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| For Immediate Release January 15, 2002 |
Contact: Gino DiCaro |
Oppose Latest Workers’ Compensation Legislation
Proposal too costly, too few reforms, especially with weak economy
Sacramento, CA- - The California Chamber of Commerce, the California Manufacturers & Technology Association, and the California Retailers Association today responded in opposition to SB 1156 (Burton), the latest workers’ compensation legislation.
Chamber President Allan Zaremberg says, “SB 1156 (Burton) is similar to the proposals that the Governor has vetoed three years in a row, but now the economy is much worse. The bill appears to contain the same provisions as last year’s workers’ compensation legislation, which would have cost California employers over $3 billion. The business community cannot continue to be burdened with the kinds of excessive costs called for under this new measure, especially when our economy is much weaker. Once again, this bill does not enact the necessary reforms to revitalize a broken system and off-set the high costs to employers.”
Jack Stewart, President of the California Manufacturers & Technology Association, notes that according to the Workers’ Compensation Insurance Rating Bureau, “Over the past 10 years, the number of workplace injuries has been cut in half - from 3.8 to 1.9 injuries per 100 workers. At the same time, the overall cost of the system has nearly doubled from under $8 billion in 1996 to a projected $15.2 billion by 2003.”
“SB 1156 lacks the serious reform needed to fix a badly broken system,” says Stewart. “California manufacturers are still reeling from last year’s staggering electricity rate increases. SB 1156 is just one more cost that many manufacturers may be unable to absorb and remain competitive.”
“Until the California economy rebounds, the legislature should be finding ways to stimulate the economy and not create new obstacles to economic growth. The timing of this massive mandated cost increase to California employers is ill timed and could slow the state’s economic recovery, extending the current budget shortfall,” states Stewart.
“The retail industry, which is struggling in this poor economy, is one of the largest employers in the states and will be hit particularly hard by these increases,” said Bill Dombrowski, President of the California Retailers Association. “These increases should be balanced with some meaningful reforms that would ensure that workers who are severely injured receive benefits they deserve. Unfortunately, there doesn’t seem to be any desire to fix the system to accomplish this.”
The cost of doing business in California has been rising consistently for years, with more than double-digit increases in energy rates, health care costs and workers’ compensation premiums. According to the Workers’ Compensation Insurance Rating Bureau of California, workers’ compensation premiums have increased 77 percent in the last four years. These skyrocketing premium increases have erased any savings employers gained from the workers’ compensation reforms of 1993, while benefits have remained the same.
While workers’ compensation premiums have continued to rise, the number of claims has continued to decrease. These organizations believe this is an indication that before any benefit increase can be implemented, the system needs to be streamlined and reformed.
“We all support increasing benefits to severely injured workers,” Allan Zaremberg continues, “but reforms need to be made to the system to ensure that the money businesses pour into the system actually get to those who need and deserve it. This bill does not accomplish that.”
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