Workers’ Compensation Immunity

A fundamental principle of workers’ compensation laws is that an employer who provides compensation to an injured employee (pursuant to the applicable state statute) is entitled to immunity from civil actions by that employee or his/her representatives (i.e., an employee’s exclusive remedy is workers’ compensation benefits). In some states, this immunity is extended to upstream parties, such as a project owner or general contractor under certain circumstances. This survey is intended to examine several key issues with respect to the scope and extent of workers’ compensation requirements and immunity across the 50 states. Below is an explanation of each column in the survey:

Type of Workers’ Compensation Insurance

This column addresses whether workers’ compensation insurance is provided through: (1) private insurers, (2) a monopolistic state fund (i.e., only the state provides workers’ compensation benefits), or (3) competitive state funds (where state owned and operated entities compete with private commercial insurers to write workers’ compensation insurance).

Workers’ Compensation Exclusive Remedy Statute

This column references the state statutes which address the extent to which workers’ compensation benefits constitute an injured employee’s exclusive legal remedy against its direct employer.

Principal/Statutory Employer Doctrine

This column identifies the state statute or common law obligation that requires certain employers, predominantly contractors, to provide or secure workers’ compensation benefits if an entity with which they subcontracted fails to provide benefits to its injured employees. Each state’s statute has specific nuances and qualifications and the relevant statute should be consulted to determine whether an employer is potentially affected.

Illustrative Example: ABC General Contractor hires XYZ Subcontractor to perform plumbing services for a project.XYZ Subcontractor’s employee is injured while lifting materials and the employee learns that its direct employer, XYZ Subcontractor, failed to procure workers’ compensation insurance and cannot compensate him for his injuries. The principal/statutory employer doctrine requires ABC General Contractor to provide workers’ compensation benefits to XYZ Subcontractor’s employee because ABC General Contractor is considered the employee’s “statutory employer.”

Application of Exclusive Remedy Statute to Principal/Statutory Employers

This column identifies case law applying the exclusive remedy statute to principal/statutory employers and analyzes whether a principal/statutory employer is entitled to the same immunity from civil actions as a direct
employer. States typically adopt one of four approaches:

• 1. Principal/Statutory Employer not entitled to immunity regardless of whether the principal/statutory employer pays for injured employee’s workers’
  compensation benefits.
• 2. Principal/Statutory Employer entitled to immunity only if the principal/statutory employer pays for injured employee’s workers’ compensation benefits.
• 3. Principal/Statutory Employer entitled to immunity regardless of whether the principal/statutory employer pays for injured employee’s workers’ compensation benefits.
• 4. The law is unclear/there is no applicable precedent

Application of Exclusive Remedy Statute to Wrap-Ups

This column identifies available case law applying the exclusive remedy statute to wrap-up insurance schemes (i.e., owner-controlled insurance programs, “OCIPs”, or contractor-controlled insurance programs, “CCIPs”) and analyzes whether an owner (who provides an OCIP) or a contractor (who provides a CCIP) is entitled to the same immunity from civil actions as a direct employer.

Subrogation Waiver Prohibited by Statute

This column identifies states that have expressly prohibited waivers of subrogation in workers’ compensation insurance policies.