social-welfare program through which employers bear some of the cost of their employees' work-related injuries and occupational diseases. Workers' compensation was first introduced in Germany in 1884, and by the middle of the 20th century most countries in the world had some kind of workers' compensation or employment injuries legislation. Some systems take the form of compulsory social insurance; in others the employer is legally required to provide certain benefits, but insurance is voluntary. Employment injury benefits are financed by employers in most countries.

In common-law (common law) countries such legislation is based upon a doctrine of strict liability, or liability without fault. This is a departure from the principle of tort law, in which the injured party receives no damages unless it can be shown that someone else maliciously or negligently caused the damage. The rationale for the “social fault doctrine” is that, under conditions of modern industrial employment, employers are in the best position to prevent accidents and disease and should therefore be given economic incentive to take preventive action.

Because the older common law made it difficult for a worker to obtain compensation from an employer, there was a movement in the latter part of the 19th century in Great Britain and the United States to modify, by court decisions and by employer liability statutes, the common-law defenses of the employer and to specify, through safety codes, the employer's particular duties to provide safe working conditions. The system of workers' compensation gradually displaced the safety codes.