Report Submitted by Prof. Samuel McCune Lindsay, October 17, 1913.
COMPULSORY OR ELECTIVE SYSTEM
The act should be compulsory on both employer and employee, and should prohibit evasion of the liability by any contract, regulation or device. The substitution of any contracting-out or alternative scheme should not be allowed. (In view, however, of the probability that in some states a compulsory act would be unconstitutional and an elective act necessary, standards are given as to the method of election, etc., see infra Election.)
ADMINISTRATION OF ACT
There should be an Industrial Accident Board separate from the Labor Department, except in those states where the Labor Department is administered by a commission, as in Wisconsin.
The Board should consist of three members appointed by the Governor with the consent of the Senate, and for a term of six years. The first appointees should serve for two, four and six years respectively. One member of the Board should be an expert in casualty insurance and statistics, and no member of the Board should be allowed to hold any other public office or engage in any other work. A majority should constitute a quorum and a decision by the majority should be valid.
The Board should have power to appoint deputies to sit in arbitration cases (see infra, Procedure -- Arbitration of Disputes). All other assistants should also be appointed by the Commission. The act should make provision for offices and supplies for the Board, for a seal, for the filling of vacancies, and for the payment of traveling and other expenses, all of which (except expenses connected with the management of the State Administered Insurance Fund) should be paid by the State. The appropriation should be large enough to provide an adequate force, and the salaries of the members of the Board (which should be stated in the Act) should be large enough to secure men of ability and character.
The act should be so drafted as to grant full powers to the Board or any member or deputy to compel testimony, oral and documentary.
The Board should have power to make rules and regulations for the administration of the act. [page 2]
INSURANCE
Method Provided
(1) State administered fund, (2) mutual associations of employers, (3) private casualty companies, (4) self-insurance.
Under none of these methods should the employee make any contribution.
The employer, unless he is carrying his own insurance, should not be liable to the employee for compensation. If he is insured and has paid his premiums and assessments (see infra) he should be relieved from further liability. If the insurer is insolvent, the compensation should be paid by the State Guarantee Fund (see infra), which may collect what it can from the insurer. If the employer is not insured, or is carrying his own insurance and becomes insolvent, the employee should look for compensation to the State Guarantee Fund, which should proceed against the employer.
Compulsory Act
Insurance under the Compulsory Act should be compulsory on all employers subject to the act. Compliance with this requirement should be enforced by a penalty (to be specified in the act) for each day's delay, to be recovered by the Board and turned into the State Guarantee Fund (see infra). Every employer who does not adopt some other method of insurance with the approval of the Accident Board should be considered to have elected to join the State Administered Insurance Fund (see infra), and should become liable for the payment of premiums thereto. If, however, one of his employees is injured before the premium are paid, the compensation should not be paid from that Fund, but from the State Guarantee Fund. The act should specify a time at which the compulsory insurance features of the act should be effective, which should be after the rest of the act takes effect, and should also specify a time after which the election to join the State Administered Insurance Fund should become effective, providing also for the case where the employer does not start business until after the compulsory insurance features of the act take effect. [page 3]
Elective Act
Taking out of insurance in one of the forms provided should be required of all employers who accept the compensation provisions of the act. (For the method provided, see infra, Election).
The insurer should be obliged to reimburse a policy-holder who has been forced to pay a judgment in an action at law brought against him by an employee (as to whom he has accepted the compensation provisions of the act) who has rejected the compensation provisions of the act.
Approval of Method of Insurance
The approval of the Board of the method of insurance adopted by the employer should be given only after the latter has submitted to the Board his policy of insurance or other evidence proving to the satisfaction of the Board that he has insured his liability for compensation in the method approved by the Board and the Board has made a record of the name of the insurer, if any. The Board should be authorized to withdraw its approval at any time, and thereafter the employer should be considered as uninsured and as having elected to join the State Administered Insurance Fund.
Immediately upon the communication to the employer by the Board of its approval of the [method] of insurance adopted by him, he should post in conspicuous places about his place of business notice of the fact that he is insured and of the name of the insurer.
State Guarantee Fund
For the purpose of securing compensation to employees of uninsured employers and to employees whose employers are either insured in an insolvent insurer or become insolvent while carrying their own insurance, there should be created a State Guarantee Fund, composed (1) of the penalties collected under the act, (2) of the payments of $1000 made in fatal cases (see infra, Schedule of Compensation -- Death), (3) of the payments of compensation due to persons in prison (see infra, Schedule of Compensation), and (4) of the payments of compensation falling due during the time the injured employee refuses to submit to medical examination. [page 4]
If an employee is injured and the employer is not insured or is carrying his own insurance and becomes insolvent, the Guarantee Fund should pay the compensation and should then have an action against the employer. If the insurer is insolvent, the Guarantee Fund should pay the compensation and should then proceed against the insurer. In such actions, if the injury has resulted in death or permanent disability, the recovery should be for the amount already paid, plus a lump sum equal to the present value of all future payments of compensation, computed in the method set forth infra under Schedule of Compensation -- Commutation of [Installment] Payments. If the disability is only temporary, the recovery should be for the amount already paid, and the Guarantee Fund should have a lien for the estimated amount of all future payments. The employer or insurer should be permitted to relieve himself from the payment of the lump sum or from the lien, by giving a bond, satisfactory to the Board, for the payment of all compensation that may become due.
The Guarantee Fund should be kept separate from the State Administered Insurance Fund (see infra), but should be managed by the Accident Board.
The act should contain a provision authorizing the Board, in case the Guarantee Fund grows to be too large, to use such portion of it as they may deem wise for the prevention of accidents and of occupational diseases.
State Administered Insurance Fund
Administration
The State Administered Insurance Fund should be managed by the Accident Board, but should be kept separate from the Guarantee Fund. It should be conducted upon the reserve basis, the reserve being subject to the approval of the insurance commissioner. No assessments should be allowed.
Premiums
The employers should be classified by industries and according to the degree of risk, with differential rates in each class to allow (1) for variation from the standard of equipment, and (2) for accident experiences. The premiums should be based upon the estimated payroll, [page 5] adjusted at the end of the year. In the case of contractors, adjustment should be upon the completion of the contract. A penalty should be provided for misrepresentation of the payroll.
The premiums should be paid at such times as may be fixed by the Board. In case of default in premiums, the Board should be authorized to maintain a suit for their collection, with an added penalty (to be stated in the act.) If the policy-holder withdraws, he should be liable for all the premiums falling due before his withdrawal becomes effective. There should be a provision for the return of excess premiums at the expiration of the policy.
All rates, classifications, etc. should be approved by the insurance commissioner, who should have power to withdraw his approval.
Liability for Losses
The liability for losses should be upon the Fund as a whole. There should be no classes for the purpose of liability, but only for the fixing of premiums.
Regulations and Inspections
The Board should have power to inspect the books, payrolls, etc. of the employer and to make rules and regulations therefore, and a penalty should be provided for the violation of these regulations.
Insurance of Public Liability and of Employer's Liability
The State Administered Insurance Fund should not be given authority to insure the liability of its policy-holders to the public, but it should be allowed to insure the liability of its policy-holders to such of their employees as are not subject to the compensation act.
Re-insurance
The Board should be permitted to reinsure all risks.
Custody of Funds
All moneys of the Fund should be in the custody of the State [page 6] Treasurer, who should invest the surplus.
Payment of Expenses
All expenses connected with the management of the State Administered Insurance Fund should be paid out of the premiums collected, with an appropriation from the State for the first year.
Mutual Associations
Organization
Ten employers, having 10,000 employees to whom they are liable to pay compensation, should be allowed to form mutual associations and the act should contain suitable provisions for the incorporation of such associations. If at any time the number of employers falls below ten, or the number of employees below 10,000 no further policies should be issued until the minimum number is restored. The insurance should be conducted upon the reserve basis, the reserve being subject to the approval of the insurance commissioner. Assessments should be allowed in the discretion of the directors of the Association. The number of votes to which each member is entitled should be left to the Association.
Premiums
The directors of the Association should classify the members by industries and according to the degree of risk, with differential rates in each class to allow (1) for variation from the standard of equipment and (2) for accident experience. The premiums should be based upon the estimated payroll adjusted at the end of the year. In the cases of contractors, adjustment should be upon the completion of the contract. A penalty should be provided for misrepresentation of the payroll.
The premium should be paid at such times as may be fixed by the directors. In case of default, the Association should be authorized to maintain suit for their collection.
All rates, classifications, etc. should be approved by the [page 7] Insurance Commissioner, who should have power to withdraw his approval.
Dividends
The directors, with the approval of the Insurance Commissioner, should have power, after one year, to declare dividends on policies not having a loss in excess of the premiums. No dividends should be paid until after the payment of expenses and compensation and the setting aside of a proper reserve.
Liability for Losses
The Association should determine for itself whether the liability for losses should be upon the funds of the Association as a whole, or whether the members should be divided into classes for the purpose of liability.
Regulations and Inspections
The directors of the Association should have power to inspect the books, payrolls, etc. of the members, and the make rules and regulations therefore, and a penalty should be provided for a violation of these regulations.
Insurance of Public Liability
The Association should be given authority to insure the liability of its policy-holders to the public as well as to its employees, whether for compensation or for damages at law for injuries.
Re-insurance
The Association should be permitted to re-insure all risks.
Self-Insurance
Should be permitted in the discretion of the Board, if the applicant has 1000 employees to whom he is liable to pay compensation. Some person connected with the management of the applicant's business should give a bond satisfactory to the Insurance Commissioner, who should have power to [page 8] require the maintenance of the same reserve as is required of other insurers. The applicant should be required to make into his insurance fund such annual payments as the Insurance Commissioner may require.
Regulation of Private Insurance (applicable to mutual associations and stock companies)
No private company should be allowed to do business unless the following regulations are complied with. Inconsistent provisions in a policy should be void, and the policy should be deemed to contain the necessary clauses:
(1) A direct liability of the insurer to the employer, enforceable by the employee
(2) Prohibition of limitation of liability to an amount less than the schedule of compensation given in the act
(3) Default in the payment of premiums or in the giving of notices not to make the policy void
(4) Jurisdiction of the insured to be jurisdiction of the insurer
(5) Notice to and knowledge of insured to be notice to and knowledge of the insurer
(6) Awards against the insured to be binding against the insurer All private companies should conduct business on the reserve plan, the reserve being subject to the approval of the Insurance Commissioner. No policies should be cancelled unless notice is given to the insured and to the Board and then not until after the expiration of the time stated in the notice, and until a certain time (specified in the act) after the notice has been given to the Accident Board.
All rates should be fixed according to the nature of the business and the degree of the hazard, and a schedule of rates should be filed with the Insurance Commissioner, who should have power of approval and also an authority to withdraw such approval. Rebates and discrimination in rates should be prohibited. The act should contain no provisions limiting commissions paid to agents. [page 9]
Election
Method of Election
Acceptance of the compensation provisions of the act should be implied on the part of both employer and employee, unless one of them, before the injury, notifies in writing the other and the Accident Board that he rejects. The act should specify a time after which the implication of acceptance should become effective, providing also for the case where the contract of hire is not made until after the act takes effect.
Unless the employer has taken such action to reject, he should, before the time so specified, secure the approval of the Accident Board to some form of insurance of his liability for compensation, either in a private company, in the State Administered Insurance Fund, in a mutual association of employers, or by employers, or by means of self-insurance, and failing this he should be considered to have elected to join the State Administered Insurance Fund.
The act should be so drafted as to permit the employer to accept compensation as to some employees and reject it as to others, and to insure his liability for compensation to a portion of the employees, as to whom he has accepted the compensation provisions of the act, by one of the above-mentioned methods, and the remainder by another of such methods.
Both employer and employee should have opportunity to withdraw at any time their notice of rejection of compensation. Such notice of rejection should be effective for only one year, at the expiration of which time acceptance should again be implied in the absence of a new notice.
Duration of Election
Both employer and employee should be given the right to withdraw their acceptance of compensation, but the withdrawal should be made as difficult as possible, and in no event should withdrawal be allowed before the expiration of a certain time (to be stated in the act), with notice in writing to the other party and to the Accident Board a certain time (to be stated in the act) before the withdrawal becomes effective. [page 10]
Election by Minors
Persons under legal age should have full rights of choice, without interference by their parents or guardians, as to whether they wish to accept the compensation provisions of the act of reject them.
Inducement to Accept Compensation
The three defenses, in suits at law, of fellow servant, assumption of risk, and contributory negligence, should be abrogated, irrespective of the acceptance or rejection of compensation by the employer or employee (i.e. the employer, even though he has accepted the compensation provisions of the act, should not be allowed, in an action at law by an employee who has rejected the compensation provisions of the act, to set up any of these defenses). The contributory negligence of the injured employee should, however, have effect in reducing the amount of damages* to be recovered in an action at law where the compensation provisions of the act have not been accepted by both employer and employee. As stated infra (under Injuries Included) the contributory negligence of the injured employee should have no effect on the amount of compensation to be allowed where the compensation provisions of the act have been accepted.
* To be estimated by the jury
SCOPE OF THE ACT
Exclusiveness of Compensation as Remedy against Employer
In the compulsory act, compensation should be the exclusive remedy. Even though the employer has been guilty of personal negligence or has violated a safety statute, there should be no action at law against him for damages, the employee and his dependents being confined to the compensation provided by the act. The same is true of the elective act where both employer and employee have accepted.
Third Person's Liability
If the injury gives a right to compensation, but is caused under circumstances which entitle the employee to proceed at law against some third party whose negligence has caused the injury, the employee should [page 11] be given the right to proceed both against such third person for damages at law and under the act for compensation, but any money collected from the third party should be credited on the compensation payable. Suitable provision should be made for the reimbursement of the person paying the compensation where compensation has been paid before anything has been collected from the third party.
Employments Included
All employments, except farm labor and domestic service, should be included in the compulsory act, regardless of whether they are extra hazardous or not.
If to meet constitutional objections the act must be confined to extra-hazardous employments, a list of these employments should be included in the act. Employers and employees in other employments should be considered to have come under the act, in the absence of notice to the contrary. The same rules should apply as in the case of the elective act (see supra).
In the elective act, all employments should be included.
The state and its agencies should be included, with appropriate provision for the winding up of existing pension schemes. An appropriation will be necessary to meet the cost of insurance of state employees, and wherever necessary authority should be granted to counties, cities, etc. to raise money for this purpose. The Advisory Board, to which these questions of policy were submitted, is of the opinion that the Kern Bill, now before Congress, makes sufficiently adequate provision for Federal employees and should be supported. The same bill, with slight changes, might well serve for the states, if it should be decided to provide for public employees in a separate bill.
EMPLOYERS Included
All employers should be included, irrespective of the number of their employees, if they have a usual place of business within the jurisdiction (e.g. an employee of a Massachusetts corporation coming into New York to do business should not receive compensation under the New York law for an [page 12] injury; but if the same corporation maintains an office in New York, an employee of such office should receive compensation under the New York law. As to the place where the injury occurs (see infra, Injuries Included). The state acts should exclude the persons covered by the Federal Act. In the case of an injury occurring to an employee loaned or hired temporarily to another, the first employer or his insurer should be liable for the compensation.
The act should be so drafted as to prevent evasion of the liability by any system of independent contracting (e.g. the owner of a lot who has a house built should not be liable to insure the employees of the builder, but the mine owner who employs a foreman, the latter hiring and paying the workmen, should be liable to insure such workmen, and so in the case of the manufacturer who sets up a straw man to hide behind.
Employees Included
The act should apply to all employees whether manual laborers or clerks, except domestic servants, farm laborers, outworkers, and persons whose employment is casual and not for the purpose of the employer's business. The exception as to domestic servants should not apply in the case of employees of hotels, clubs, restaurants, etc.
Of the compulsory act is limited to hazardous employments, all employees should be included, unless to meet constitutional objections it is necessary to limit the scope of the act to those employees engaged in the hazardous part of the hazardous business.
Injuries Included
Compensation should be allowed in case of death resulting from the injury within six years, and of disability resulting from the injury and lasting for more than three days. No compensation should be allowed for disfigurement not resulting in disability.
Compensation should be allowed if the injury is in the course of the employment, whether or not it arises out of it and regardless of the negligence of either employer or employee, but no compensation should be allowed where the injury is caused by the deliberate intention of the [page 13] employee to cause injury or death to himself or to another, or where it is caused by the willful act of a third person intended to injure the employee and not directed against him as an employee.
The act should apply to injuries occurring either within or outside the state to employees of employers subject to the act, but no compensation should be payable where damages or compensation on account of the same injury have been collected in another jurisdiction.
Occupational Diseases
The act should apply to disability or death resulting from an occupational disease contracted in the course of any employment in which the employee was employed during the year preceding the beginning of the disability. The act should contain a list of occupational diseases (copied from the English Act, and additions thereto made by regulation), and the Accident Board should be given power to add diseases to this list. The liability should primarily be imposed on the last employer or his insurer, but if he can prove that previous employments were in whole or in part responsible for the contraction of the disease, he should be allowed to recover from such previous employers or their insurers in proportion to their responsibility. The wages on which compensation is based should be the wages in the service of the employer liable for compensation.
SCHEDULE OF COMPENSATION
Disability
Total
* 75% of the weekly wages ** during the continuance of disability, subject to a maximum compensation of $18.00 a week and a minimum compensation of $9.00 a week; but if the weekly wages are under $9.00, the compensation should be the weekly wages, except in the case of a minor who is not physically or mentally defective at the time of the injury, in which case the compensation should be the weekly wages until he reaches 21, after which it should be increased to 75% of the full weekly [page 14] wages of an able-bodied workman in the occupation in which the minor was engaged at the time of the injury.
In the case of an injury occurring to an employee who has previously suffered an injury, compensation for the second injury should be based on the disability existing after the second injury (e.g. a man partially disabled by the loss of a leg, who is totally disabled by the loss of his other leg, in a second injury, should be compensated as for total disability); but if the injured employee is already in receipt of compensation for the first injured employee is already in receipt of compensation for the first injury, the maximum compensation for both injuries should not exceed $18.00 per week.
*This figure represents the views of the Advisory Board, to which these questions of policy were submitted, as to the just and proper percentage of wages which should be granted as compensation. If a lower percentage is adopted, corresponding changes will have to be made throughout the schedule. The members of the Advisory Board were firmly convinced that in no event should the compensation be less than two-thirds of the wages.
** See infra, Computation of Wages
Provision should be made for the case where the second injury happens to a temporarily partially disabled employee, whose wages would, but for the second injury, be increased after the partial disability is over. (e.g. The compensation in the case of this second injury might be based on his weekly wages as they were before the first injury).
There should be no list of injuries conclusively presumed to be permanently total.
There should be no provision reducing the compensation in case of old men.
Partial
Compensation should continue during disability and should be 75% of the difference between the weekly wages * before the injury and the weekly wage earning capacity after the injury, with a maximum of $18.00 a week, but if the weekly wages are less than $9.00, the compensation should be 100% of the difference between the weekly wages before the
* see infra, Computation of Wages [page 15]
injury and the weekly wage earning capacity after the injury. If the injured employee is a minor, his compensation after he reaches 21 should be increased to 75% of the difference between the full weekly wages of an able-bodied workman in the occupation in which the minor was working at the time of the injury and the weekly wage earning capacity of the injured employee after he reaches 21.
If the injured employee refuses to work after suitable work is secured for him he should not be entitled to compensation; but if no work is securable, he should receive compensation as for total disability.
The same provision should be made for the case of a second injury, as in the case of total disability. (see supra)
In the determination of the weekly wage earning capacity after the injury the value of housing, board, lodging, fuel and other advantages which are received from the employer as a part of the remuneration and which can be estimated in money, and the value of gratuities received in the usual course of business from others than the employer should be included.
The accident Board should be authorized to require the injured employee from time to time to make an affidavit as to the wages which he is then receiving, including the value of housing, board, lodging, fuel and other advantages received from the employer as a part of the remuneration, and which can be estimated in money, and of the value of gratuities received in the usual course of business from others than the employer. A penalty should be provided for knowingly making any false statement in the affidavit. If the employee fails to make an affidavit, when required, he should not be entitled to compensation while the failure continues, and the compensation for such period should lapse. [page 16]
Medical, etc. Attendance and Supplies
At any time after the injury, if requested by the employee or ordered by the Accident Board, the employee should be furnished, for a reasonable * time, medical, surgical and hospital attendance and supplies in a reasonable * amount. The employee should be at liberty to select his own physician or hospital if he so desires, but the Accident Board should be authorized and directed to establish a schedule of fees for such service. No recovery should be allowed for such services in an amount greater than that allowed in the schedule.
During the time when an injured employee is in the hospital his compensation should be reduced to 50% of the weekly wages.
* The question of reasonableness should be left to the Accident Board.
Waiting Period
No compensation should be allowed for the first three days of disability, except medical, surgical and hospital attendance and supplies, no matter how long the disability may last.
Time of Making Payments
Payments should be made periodically at the same intervals as wages were payable, but not oftener than once a week.
Sick Leave of State, etc. Employees
In jurisdiction allowing public employees annual or sick leave, the act should contain a provision allowing the injured employee, in the discretion of the head of his department, to use unexpired sick and annual leave as an alternative to compensation, the compensation to begin when the leave is exhausted.
Death
Funeral Expenses
Funeral expenses should be paid in all cases, whether or not there are persons entitled to compensation, the amount to be in the [page 17] Discretion of the Board, but not exceeding $75.00. Payment should be made to the creditor for such expenses, or to the person who has paid the creditor.
Widow: -- Should receive compensation equal to 40% of the weekly wages of the deceased employee, payable until her death or marriage. In case she marries, she should receive a lump sum equal to three years' compensation. Payment should be made regardless of dependency, but she should receive no compensation if, at the time of the injury, she was living apart from the deceased employee as a result of her desertion of him, or if her marriage to the deceased employee took place after the injury.
Widower: -- if wholly dependent, should receive compensation equal to 40% of the weekly wages of the deceased employee, payable until his death or marriage; and a proportionate amount (to be determined by agreement, arbitration, or the Board) if partly dependent. No compensation should be allowed if at the time of the injury he was living apart from the deceased employee as a result of his desertion of her, or if his marriage to the deceased employee took place after the injury.
Widow or Widower and Children: -- 10% additional should be allowed for each child under eighteen, or over eighteen and incapable of self-support, not to exceed a total of 75% for widow or widower and children. Compensation on account of a child should cease when he dies, marries or reaches the age of eighteen or if over eighteen and incapable of self-support, becomes capable of self-support. Payments on account of a child should be made to the parent, unless the child is living separate, in which case the Accident Board should have authority to make payment to the child, if of age, or to its next friend. [page 18]
Children, if no Widow or Widower: -- 25% should be paid for one, and 10% for each additional child not to exceed a total of 75%. Compensation for each child should be paid until he dies, marries or reaches the age of eighteen, or if over eighteen and incapable of self-support, becomes capable of self-support. Payment should be made to the child if of age or to its next friend.
Parents: -- 25% should be paid if one is wholly dependent, and 40% if both are wholly dependent, and a proportionate amount (to be determined by agreement, arbitration or the Board) if the dependency is only partial. These percentages should be paid if there is no widow, widower or child. If there is a widow, widower or child, the parents should receive so much of these percentages as, when added to the total percentage payable to the widow, widower or child, will not exceed a total of 75%. Payments should continue for eight years from the death of the injured employee, unless, before that time, the parent dies, marries, or ceases to be dependent.
Brothers, Sisters, Grandparents or Grandchildren: -- 20% should be paid if one is wholly dependent and 30% if more than one, divided share and share alike. If no one is wholly dependent and one or more are partly dependent, 10% should be paid, divided share and share alike. These percentages should be paid if there is no widow, widower, child or dependent parent. If there is a widow, widower, child or dependent parent, there should be paid so much of these percentages as, when added to the total percentages payable to the widow, widower, children or dependent parents, will not exceed a total of 75%. These payments should continue for eight years from the death of the injured employee, unless before that time, the beneficiary dies, marries, or ceases to be dependent.
Compensation on death of beneficiary
Upon the cessation of compensation for death to or on account of any person, the compensation of the remaining persons entitled to compensation, [page 19] for the unexpired part of the period during which their compensation is payable, shall be that which such persons would have received if they had been the only persons entitled to compensation at the time of the death of the deceased employee. (e.g. if there are a widow and seven children, they are, according to the above schedule, entitled to 75% of the husband's wages. If one child should die, the compensation should continue at 75%, and so on until the number of children is reduced below four, for a widow and four children are entitled to 75%.)
Compensation based on dependency
In the case of widows and of children under eighteen, compensation should be allowed regardless of dependency. In all other cases no compensation should be allowed unless dependency * exists at the time of the death, except in those cases where a person dependent at the time of the injury ceases to be dependent by reason of the fact that the injured employee is no longer able to furnish support. (e.g. the case of a parent wholly dependent at the time of the injury, who thereafter is obliged to turn elsewhere for support in whole or in part. Such parent should be considered as wholly dependent.)
Time of ascertaining dependency
Posthumous children should be entitled to compensation whether the marriage takes place before or after the injury. Stepchildren should be entitled if the marriage took place before the injury. Adopted children should be entitled if adopted before the injury. Adopted children should be entitled if adopted before the injury, and if living with or receiving support from the deceased at the time of his death. [Illegitimate] children should be entitled if living with or receiving support from the deceased at the time of his death. Married children should be excluded, unless dependent at the time of the death of the deceased.
* The question as to what facts constitute dependency in whole or in part should be determined by agreement, arbitration or the Accident Board. [page 20]
Half brothers and half sisters should be entitled. Stepbrothers and stepsisters should be entitled if the adoption took place before the injury.
Children of adopted children or of stepchildren, and stepchildren of children or of stepchildren or of adopted children, should be excluded.
Only those children who, at the time of the death of the deceased employee, are under eighteen years of age or over that age and incapable of self-support should be entitled.
Stepparents and parents by adoption should be entitled if the marriage or adoption took place before the injury.
No persons entitled to compensation
If there are no persons entitled to compensation as above stated, the funeral expenses should be paid (see supra), and the sum of $1,000 should be paid into the State Guarantee Fund (see supra Insurance).
Death after waiting period is over (i.e. where injured employee has become entitled to payments)
Payments made and medical, etc., attendance furnished to the injured employee before his death should not be dedicated from the death payments.
Maximum and minimum
In computing death benefits, the weekly wages of the deceased employee should not be considered more than $25.00 nor less than $12.00, but the total weekly death compensation should not exceed the actual weekly wages. (see infra Computation of Wages)
The minimum total death payment should be $1000. Where the payments to the dependents are less than $1,000, the difference should be paid into the State Guarantee Fund (see supra). [page 21]
Alien non-resident dependents
Should be treated the same as other dependents.
Time of payments
Should be the same as wages of the employee before his death, but should not be paid more frequently than once a week.
Computation of Wages
Weekly wages should be 1/52 of the wages received by the injured employee, during the year proceeding the injury, * in the occupation in which and at the rate of pay at which he was working at the time of the injury. This basis should be adopted only where it will result in justice. In other cases, as, for example, where the wages of the injured employee have been increased or decreased during the year, or where through sickness or other unusual circumstances the employee has lost a considerable amount of time, the weekly wages should be 1/52 of the sum obtained by adding the wages received by the injured employee during such portion of the year as he worked at the rate at which he was working at the time of the accident, to the wages received during the remainder of the year by an average workman of the same class and rate of pay as the injured employee.
The value of housing, board, lodging, fuel and other advantages which are received from the employer as a part of the remuneration and which can be estimated in money, and the value of gratuities received in the usual course of business from others than the employer, should be included as part of the wages.
In seasonal employments (i.e., those in which the custom of the trade is for work to continue for only part of the year) there should be added to the wages earned during the season (or which would be earned during the season had the employee worked throughout the season) a reasonable amount representing the earnings in other occupations during the balance of the year by the average workman in such seasonal employment, or, if this is impossible to ascertain, the wages of an average day laborer during the balance of the year.
*In all cases of compensation for occupational diseases, there is no definite "injury", and the beginning of disability must be used instead. [page 22]
Commutation of Installment Payments
Should be allowable in cases of death and of permanent disability by the Board in its discretion when payments are below 5% of wages, or when the beneficiary is or is about to become a non-resident of the United States, or for any other reason satisfactory to the Board. The amount paid should be a lump sum amounting to the present value of all future payments computed at 4% true discount compounded annually, disregarding the probability of the happening of all contingencies except death. The expectancy of life should be determined according to the "American Mortality Table", unless this method involves an improper delegation of legislative power.
Injured employee going to prison
In such case the compensation due should be paid to the family, in such proportions and to such persons as the Accident Board may direct, and if there are no persons to whom payment is directed by the Board, the compensation should be paid into the State Guarantee Fund (see supra).
Other beneficiary going to prison
In such case the compensation to such person should cease during the time of confinement, and the payments for this period should be made into the State Guarantee Fund (see supra). In cases of unusual hardship* the Accident Board should have power to suspend this provision, and to direct payments to be made to the persons dependent on the confined person.
*What constitutes unusual hardship should be determined by the Board.
Voluntary payments
Any payments voluntarily made to a beneficiary by the employer or his insurer at a time when they are not yet due by the terms of the act, should, in the discretion of the Accident board and in such manner as it may direct, be deducted from the amount to be paid as compensation. (e.g. sums advanced to the employee while the case is not yet settled).
Savings on insurance of injured employee
The amount of compensation payable should not be reduced in any way by taking into consideration the savings or insurance of the employee. [page 23]
PROCEDURE
Notice
Notice to the employer of the injury or death should be required within a certain time (to be stated in the act), but the Board should have power to allow compensation if the employer had knowledge of the injury or if reasonable* cause is shown for not giving the notice within such time. The act should provide for the contents of the notice, the manner of giving it, by whom it should be given, and to whom it should be given, and should provide that defects in a notice may be taken advantage of only when they are not remedied after notice of the defect has been given and an opportunity afforded for amendment. No claim for compensation should be necessary.
*The question of reasonableness should be determined by the Board
Medical Examination
The injured employee should be required to submit to medical examination at reasonable* times and places whenever requested by the employer or insurer or ordered by the Board, but not oftener than once a week at the request of the employer or insurer. The examination should be made by the physician of the employer or insurer or by a physician appointed by the Board, but the employee should be entitled to have his own physician present at his own expense. Reasonable* notice of time and place of the examination should be given to the employee, who should be entitled to his expenses in attending all examinations after the first. If the employee refuses to submit to or obstructs the examination, his rights to claim compensation should be suspended and no compensation should be payable during the period of his refusal or obstruction, and the compensation for such period should not be paid to the employee or his dependents, but should be paid into the State Guarantee Fund.
If the employee refuses to submit to reasonable* treatment or operation advised by the physician of the employer or insurer and his own physician, if any, or by the Board's physician if the others do not agree, no further compensation should be payable.
*The question of reasonableness should be determined by the Board. [page 24]
In the case of the death of the injured employee, the employer or insurer should, in the discretion of the Accident Board, be entitled to have an autopsy performed at his own expense. If the family refuses to allow the autopsy, no compensation should be payable to them.
Physicians Representing Board
The Board or any member of deputy should have authority to appoint a duly qualified physician to examine an injured employee and to report. In case of different of opinion between the physician of the employer or insurer and the employee's physician, the committee of arbitration or the Board should have power to accept the report of the third physician as conclusive. The fee should be $5 and actual and necessary traveling expenses, but the Board should have authority to allow additional fees in extraordinary cases, the necessity and amount to be in the discretion of the Board. Payment should be made by the State.
Settlement of Compensation
Agreements
Agreements settling compensation should be allowed only if made in writing and filed with the Board, and should be valid only if approved by the Board, which should notify the parties of its action and communicate to them the reasons for its disapproval. No agreements should be allowed if an award of an arbitration committee or of the Board has been previously made.
An agreement should be subject to modification at any time by a subsequent agreement, subject to the same limitations as in the case of an original agreement. All agreements, in the absence of fraud or mistake, should be binding between the parties, unless modified by a subsequent agreement or unless reviewed by the Board on the application of either party.
Agreements should contain a statement of the facts and should be in the form prescribed by the Board. No agreement should be approved by the Board which limits the period for the payment of the compensation (i.e. the agreement should stipulate that payments should continue [page 25] until further agreement, or order of the Board).
Arbitration of Disputes
If the parties cannot agree, one of them should apply to the Board for the formation of a committee of arbitration composed of three members, one member appointed by each party, and the third member to be a member of the Board or deputy selected by the Board. Vacancies should be filled in the same manner as the original appointment. If within a certain time (to be stated in the act) either party fails to name his representative, the Board should fill the vacancy and notify the parties. An application on the part of the injured employee or his dependents should not be considered defective by reason of the failure to state the name of the person liable for compensation. It should be enough if the name, address and business of the employer are given. The Board from its records, should fill in the necessary information.
Each arbitrator representing a party should receive $5 and actual and necessary traveling expenses, but the Board should be authorized to allow additional amounts in extraordinary cases, the necessity and amount to be in the discretion of the Board. Payment should be made by the state.
The committee of arbitration should make such investigation as it may deem necessary and within thirty days after its formation should make an award which should be filed with the Board, together with a statement of its conclusions of fact and rulings of law. Immediately after such filing the Board should send to the parties a copy of the award.
Such award should be final and conclusive between the parties unless within a certain number of days (to be stated in the Act) after a copy has been sent to the parties, either party makes to the Board an application for review.
If an application for review is made or if the committee fails to make an award within thirty days after its formation, the Board [page 26] should make such investigation as it may deem necessary and should make an award which should be filed with the record of proceedings and should state its conclusions of fact and rulings of law and should immediately send to the parties a copy of the award.
A committee of arbitration or the Board should have power to make an award for a nominal sum in cases where there is no disability at the time of the hearing, but the evidence shows a probability of disability occurring later.
No award of a committee of arbitration or of the Board should limit the period for the payment of the compensation (i.e. the award should stipulate that payments should continue until further order of the Board).
The award of the commission should be final and conclusive between the parties unless within a certain number of days (to be stated in the act) after a copy has been sent to the parties, either party appeals to the highest court of the state. On such appeal the jurisdiction of such court should be limited to a review of questions of law. The Board should be given power to certify questions of law to the highest court and such certified questions and all appeals should have precedence over all other civil cases in such court.
If the committee of arbitration or the Board or the highest court determines that proceedings have been brought, prosecuted or defended without reasonable ground, it should be authorized to assess the whole costs upon the party who has brought, prosecuted or defended the proceedings.
Limitation of Time
The right to file an application for the formation of a committee of arbitration should be barred after one year from the injury or death, unless the parties have made an agreement approved by the Board, settling the compensation, or unless payments of compensation have been made, in which case the right to file the application should not be barred until the expiration of one year [page 27] from the date of the last payment. The Board should be authorized to allow the application to be made after this time if it determines that the delay is not due to the fault of the applicant and that the other party has not been prejudiced by the delay.
This limitation should not apply as against any person entitled to compensation, who is mentally incompetent or a minor, so long as he has no committee or guardian. Such a committee or guardian should be appointed by any court of competent jurisdiction upon the application of any of the parties, and the period of limitation should begin to run on the date of the appointment of such committee or guardian, or when the minor becomes of age.
Modification of Agreement and Awards
The Board should have power to receive applications for the review of any agreement or award on the ground that conditions have changed (e.g., that the disability has increased or decreased, or that the widow has remarried). Such applications should be allowed as often as desired, but the Board should have power to impose the entire costs on the unsuccessful party. After hearing the parties the Board should have authority either to increase or diminish the compensation or end it, or, where it has been previously ended within the last year, to require the payments to begin anew. The Board should be given power to diminish compensation to a nominal sum, where it is not satisfied that the recovery is permanent.
Enforcement of Agreements and Awards
The Act should contain suitable provisions for the enforcement of agreements and awards.
Attachments, Executions, etc.
Should not be allowed, except that attorney's fees approved by the Board should be a lien upon the compensation due if so ordered by the Board. [page 28]
Attorneys' Fees
No claim for legal services in connection with a claim for compensation should be enforceable unless approved by the Board.
Assignments of Compensation or of Right Thereto
Should be prohibited absolutely.
Reports of Accidents
Every employer of labor, except agricultural or domestic labor, including the state and all governmental agencies created by it, should keep a record of every accident causing personal injury to an employee in the course of his employment. The record should contain such information as the Accident Board may require, and should be open to inspection by the Board at all reasonable* times.
*The question of reasonableness should be determined by the courts.
Within forty-eight hours after any such accident, the employer should send to the Board, a report stating the name and address of the employer and employee, the business of the employer and the occupation of the employee, and the cause, nature, time and place of the accident and resulting injury, and such other information as may be reasonably* required by the Board. Subsequent reports of the result of the accident and of the condition of the injured employee should made by the employer at such time as the Board may require. The reports should be on or in conformity with standard schedule blanks which should be furnished free of cost to the employer by the Board. The form and contents of the blanks should be determined by the Board.
Reports should not be evidence of the facts therein stated in any action arising out of the accident which is reported.
The Act should contain a penalty for the neglect or refusal to make the reports.
*The question of reasonableness should be determined by the courts. [page 29]
Preferences
If the State Guarantee Fund is called upon to pay compensation to an employee of an uninsured employer or of an employer who is insured in an insolvent insurer, or who is carrying his own insurance and is insolvent, it should, in its proceedings against the employer or insurer, have priority over his other debts, except for taxed and for wages. The Act should make suitable provision for the protection of prior liens.
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