State agency amasses $2.3 billion as lost-wage payouts fall to $40 million
Only two lawyers in North Dakota still represent injured workers in the state’s workers’ compensation system, and neither expects to remain in the practice for long. Dan Phillips, 67, hopes to retire in three years, and Dean Haas, 68, has already cut his practice to part-time. “So pretty soon, there will be zero attorneys in North Dakota doing workers’ comp,” Phillips said.
State laws that cut payouts and benefits have driven lawyers out of the field, according to lawyers and worker advocates. New attorneys are not entering workers’ compensation partly because the laws added challenges to winning cases, and lawyers say the awards are not big enough to pay for their time and expenses. Attorneys are paid only when the worker wins, and the agency sets the rates, including a $7,455 cap for a successful administrative hearing.
The shortage has direct consequences for access to representation. Phillips said he receives more than 25 calls each week from workers who want to appeal denials from Workforce Safety and Insurance; he gives advice to as many as he can, he said, but takes about one case for every six calls. Requests for hearings by injured workers and employers fell to 108 in 2025, down from 304 a decade earlier. There are no national statistics on the number of workers’ compensation lawyers, but Alaska and other states have faced shortages, and New Mexico last year increased caps on attorney fees to make it easier for workers to find representation.
Workers’ compensation covers medical costs and lost wages for employees hurt on the job. In exchange for that financial relief, injured employees give up their right to sue, a trade-off that became known as the “grand bargain” in the early part of the 20th century. State systems began teetering in the 1990s after they expanded benefits and medical costs ballooned, and insurers threatened to pull out. In North Dakota, Workforce Safety and Insurance — a public agency that provides and administers the benefits — ran up a $240 million deficit. To shore up its finances, it pulled back on benefits, tightened eligibility standards, and the state rolled back some incentives for lawyers.
The agency says the changes over the past few decades helped it recover from the deficit and build a $1.2 billion surplus, and it now routinely issues refunds to employers. Employers pay the lowest workers’ compensation premiums in the nation — $0.50 per $100 of payroll, according to index rates from the Oregon Department of Consumer and Business Services across 50 industry classes weighted by the characteristics of Oregon’s economy. Hawaii has the highest premiums, at $2.52 per $100 of payroll.
Supporters of the state-law changes, including restricted eligibility for some benefits, say they rescued workers’ compensation systems from the insolvency crisis of the 1990s. Some say business-friendly legislatures have left workers unable to get financial relief for accidents beyond minor, inexpensive injuries such as sprains and lacerations.
The amounts WSI pays out have been on a long-term slide. It paid $40 million for lost wages last year, down from $79.4 million in 2016, and its outlays for medical benefits also fell during the period. The agency paid about $500 less, on average, for active claims in 2025 — roughly $4,100, compared with $4,600 in 2016. WSI Director Art Thompson said the lower average is partly because injuries were more severe a decade ago during North Dakota’s oil boom. The agency amassed $2.3 billion in assets by the end of fiscal 2025 and has returned around $1.8 billion to North Dakota-based businesses over the past 20 years.
WSI says it approves 90% of initial claims, and its customer-satisfaction score from workers is 4.22 on a scale of 5. Workers unhappy with a decision can request a review from an independent office inside WSI, which leads to reversals or settlements in about 10% of the cases brought to it. Thompson said the number of claims has been on a long-term decline even as the workforce grows, reflecting safer workplaces overall. “In my opinion, the system is working as well as it’s ever been designed to work,” he said.
Workers and their lawyers describe a different experience. They say the state rejects many claims for treatments after accepting an initial claim, and few workers appeal denials because they cannot find legal help, said Jaclyn Hall, executive director of the North Dakota Association for Justice, which represents trial lawyers. Thompson said the requests fell because state law made clearer which benefits workers are entitled to; workers and their advocates say many workers give up in frustration.
Jesse Jerger, a concrete worker in Fargo, said both lawyers he spoke to turned him down after WSI denied some of his claims stemming from a 2023 fall off a wall that fractured his elbow and caused permanent nerve damage. One said he was too busy to take the case. “I just gave up,” said Jerger, 50. “I cashed out a life insurance policy, and I drained what we had in savings to catch up on bills.”
Oak Reile was delivering a pallet of washer fluid, cigarettes and candy to a convenience store in 2020 when he slipped and fell, breaking two vertebrae and paralyzing him from the armpits down. After months of hospitalization and rehab, he slid into a deep depression; sometimes he told his wife, Kirsten, “You should’ve just let me die,” she said. He started seeing a therapist, but the agency denied the claim, arguing depression was not a physiological effect of his injury. Reile said he battled WSI for six months to get a $150 cushion for his wheelchair, and in 2023 he and his wife challenged the agency’s refusal to cover his twice-monthly psychotherapy appointments, which cost around $250 each. Phillips took the case through an initial administrative hearing, a district court case and an appeal to the North Dakota Supreme Court — and won. Several days later, at WSI’s request, a state senator added an amendment to legislation that would close the door on future claims seeking coverage for the psychological effects of a work injury; the legislature passed the bill last year. Phillips said he earned $14,595 in fees on the case, about half the total value of his time.
North Dakota’s part-time legislature must approve changes to the workers’ compensation statute, and many state lawmakers are business owners who regulate WSI while also paying premiums to it. Rep. Dan Ruby of Minot, a state representative for 25 years who runs a sanitation company, said he paid premiums of around $100,000 annually in the early 2010s to cover 25 or so workers, including himself. Last year, he estimated, he paid a little over $10,000 with twice as many employees, thanks to declining rates, dividends from the fund’s surplus and discounts for two safety programs. Ruby said North Dakota exceeds the national standard on some benefits, such as supplementing Social Security checks for workers whose injuries prevent them from contributing payroll taxes to that system. “You don’t want people to get hurt,” he said. “But once they do, of course, we want to see them be taken care of.”
Chris Godfrey, who was the commissioner of Iowa’s workers’ compensation system from 2006 to 2014 before moving to the U.S. Labor Department, where he oversaw the workers’ comp program for federal employees, said: “It’s a huge impact to the injured workers that have to live with the results of the injury on their body.”