February 21, 1913: Legislature Passes Workers' Compensation System
On February 21, 1913, the legislature passed an act creating a workers’ compensation system.
It had been a major campaign issue for incoming Governor Henry Hatfield. In his work as a coalfields physician, Hatfield recognized the need to support injured workers financially.
The system went into effect in October 1913. In the case of a fatal accident, workers’ compensation paid the funeral expenses of the deceased and a stipend for widows and children. In the case of partial disability, workers received half their salaries.
The funds came from a premium paid by employers in exchange for a guarantee they couldn’t be sued by workers injured on the job. This stipulation changed in 1978, when the U.S. Supreme Court ruled that injured workers could still sue employers under certain conditions.
The workers’ compensation system was always a financial challenge and a source of political controversy. Some felt workers took advantage of workers’ comp, and others accused businesses of not paying their fair share. In 2005, with the system facing bankruptcy, the legislature transferred workers’ comp to a private mutual insurance company, which would become BrickStreet Mutual.