Employer Liabilities and Issues in the United States

Although both of these systems were created to ultimately protect employees, the Worker’s Compensation Laws in the United States differ dramatically from regulations in the United Kingdom under the Employment Liability Insurance Act. In the U.K., the law requires employers to carry a five million pound policy of liability insurance to protect labourers. The compensation laws in the U.S. are quite complex, and are regulated by national laws and by individual state laws, which are not always in accord. Most business in America offer a form of coverage for staff, but it is often not required, especially in the realm of small businesses. When a party is injured or suffers from work related stressors, there is no defined limit of compensation that may be sought, and no universally followed regulations. This often causes upheaval and confusion in their system, as the laws tend to be loosely interpreted and have a propensity to favour employees over business entities.

One of the primary pitfalls of the American system is that it has become more common for large groups of people to be brought together law firms to file one large claim, known as a Class Action Lawsuit. The lawyers that mediate and prepare these cases, typically profit six figure amounts that have been know to escalate into the millions. If an award is made to the claimants, legal fees may take as much as forty percent of the court-ordered settlement, and lawyers tend to profit more than the victims that filed the suit.

The United States employs one of the most diverse workplace forces in the world, but this does not mean that all employees feel justly treated in regards to race, religion, gender, and so forth. Age discrimination and wrongful termination, are also common complaints that are used as a basis to file claims against employers in a court of law, and the Equal Employment Opportunity Commission receives numerous complaints annually.

Discrimination is not uncommon in the U.S., but the laws in these cases are quite clearly on the side of the complainants with a justifiable argument. Commonly, disgruntled employees see an opportunity to make a quick profit when such class action lawsuits are brought against their employer, and the practise of other labourers, ‘jumping on the bandwagon’, makes these cases extremely costly. Litigation and procedures of discovery, combined with the large amount of victims participating in one claim, can cause these proceeding to last for months and even years. The lack of concise laws and lack a streamlined process for handling cases has cost the citizens and industries of the U.S. billions of dollars annually, and many experts consider this system to be in dire jeopardy.

Fortunately, for the citizens in the United Kingdom, such class action legal suits are not a part of their system. The requirement for all businesses to protect their employees by carrying liability insurance to protect workers provides a sense of security for all parties involved. The existing system in the U.K. has proven itself to be effective in keeping legal costs down by: mandating coverage, placing award limits on claims, and avoiding the use of class action lawsuits, which helps keep the system stable.