro Publica article, They Got Hurt at Work. Then They Got Deported. Although public policy and extensive case law in the U.S. guarantee workers’ compensation coverage for undocumented immigrants, insurers have found a way to avoid paying claims by reporting injured workers to federal immigration authorities.
Currently, the U.S. NAFTA re-negotiation goals do not mention incorporation of workers’ compensation or protection of migrant workers – but they should. Labor provisions in FTAs contain mechanisms that can enhance member states’ ability to protect human rights. While imperfect, the NAALC and labor provisions in other FTAs provide a forum for public petitions and inter-governmental dialogue on important cross-border labor issues. They have the as yet under-utilized potential to address the kinds of failures in justice administration immigrants encounter. NAFTA re-negotiators should remember that there is nothing more fundamental to a worker and our shared global economy than the integrity of her body and mind – and act accordingly to ensure that workers’ compensation is included among the labor rights protected in any re-negotiated agreement.
Thursday, May 11, 2017
Readers may be interested in a new report from the Center for Progressive Reform: Preventing Death and Injury on the Job: The Criminal Justice Alternative in State Law. An excerpt from the summary:
Workers and advocacy groups are turning to the states as possible avenues for successful reform, urging local prosecutors to pursue crimes involving worker fatalities and serious injuries under their states’ general criminal laws, as the Massachusetts prosecutor did in the case against Edmund Godin for involuntary manslaughter more than 30 years ago. To date, only a few prosecutors in a handful of states (e.g., California, Illinois, Massachusetts, Michigan, and New York) have actively pursued such cases, but those prosecutors have been remarkably successful. Such advocacy efforts suggest that criminal prosecutions are increasingly important for punishing and deterring employer neglect and malfeasance.
In 2014, Center for Progressive Reform Member Scholars and policy analysts published Winning Safer Workplaces: A Manual for State and Local Policy Reform, which discussed this reform effort, along with a series of workers’ rights campaigns beginning to take hold at the state and local level. Following up on the 2014 manual, this new manual offers more detailed assistance to advocates who want to enhance criminal prosecutions for crimes against workers.
Friday, August 26, 2016
The Center for Applied Feminism (Baltimore) has a call for papers that will be of interest to some of our readers:
CALL FOR PAPERS
APPLIED FEMINISM AND INTERSECTIONALITY:
EXAMINING LAW THROUGH THE LENS OF MULTIPLE IDENTITIES
The Center on Applied Feminism at the University of Baltimore School of Law seeks paper proposals for the Tenth Anniversary of the Feminist Legal Theory Conference. We hope you will join us for this exciting celebration on March 30-31, 2017.
This year, the conference will explore how intersecting identities inform -- or should inform -- feminist legal theory and justice-oriented legal practice, legal systems, legal policy, and legal activism. Beginning in 1989, Kimberlé Crenshaw identified the need for law to recognize persons as representing multiple intersecting identities, not only one identity (such as female) to the exclusion of another (such as African American). Intersectionality theory unmasks how social systems oppress people in different ways. While its origins are in exploring the intersection of race and gender, intersectionality theory now encompasses all intersecting identities including religion, ethnicity, citizenship, class, disability, and sexual orientation. Today, intersectionality theory is an important part of the Black Lives Matter and #SayHerName movements. For more information, see https://www.washingtonpost.com/news/in-theory/wp/2015/09/24/why-intersectionality-cant-wait/.
We seek submissions of papers that focus on the topic of applied feminism and intersecting identities. This conference aims to explore the following questions: What impact has intersectionality theory had on feminist legal theory? How has it changed law and social policy? How does intersectionality help us understand and challenge different forms of oppression? What is its transformative potential? What legal challenges are best suited to an intersectionality approach? How has intersectionality theory changed over time and where might it go in the future?
We welcome proposals that consider these questions from a variety of substantive disciplines and perspectives. As always, the Center’s conference will serve as a forum for scholars, practitioners and activists to share ideas about applied feminism, focusing on connections between theory and practice to effectuate social change. The conference will be open to the public and will feature a keynote speaker. Past keynote speakers have included Nobel Laureate Toni Morrison, Dr. Maya Angelou, Gloria Steinem, Senators Barbara Mikulski and Amy Klobuchar, NOW President Terry O’Neill, EEOC Commissioner Chai Feldblum, and U.S. District Judge Nancy Gertner.
To submit a paper proposal, please submit an abstract by Friday October 28, 2016 to firstname.lastname@example.org. Your abstract must contain your full contact information and professional affiliation, as well as an email, phone number, and mailing address. In the “Re” line, please state: CAF Conference 2017. Abstracts should be no longer than one page. We will notify presenters of selected papers in November. About half the presenter slots will be reserved for authors who commit to publishing in the annual symposium volume of the University of Baltimore Law Review. Thus, please indicate at the bottom of your abstract whether you are submitting (1) solely to present or (2) to present and publish in the symposium volume. Authors who are interested in publishing in the Law Review will be strongly considered for publication. For all presenters, working drafts of papers will be due no later than March 3, 2017. Presenters are responsible for their own travel costs; the conference will provide a discounted hotel rate as well as meals.
We look forward to your submissions. If you have further questions, please contact Prof. Margaret Johnson at email@example.com. For additional information about the conference, please visit law.ubalt.edu/caf.
August 26, 2016 in Conferences & Colloquia, Employment Common Law, Employment Discrimination, Labor Law, Labor/Employment History, Pension and Benefits, Public Employment Law, Religion, Scholarship, Wage & Hour, Worklife Issues, Workplace Safety | Permalink | Comments (0)
Tuesday, March 22, 2016
Alison Morantz (Stanford) has just posted on SSRN her article Rejecting the Grand Bargain: What Happens When Large Companies Opt Out of Workers’ Compensation? Here's the abstract:
The “grand bargain” of workers’ compensation, whereby workers relinquished the right to sue their employers in exchange for no-fault occupational injury insurance, was one of the great tort reforms of the Twentieth Century. However, there is one U.S. state that has always permitted employers to decline workers’ compensation coverage, and in which many firms (“nonsubscribers”) have chosen to do so: Texas. This study examines the impact of Texas nonsubscription on fifteen large, multistate nonsubscribers that provided their Texas employees with customized occupational injury insurance benefits (“private plans”) in lieu of workers’ compensation coverage between 1998 and 2010. As economic theory would lead one to expect, nonsubscription generated considerable cost savings. My preferred estimates suggest that costs per worker hour fell by about 44 percent. These savings were driven by a drop in the frequency of more serious claims involving replacement of lost wages, and by a decline in costs per claim. Both medical and wage-replacement costs fell substantially. Although the decline in wage-replacement costs was larger in percentage terms than the drop in medical costs, the latter was equally financially consequential since medical costs comprise a larger share of total costs. The second stage, which compares the effect of nonsubscription across different types of injuries, finds that non-traumatic injury claims were more responsive to nonsubscription than traumatic ones. In part, this disparity reflects the fact that private plans categorically exclude some non-traumatic injuries from the scope of coverage. Yet even those non-traumatic injuries that were not excluded from coverage declined more than traumatic injuries, consistent with aggressive claim screening by employers and/or a decline in over-claiming and over-utilization by employees in the nonsubscription environment. The third stage examines the effect of nonsubscription on severe, traumatic injuries, which are generally the least susceptible to reporting bias and moral hazard. The sizable and significant decline in such injuries is consistent with an improvement in real safety, although it could also be explained by aggressive claim screening. The final stage of the study probes whether four ubiquitous features of private plans – non-coverage of permanent partial disabilities, categorical exclusion of many diseases and some non-traumatic injuries, capped benefits, and lack of chiropractic care – explain the observed trends. Surprisingly, these features account for little of the estimated cost savings. Although many study participants describe limited provider choice and 24-hour reporting windows as major cost drivers, data limitations preclude me from identifying their respective impacts. Overall, my findings suggest an urgent need for policymakers to examine the economic and distributional effects of converting workers’ compensation from a cornerstone of the social welfare state into an optional program that exists alongside privately-provided forms of occupational injury insurance.
Tuesday, July 14, 2015
Allison Morantz (Stanford) has just written and posted on SSRN the article I've been hoping to see ever since I practiced in Texas some 20 years ago -- Rethinking the Great Compromise: What Happens When Large Companies Opt Out of Workers' Compensation? Here's the abstract:
The “great compromise” of workers’ compensation, whereby workers relinquished the right to sue their employers in exchange for no-fault insurance coverage for occupational injuries, was one of the great tort reforms of the Twentieth Century. Because participation is usually compulsory, it is difficult to forecast what the real-world effects might be of making workers’ compensation voluntary. However, there is one U.S. state that has always permitted employers to decline workers’ compensation coverage, and in which a significant number of firms (“nonsubscribers”) have chosen to do so: Texas. This is the first empirical study to examine comprehensively the impact of Texas nonsubscription on large, multistate nonsubscribers. I analyze highly granular data from fifteen large, multistate companies that provided their Texas employees with customized occupational injury insurance plans (“voluntary plans”) in lieu of workers’ compensation coverage between 1997 and 2009. As economic theory and common sense would lead one to expect, nonsubscription generates considerable cost savings, reducing total programmatic costs by an average of about 29%. These savings were driven by a drop in the frequency of injury claims – especially more serious claims involving replacement of lost wages – combined with an decline in costs per claim. The drop in cost per claim arises from a fall in both medical and wage-replacement costs. Although the decline in wage-replacement costs is larger in percentage terms, the drop in medical costs is more financially consequential since medical costs constitute such a large share of total costs. The paper finally explores whether several common attributes of workers’ compensation regimes that voluntary plans typically forgo – compensation for permanent partial disabilities, uncapped total benefits, chiropractic coverage, unlimited choice over medical providers, and lengthy injury-reporting windows – are likely to account for the observed cost disparities. Surprisingly, the first three of these features account for little of the observed variation. Although it is much more difficult to isolate the empirical impact of provider choice and reporting windows, my analysis provides some intriguing, albeit highly tentative, evidence that state-level variation in injury-reporting windows could have a significant effect. Overall, my findings suggest the urgent need for policymakers to examine the economic and distributional effects of converting workers’ compensation from a cornerstone of the social safety net into an optional program that co-exists alongside privately-provided forms of occupational injury insurance.
This article deserves a close read. National employers doubtless noticed some time ago that their workplace-injury costs are lower in Texas than elsewhere, and Allison makes the point that these employers are now starting to push other states to reconsider the Great Compromise underlying workers' compensation law. Will this beget a "race to the bottom" as states scramble to attract employers by allowing them to opt out of workers' compensation programs, and employers respond by opting out and leaving injured workers in the cold? Or is a self-insured, nonsubscriber system a net benefit to employers and workers by incentivizing employers to invest more heavily in workplace safety and to more carefully control health care costs? Allison's article answers a lot of questions, but also opens up a broad field fertile for future research.