Legislators Reject Wilson’s Demand on Workers’ Comp : Capitol: Lawmakers meeting in special session turn down call for immediate passage of his reform measure.

Besieged by workers and employers, the Legislature opened a highly politicized special session Thursday and quickly rejected Gov. Pete Wilson’s demand for immediate passage of his overhaul of the troubled workers’ compensation system.

Leaders of the Democratic majority said they also want the costly and inefficient $12-billion program overhauled but would not promise action before the Nov. 3 election.

In a demonstration of support for the Republican governor’s version of reforming workers’ compensation, about 200 business executives rallied on the west steps of the Capitol. Inside, a few hundred union members and their supporters marched through the hallways in opposition to Wilson. Later, Democrats and organized labor sponsored a larger rally than Wilson’s on the Capitol’s north steps.

At one point during the Wilson rally, the executives, many in suits and ties, knelt on the concrete sidewalk as an organizer shouted, “The Legislature has brought California business to its knees!”

The usually staid Wilson bounded to the rally platform as loudspeakers blared the rock song “Working for a Living.” Surveying the business owners, Wilson told them, “A handful of doctors and lawyers are making a very rich living out of a system that is inflicting upon the rest of us high premiums, low benefits and the threat that today’s job is going to be gone tomorrow.”

Last month, the GOP governor vetoed Democratic bills aimed at curbing the spiraling costs of the workers’ compensation system. Wilson said they fell short of reform, which he has identified as saving employers $1 billion in their insurance premiums.

In a move that he said was meant to apply a heavy dose of pre-election pressure on Democrats, Wilson called the special session to enact his plan. He said the form of the laws he wanted would be virtually non-negotiable.

Democrats defended their vetoed plan as offering $1 billion in savings. They denounced the special session as a phony attempt by Wilson at reform while trying at the polls to replace majority Assembly Democrats with Republicans.

In what almost everyone agrees is a program begging for reform, California employers pay among the highest insurance premiums in the nation to compensate injured employees. The injured workers, however, receive among the lowest benefits.

Those in the middle--lawyers, forensic doctors, rehabilitation counselors, insurance companies and others--are blamed for driving up costs and cutting deeply into worker benefits and employer profits.

In advance of the special session, Wilson had warned that he would consider assignment of his bill to legislative committees as tantamount to death of the proposal. On Thursday, Democratic leaders sent the measure to committee for consideration, a normal procedure.

Likewise, a handful of rival Democratic-sponsored bills were assigned to the same committees, which started hearing the competing proposals amid inklings that Democrats were preparing to approve their own versions of reform.

“We are serious. We want to produce a bill,” said Senate President Pro Tem David A. Roberti of Van Nuys. “We want to make sure the workers share in the benefits as well as the business owners.”

Assembly Speaker Willie Brown (D-San Francisco) said he, too, hoped the process would produce a bill acceptable to all parties, including Wilson.

“I don’t want a bill to just come out of there just to get past the immediate political heat,” Brown said. “I want a bill to come out of there that can be signed into law.”

However, Brown said that Wilson was “totally focused on the world of politics” and said he advised Wilson privately that for reform to occur the governor’s bill “can’t be a take-it-or-leave-it arrangement.”

The governor’s bill, similar to an unsuccessful GOP bill he supported last summer, would seek to squeeze out of the system certain elements that drive costs up.

For example, he would require that a “sudden and extraordinary” employment event be the predominant cause of a compensable stress injury. (Police would be exempt.) Currently, stress can be compensable if it accounts for at least 10% of the employee’s claim for psychiatric injury.

Likewise, the bill would require that work be the “predominant” cause of an injury--such as the repetitive stress injuries common to some who use computer terminals--before benefits were paid. Currently, benefits can be paid on claims for cumulative injury and occupational diseases resulting from long-term stresses and strains that may be a combination of causes on and off the job.