[su_heading]South Carolina’s Workers’ Compensation Act Turns 80 and Big Business is trying to Opt-Out.[/su_heading] The South Carolina Workers’ Compensation Commission turned 80 year old on September 1, 2015. In light of the anniversary, the time is right for a review of the significance of the workers’ compensation system. At the turn of the 20th century, the industrial revolution was in full force. The increase in machines and automation also increased on-the-job accidents. At this time, a workers only remedy was to sue his employer in civil court. Many injured workers did not have the means to take their employer to court or the time to go without a paycheck. These workers became dependent on charity to care for their families. It became apparent to state courts that a new system had to be implemented to handle the increasing and unique caseload.
In 1911, the first workers compensation laws were passed in the United States. Historically, the workers’ compensation law had six basic objectives:
1. Provide immediate and reasonable income and medical benefits to work-related accident victims regardless
of fault;
2. Provide a single remedy and reduce court delays, costs, and judicial
workloads arising out of work place personal injury litigation;
3. Relieve charities of financial demands created by uncompensated workplace accidents;
4. Minimize payment of fees to lawyers and witnesses as well as
time-consuming trials and court appeals;
5. Encourage employer interest in safety, and,
6. Promote frank study of the causes of accidents (rather than the
concealment of fault) in an effort to reduce preventable accidents and
human suffering.
Introduced during the 2015 South Carolina Legislative session, the South Carolina Employee Injury Benefit Plan Alternative, or H.B. 4197, would allow employers to opt out of the state’s workers’ compensation system and provide alternative private coverage for injured employees. The South Carolina bill, sponsored by state Rep. Bill Sandifer, Rep.Craig A. Gagnon, and Rep. David R. Hiott has not been revisited this year, but sources said eventual amendments are anticipated. This bill, ghost drafted by Association for Responsible Alternatives to Workers’ Compensation (an organization made up of large employers and insurance companies) would allow employers to opt-out of the South Carolina Workers’ Compensation Act by providing private insurance to cover injuries. These private insurance plans can make their own rules including reporting timelines and definition of injury. Further, state workers’ compensation benefits are not subject to income tax; however, benefits paid out under these proposed alternative plans would be.
What do these proposals mean for small businesses? Large multi-state companies like Wal-Mart, Lowe’s, Costco, and BMW can benefit from opt-out laws because they have the resources to administer their own workers’ compensation plans. Small local businesses, however lack capital and staff to administer their own programs, so they will continue paying into the traditional South Carolina workers’ compensation system. However, if larger employers are able to opt out, this will reduce the total premiums paid into the state system, which means costs will eventually rise for small, local businesses.
To see more on how these opt-out systems are “working” in Texas and Oklahoma check out Tags: changes in south carolina workers compensation laws, Workers’ Compensation-South Carolina