Wednesday, January 13, 2016
How does workers' comp compare among TPP countries?
Interjurisdictional comparison of compensation for work-related injury is difficult. Among the Trans Pacific Partnership (TPP) countries, there is wide variation in laws covering work injuries. The “context” of each jurisdiction is critical to any comparative study. To complicate matters for comparison in workers’ compensation and OH&S, three TPP member states (Canada, the US and Australia) have laws that vary by state or province. Some TPP countries integrate work-injury compensation with other aspects of social insurance. Just to get an adequate baseline on what would seem to be a simple measure can be overwhelming.
Comparisons of employer cost for work-injury “social insurance” (whether workers’ compensation or some other social security provision) are even more problematic. Employer costs for work-injuries typically include workers’ compensation insurance costs but these are driven by wage rates, injury rates, compensation or benefit rates, medical costs and, of course, injury frequency and severity. With a wide variety of mechanisms from individual employer liability to integrated accident compensation in TPP countries, there is no simple approach to a common comparison on the employer cost side.
To illustrate this challenge for the worker-side comparisons, consider what would be required to compare the most common work-injury compensation cases. For argument’s sake, consider the effort to compare the compensation a worker with a typical work-related time-loss injury might be entitled to in each TPP member country. Sounds simple enough but let's make the consideration even simpler; let's look at only the most common work-related injury cases that result in time away from work. The median days-away-from-work in the US is 8 calendar days, so keep that in mind when you think about employer responsibilities and worker compensation when you consider each jurisdiction.
A full review of each TPP member state and the individual state/provincial workers’ compensation provisions in Canada, Australia and the US is beyond the scope of this blog post but here are some notes on each member state that focus on coverage for short duration absences and wage-loss due to work injury.
As a starting point, consider how work-injury compensation cases are handled in the US. Every US state has some sort of waiting period; in this discussion, a waiting period is a worker deductible in the form of days (3 to 7 calendar or work days, depending on the jurisdiction) without earnings or benefits before compensation for temporary total disability begins. All but two states have retroactive periods so claims for work absences of greater than a specified number of days or weeks (typically 14 calendar days to four weeks) are compensated retroactively for the waiting period. Benefit rates are typically 66.67% of average earnings but may be capped by other provisions such as statutory maximums.
The compensation or benefit rate is 60% of the basic daily benefit plus a temporary disability special supplement of 20% of the basic daily benefit ; it is paid after a three-day waiting period until recovery (but the employer pays 60% of the average daily wage for the first three days).
The compensation or benefit rate is 80% of the worker’s average daily wage in the six months before the disability began. The Employment Injury Insurance part of the social security program pays beginning on the fourth day following certified disability from work.
The rate is 100% of the insured's covered monthly earnings is paid from the first day of disability until certification of permanent disability.
100% of the insured's covered earnings is paid after a 20-day waiting period for up to 11 months and 10 days. (The employer pays the insured's full earnings for the first 20 days.)
The employer pays 100% of the insured's earnings from the first day of treatment until the insured is recovered, discharged from the hospital, or assessed with a permanent disability.
For public-sector employees, the monthly benefit is 100% of net earnings. For private-sector employees, the monthly benefit is the average monthly net earnings in the three months before the disability began. The benefit is paid from the day of injury for up to 52 weeks (may be extended up to an additional 52 weeks).
Benefits are 66.7% of the employee's average monthly earnings in the six months before the disability began is paid monthly after a four-day waiting period for up to five years. If the disability lasts more than 14 days, the benefit is paid retroactively for the first four days. The maximum monthly benefit is B$130.
For work-related injury, 100% of the insured's average monthly earnings in the 12 months before the disability began is paid for up to 14 days if not hospitalized (up to 60 days if hospitalized). Thereafter, 66.7% of the insured's average monthly earnings in the 12 months before the disability began is paid. The benefit is paid from the first day of incapacity for the duration of incapacity, up to one year.
The workers’ compensation idea is integrated into a personal-injury “accident compensation” scheme covering both work and non-work related injuries resulting in incapacity for work. The system is administered by the ACC. The benefit is 80% of the worker's average weekly earnings in the period before the incapacity began is paid until he or she is able to return to work. For work-related personal injuries, the employer pays for the first week of incapacity after which the ACC insurer takes over the payments.
Provincial schemes with temporary benefits ranging from 75% (Nova Scotia) to 90% (BC, Alberta) of Net wages. No waiting period in most provinces (except NS and NB which also have retroactive periods and some waiting period exemptions).
The benefit varies depending on the state or territory in which the award is made. Generally, the benefit rate is 85-100% of earnings for a minimum of 26 weeks. Benefits may be payable for an extended period at reduced levels. Employers responsible for the first 5 or 10 days (Victoria) of wage compensation. No worker waiting period.
As the TPP agreement is ratified by the current dozen member states (and perhaps others in the future), questions regarding the cost and comparability of work-injury coverage are likely to grow. I doubt the backers of the TPP would want to see the agreement result in diminished coverage for work-related injuries but workers’ compensation (whether on its own or integrated into a broader social security system) are real costs with real consequences for employers, workers and their families. Research is needed now to establish a baseline that will help future studies determine how the TPP impacts worker health, safety and compensation for work-related injury.