Workers’ comp bills hit dead end
California’s employers got a big boost from a powerful ally, Gov. Arnold Schwarzenegger, when it came to killing bills this year that sought to boost benefits and make other changes in the state’s program for injured workers.
This week the governor vetoed half a dozen bills that could have raised costs in the state workers’ compensation insurance system. The system’s overhaul in 2004 was one of the governor’s biggest achievements.
The most significant of the bills sent to him by the Democratic-controlled Legislature would have doubled benefits paid to victims of on-the-job injuries who became permanently disabled.
Injured workers, their lawyers and labor unions have complained that such benefits have been unfairly cut by about half over the last four years, a figure that is only slightly greater than the Schwarzenegger administration’s estimate of the reduction.
Business lobbyists have consistently fought the Democratic proposals to expand benefits, saying they are too costly for employers.
“The workers’ compensation reforms I enacted in 2004 have worked. Costs to employers have decreased and return-to-work rates for injured workers have increased,” the governor said in his veto message for the bill, SB 1717 by Senate President Don Perata (D-Oakland).
With medical costs rising, Schwarzenegger said he could not justify “a billion-dollar benefit increase” phased in over the next three years.
Instead, Schwarzenegger aides say they are preparing regulations that could raise disability benefits by an average of 16%.
Business groups denounced Perata’s bill as a potential hit on companies that lobbied hard for the 2004 overhaul. The California Chamber of Commerce deemed it a “job killer.”
Schwarzenegger vetoed the bill along with eight of nine others on the chamber’s list of what it considered anti-business measures.
The 2004 workers’ comp law has been a boon for employers. Premiums have dropped 62%, and the frequency of claims by employees is less than one-third of the high recorded in 1991, according to the Workers’ Compensation Insurance Rating Bureau, an industry-backed data collection group.
Perata, who has had similar bills vetoed by the governor in the two previous legislative sessions, said the governor’s proposed benefit hike was too little.
“Those who are permanently injured at work are being grossly shortchanged by the current system,” Perata said. “As California’s cost of living continues to climb, the benefits paid out to the most seriously injured workers have fallen dramatically.”
Schwarzenegger, who this year vetoed a higher percentage of bills sent to him than any governor in at least 40 years, also axed a measure by Sen. Carole Migden (D-San Francisco) that would have made it illegal for insurance companies to reduce disability awards to injured workers based on their gender, race or age.
Some workers had complained that insurers unfairly assumed, without medical evidence, that disability benefits paid to older women should be cut because that segment of the population is more likely to suffer from osteoporosis. Attorneys for injured workers maintained they’ve also had cases in which African American men who developed job-related hypertension had awards cut because of racial profiling.
Schwarzenegger said he supported the intent of Migden’s bill, SB 1115, but called it unnecessary. He said current law already protected injured workers and he argued that Migden’s measure, had it become law, could have created “ambiguities” that could have led to increased lawsuits.
Other vetoed workers’ comp bills included SB 1338, which would have allowed certain workers to pick their own doctors for job-related injures rather than be required to go to company-designated clinics.
The wave of vetoes “was a complete wipeout,” said Angie Wei, a lobbyist for the California Labor Federation.