By: Ryan Knight, Associate, Miami

Should the federal government oversee state workers’ compensation systems? If so, what would that look like? Does the federal government even have the authority to regulate state administrative courts? The only time the federal government has attempted to intervene in workers’ compensation was in 1970, when Congress created the National Commission on State Workmen’s Compensation Laws. The Committee made 84 recommendations, including 19 of which the Committee considered “essential.” The Committee urged that if the states did not comply within 5 years, Congress should ensure compliance with the recommendations through federal action. The states quickly implemented most, if not all, of the 19 essential recommendations. Now the United States Department of Labor has published a report analyzing whether states are fulfilling their obligations to injured workers and whether the federal government should step in. The DOL highlighted a number of areas where workers have seen their benefits reduced throughout the years such as a reduction in the number of weeks of indemnity benefits, the reduction of second injury funds, apportionment, etc. The report even went into detail about the constitutional challenges made to the Florida’s Workers’ Compensation statute with the Westphal and Castellanos cases.

If the federal government were to oversee state workers’ compensation systems, what would that entail? Much like the federal minimum wage or your constitutional protections, the federal government would likely establish a floor or minimum set of standards with which all states would be required to comply. Just like your constitutional protections, the federal government sets the floor and allows the states to afford its citizens any additional protections they deem necessary. Similarly, federal legislation would likely mandate various provisions of workers’ compensation benefits such as a minimum numbers of weeks of wage loss benefits, a nationwide standard on what types of entities qualify for exemptions and mandatory second injury funds.

Whether the federal government has the authority to oversee workers’ compensation is a murky question. The federal government has never truly been involved in, and likely has no authority, to govern state workers’ compensation systems. That does not mean that they would not find a way to involve themselves if it was deemed necessary. The Federal Government technically has no authority to mandate a minimum drinking age, but that did not stop them from threatening to withhold valuable infrastructure funding from states if they did not comply with the federally recommended 21 year minimum. Finding a means to govern workers’ compensation could be as simple as saying that implied in every citizen’s right to “life, liberty and the pursuit of happiness,” is the inherent right to be compensated for injuries sustained while working. They have already begun to implement changes in employment practices through OSHA and the Equal Employment Opportunity Commission. It is a small and reasonably foreseeable progression for the federal government to begin influencing workers’ compensation, as well.

While federal intervention may represent an initial cost increase as carriers and servicing agents move to comply with the federal standards, it may also represent a benefit to employer/carriers as it would likely curtail the constant constitutional challenges being brought against the Florida statute in recent years. Stability in the laws would allow carriers to accurately assess rates and prevent the constant adjustments that the recent constitutional challenges have brought about.