Workers’ Compensation Showdown Averted

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 13, 2004 Share this on FacebookTweet thisEmail this to a friend

Following a meeting of the Governor, majority and minority party leaders of both houses (the big five) on February 10th, a showdown on the administration's sponsored workers’ compensation bill, ABx4 1 (Abel Maldonado, R-Santa Maria), set to be voted on the next day in Assembly Insurance Committee was avoided.

The looming March 1st deadline set by the governor for the legislature to pass major workers’ compensation reforms probably prompted the big five meeting. It is highly unlikely that the legislature will pass ABx4 1 or any other major reform legislation by March 1st.

Some agreement was reached by the big five to allow more time for discussions on the major reforms in the bill. However, the real significance of the meeting was that it was the first time that the big five met specifically to discuss workers’ compensation reform. This may signal that significant debate has begun on the issue from senior leadership.

At the hearing Committee Chair Juan Vargas (D-San Diego) indicated that while the bill was originally scheduled to be voted on, the hearing would be changed to "informational only" at the request of the author and no vote would be taken. The abrupt change was a big surprise to the overflow crowd.

Nevertheless, the committee heard compelling testimony from numerous employers on how spiraling workers’ comp. costs continue to negatively impact their ability to be competitive and stay in business. Various employers provided personal testimony, statistical data and related examples of how their workers’ compensation insurance costs have risen over 300 percent in some cases. In other instances employers were forced to lay off critical staff, pass on health insurance costs to employees and put off salary increases in order to cope with rising workers’ compensation costs.

According to both policy committee chairs, no major workers’ compensation reform bill is likely to be passed before March 31st. Proponents of the workers’ compensation initiative have indicated that they will start gathering signatures on March 1st if no reform bill has reached the Governor. Thereafter, the question will be whether the bill is sufficient to gain the Governor's signature or whether he supports a November initiative? This then becomes the next showdown.
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