Bill to increase permanent disability payments

By CMTA Staff

Capitol Update, May 4, 2007 Share this on FacebookTweet thisEmail this to a friend

Businesses and labor are engaged in a strong debate over the true impact of the 2004 workers’ compensation reforms.  The decline in the number of workers on Permanent Disability (PD) has compelled the Labor community to push legislation that will weaken the reforms.  Last week, Senate Speaker Pro-Tempore, Don Perata (D-Oakland) amended SB 936 to increase PD benefits in California by 2010.  Specifically, this bill revises the formula for computing payments for injuries causing PD.

For the past few years, the Administrative Director, (AD) for the Division of Workers’ Compensation, (DWC) has had the responsibility to develop PD regulations and adjust rates as necessary.  DWC’s number one challenge has been the limited amount of post-reform data that could be used to calculate the PD rating.  The current PD rating has resulted in a decrease in indemnity payments, which the labor community believes is unfair.  SB 936 attempts to preempt any adjustments that would be made to the PD regulations when the AD completes analysis of injured workers’ wage losses.

In order to reach a compromise each side will need to find some common ground. While business wants costs under control, Labor believes that reforms should increase benefits to injured workers.   SB 936 attempts to combine these ideals in its "finds and declares" portion of the bill stating:
"In ensuring adequate benefit levels to permanently disabled workers, it is not the intent of the Legislature to undermine the positive effects workers’ compensation reform has had on California’s employers and workers."

However, SB 936 would double benefit levels, driving costs back up and eroding savings achieved under the reforms.

SB 936 is only one of several bills this year that attempts to roll back the savings that employers achieved in workers’ compensation reform.  Some legislators seem not to recall the extraordinary costs that our businesses were facing; or that prior to the reforms, PD claims were filed at a rate three times the national average (California was 20% higher then the next highest state). CMTA encourages those businesses that have seen savings to share with their legislators the positive impact it has had on their workers, such as higher salaries or additional benefits.  If you are interested in joining CMTA and others opposing SB 936, please send a letter to Senator Perata, State Capitol, Sacramento, CA 95814.  SB 936 will be heard in the Senate Labor and Industrial Relations Committee, Wednesday May 9th. You can see a sample coalition letter on CMTA’s web site:


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