The Future of Worker’s Comp in South Carolina
Workers Comp Law in South Carolina
Most of the time, decisions made in other states don’t affect us here in South Carolina. Sometimes, though, the decisions are so big, they could have an impact on our own workers’ comp law. A recent decision from the Supreme Court in the state of Oklahoma is one of those decisions.
In the case Vasquez v. Dillards, the Oklahoma Supreme Court determined that the state’s Opt-Out Act was unconstitutional. The Opt-Out Act allows employers to “opt out” of the state’s workers’ compensation program under certain circumstances by providing an alternative to the workers’ compensation program.
But first, what is worker’s compensation?
What is Workers’ Compensation?
Workers’ comp, as it is often known, is a program that provides compensation to employees who sustain injuries or develop illnesses while on the job.
If an employee falls and breaks a leg at the workplace, for example, or develops a respiratory disease due to conditions on the jobsite, he or she can make a claim through the workers’ comp program and receive benefits. Benefits may include medical payments, lost wages, and compensation for permanent disfigurement or disability. The employer pays these costs indirectly by carrying workers’ compensation insurance.
By having this program, both employers and employees avoid the long, convoluted, and often extremely expensive route of a lawsuit. In other personal injury cases, the injured party must prove the other person was at fault in order to get compensation. With workers’ comp, that’s not the case. As long as the illness or injury occurred while on the job, the employee can be compensated.
It’s important to note that workers’ compensation programs are run by the state, not by the federal government. Each state, therefore, has its own particular rules. For instance, in South Carolina, all employers with four or more employees must carry workers’ compensation insurance (with a few exceptions). Oklahoma’s program is different from South Carolina’s, though the basic objective and structure is the same.
The Oklahoma Supreme Court’s Decision on the Opt-Out Act
Back to Vasquez v. Dillards.
In 2013, the State of Oklahoma adopted a workers comp law known as the Opt-Out Act as part of a big overhaul of the state’s workers’ comp program. The Opt-Out Act allowed certain qualified employers to not take part in the state’s workers’ comp program and instead to offer an alternative program called the Employee Benefit Plan, created according to federal law (more specifically, the Employee Retirement Income Security Act).
Some employers were happy with the Opt-Out Act because they believed that having alternatives to the workers’ compensation system results in lower costs, high medical care, and faster return-to-work times following injuries. Opponents believe it gives too much power to the employer to create a plan that benefits the employer rather than the employee. Many also believe it puts the burden of proving the injury on the employee while at the same time lacking impartial, third-party review of employer decisions.
The Oklahoma Supreme Court determined that the Act was an “unconstitutional special law,” essentially ending employers’ option to not take part in the state’s workers’ compensation program. Approximately 60 companies had opted out and were given 90 days to make arrangements to self-insure or purchase workers’ compensation insurance.
Why the Oklahoma Supreme Court Decision May Matter to South Carolina
Why does this matter for South Carolina? It may or may not. Remember that workers’ comp programs are run at the state level. It’s rare for a state to offer employers an alternative to the program; besides Oklahoma, Texas is the only other state with similar laws. However, Tennessee and South Carolina are considering it. Both have pending legislation that would create an alternative program similar to those in Oklahoma and Texas.
South Carolina Bill H. 4197 was introduced in May 2015 and then referred to the Committee on Labor, Commerce and Industry, and hasn’t moved since. The Vasquez v. Dillards decision could be the end of the bill entirely, as legislators see the potential problems that alternative plans can bring, or it could spur lawmakers to revise the law as written. Oklahoma is only now dealing with the aftermath of the decision within their state, so we’ll have to wait and see whether it has any impact on us here in South Carolina.
Have a Question about Workers Comp Law in South Carolina?
We’d be happy to talk to you about it. Talk to one of our Greenville workers’ comp lawyers at (864) 235-3154. Fulton & Barr’s office is based in Greenville and serves the Upstate South Carolina area. Call today and schedule your free initial consultation.