In Texas, for instance, Walmart has written a plan that allows the company to select the arbitration company that hears claims disputes. In Oklahoma, Dillard's requires workers to report injuries before the end of their shift to be eligible for workers' comp.
Similarly, the Center for Justice & Democracy at New York Law School also noted the enormous discretion employers enjoy under opt-out plans: An employer can decide whether a worker qualifies for any benefits. It can refuse to approve any treatment. It can completely deny compensation for certain kinds of disability.
"Depending on the law, an employee may retain the right to sue an employer for negligence. However, as a condition of employment, the employer can force the employee to sign a contract so all cases are resolved through an employer-designed, secret arbitration system rather than in court," the center notes.
Opt-out legislation introduced in late spring in South Carolina may be instructive. For one, the bill makes it clear its intention is to set up a separate, independent workers' compensation system that would have little to do with the system in place. A employer who opts out would have considerable discretion in setting up a benefits program, and House bill 4197 specifies "except as otherwise expressly provided, an administrative agency of this state may not promulgate rules or procedures related to design, documentation, implementation, administration, or funding of a qualified employer's benefit plan."
Also, "this act must be strictly construed. A conflict between this act and another law must be resolved in favor of the operation of this act." In addition, an employer may choose when to opt-out of the workers' compensation system and when to opt in, and in any event the insurance department "shall provide the employer a reasonable time after the withdrawal or denial to secure workers' compensation insurance coverage."
The bill does not address how employees would be protected if they are injured during the period their employer is without comp coverage or in between the two systems. Indeed, it may well be practically every substantive element of the new system would have to be litigated before it is clear how its provisions and regulations would apply to workplace injuries.