Workers’ Comp Changes Targeted

Three ballot proposals that could cost employers billions of dollars by undoing large portions of Gov. Arnold Schwarzenegger’s signature overhaul of the state workers’ compensation system have been cleared for signature gathering.

The measures propose to hike benefits paid to permanently disabled workers and even allow them to sue their employers in state court over on-the-job injuries. The latter change would undo a key feature of California’s first workers’ compensation law. Under that 1913 statute, injured workers traded the right to sue for the promise that they would receive medical care and disability benefits.

Exactly who is bankrolling the proposals is unclear. The qualifying documents submitted to state election officials were signed by a Woodland Hills court reporter and a San Leandro attorney.

The lawyer, Margaret Prinzing, said she was “not authorized” to name any of the measure’s backers other than the court reporter, Danielle L. Viohl, who did not divulge her contact information in the official filings and couldn’t be reached for comment.

Employers consider the proposals a threat to the savings they have seen over the last two years through lower insurance premiums. A coalition led by the California Chamber of Commerce, a small-business advocate and an executive of Costco Wholesale Corp. already is mounting an opposition campaign.

“We want to be on top of this right from the get-go,” said Joel Fox, who heads the Small Business Action Committee.

Fox said he expected the measures’ backers to do private polling to see which of the three slightly different proposals would resonate with voters and have the best chance of qualifying for the November ballot.

Meanwhile, Democratic lawmakers, labor leaders and attorneys for injured workers said they weren’t behind the proposals. Nevertheless, they suggested that the threat of a ballot measure could play a role in negotiations with Schwarzenegger over how to fine-tune the workers’ comp overhaul the governor signed in April 2004.

“This will be a pressure point,” said Steven Maviglio, a spokesman for Assembly Speaker Fabian Nunez (D-Los Angeles). “It’s a cloud on the horizon.”

Democrats want the administration to rewrite regulations that determine payments to permanently disabled workers. The new rules, an outgrowth of the 2004 law, have reduced permanent-disability benefits by as much as 50%, according to a state-sponsored study.

“Our position is that the governor made a promise not to hurt any workers who are permanently disabled,” Maviglio said. “He repeatedly promised to revisit the issue as the data comes in.”

The governor would consider refining permanent disability benefits should “valid statistical evidence show a need,” Schwarzenegger spokesman Vince Sollitto said. But he would “vigorously defend the [workers’ compensation] reforms from rollbacks” that could imperil the $8.1 billion that employers have saved from the overhaul, Sollitto said.

A workers’ comp initiative, if it qualifies for the ballot and is approved by voters, could prove expensive to businesses, governments and nonprofit organizations, depending on which version passed, according to the state legislative analyst’s office, which reviews all ballot proposals.

“The magnitude of these increased costs would be major -- potentially in the billions of dollars annually for private and public employers,” the office said.

Besides raising weekly payments for permanently disabled workers, the measures would strike provisions of the 2004 law that require injured workers to go to medical clinics and pharmacies chosen by their employers.

One proposal would turn the clock back by almost a century in allowing injured workers to sue their employers for damages caused by accidents.

Passage of any of the proposals could “send our economy into a tailspin,” warned California Chamber of Commerce President Allan Zaremberg.

It typically costs about $1 million to $2 million to gather the 600,000 signatures needed to get a measure on the ballot. The identity of who is bankrolling the workers’ comp proposals will become known when they file the required financial disclosure forms, which could happen as soon as large contributions are made.

In the meantime, the proponents’ secretiveness could backfire, said Shaun Bowler, a UC Riverside political science professor who specializes in initiatives.

“It’s unusual to be so secret so early,” he said. “What are they trying to hide?”