CA Governor Kills Comp Bill, Boost for Employers

Governor Arnold Schwarzenegger 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.

Source: Source: LA Times | Published on October 3, 2008

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