Worker's compensation (Germany)
Worker's compensation in Germany is a national, compulsory program that insures workers for injuries or illness incurred through their employment, or the commute to or from their employment. Wage earners, apprentices, family helpers and students including children in kindergarten are covered by this program. Almost all self-employed persons can voluntarily become insured. The German worker's compensation laws were the first of their kind.
History of workers compensation law in Germany
The Sickness Bill became law in 1883 and the Accident Bill in 1884. Otto Von Bismarck, Chancellor of the German Empire, introduced the programs to assist workers in the event of accidental injury, illness or old age. This initial system was financed by workers and employers.
The Sickness Insurance law paid indemnity for up to 13 weeks. The first 4 weeks were at 50% of prior wages, from the fifth week on the benefit was 66.7% of previous earnings. Workers who were completely disabled received benefits at 67% after the 13 week, financed entirely by employers. If the disabled person required constant care, then up to 100% of previous wages were awarded.
The German compensation system was used as a model for many other nation's worker's compensation programs.
The modern compensation system in Germany
Today, in Germany, every worker is a member of a related Workers Compensation Institute (Berufsgenossenschaft) and almost all self-employed persons can voluntarily become insured members of an institute as well. The institutes have an approximately 90% return-to-work rate, using vocational retraining and upgraded vocational qualifications as key strategies.
All accidents in the workplace - or in the commute to and from it - are covered. 67 diseases are considered occupational diseases and are also covered by the program.
The workers' compensation program is funded by employers (except for the government's coverage for students and children and a government subsidy to the Agricultural Accident Fund). The average employer contribution (1996) was 1.42% of payroll.
An injured worker has a right to appeal to the committee of their Institute. The next level of appeal after this committee is to a Sozialgericht court. The institute must cover the costs of the appeal process, so there are no costs to the worker.
Disability benefits are paid as a weekly "wage loss” compensation. Workers unable to perform their current job due to injury or illness receive periodic payments of 80% of their prior gross earnings until returning to work (up to a maximum total payment). If rehabilitation is prognosticated to be impossible the worker receives the benefit for 78 weeks.
Wages are paid for six weeks by the employer before the employee goes onto short-term disability benefits.
Workers who have a loss of earning capacity due to work injury or occupational disease of 20% or more receive a pension equal to 66.7% of their previous year's earnings, up to the specified maximum. This is paid until the age of 65, unless he or she begins receiving old-age pension earlier than age 65.
Medical care benefits are comprehensive, with the total cost of physical rehabilitation and appliances being covered. Institutes provide all medical care benefits. The Institutes control the choice of doctor and hospital.
- http://www.qp.gov.bc.ca/rcwc/research/perrin-thorau-germany.pdf, Government of British Columbia, Comparative Review of Workers’ Compensation Systems in Select Jurisdictions, Germany, Retrieved September 8, 2010.
- http://www.awcbc.org/en/historyofworkerscompensation.asp, Association of Workers Compensation Boards of Canada, History of Worker's Compensation, Retrieved, September 8, 2010.