Workers' Comp Clean-up Bill Passes First Committee

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

Capitol Update, Feb. 27, 2004 Share this on FacebookTweet thisEmail this to a friend

The Senate Labor and Industrial Relations Committee passed SBx4 9 (Richard Alarcon, D-Sun Valley) February 25th on a 4-2 vote. The bill is supposed to provide non-controversial technical and clarifying language to SB 228 (Alarcon) and AB 227 (Juan Vargas, D-San Diego), the principle workers’ compensation bills signed into law last year.

SBx4 9 clarifies that the duties of the medical director (now appointed by the Administrative Director, Division Workers’ Compensation) are also transferred to the DWC. Provisions that were accidentally deleted relating to vocational rehabilitation benefits for injuries prior to January 1, 2004 would be re-enacted with a sunset date of January 1, 2009 to provide benefits for eligible workers. The bill also clarifies that the Workers’ Compensation Appeals Board is authorized to receive as evidence the medical treatment guidelines adopted by the administrative director. This is an important step in resolving medical treatment disputes. The new Injury and Illness Prevention Program requirements are clarified to only apply to employers with workers’ compensation experience modification rates of 2.0 or greater and that program reviews by insurers may be done by in-house personnel.

Not a part of the clean-up process, but included in the bill, is the restoration of 100% employer funding (about $102 million) of the workers’ compensation program that was inadvertently chaptered out by a subsequent budget bill. Currently, the Department of Industrial Relations does not have the authority to collect assessments to support the workers’ compensation program. Without this funding, the General Fund would have to make up for the unbudgeted amount, adding to the already large deficit. So far, the administration has not expressed a position.

SBx4 9 is an urgency bill that requires a favorable two-thirds vote of both houses, and if signed by the Governor, would take effect immediately. It is important that the bill be non-controversial in order to garner the requisite number of votes to pass.

The committee also heard three bills by Senator Ross Johnson, R-Irvine that were not voted on by the committee:

SBx4 4 would change “where the injury is proximately caused by the employment” standard to “where the employment is the predominant cause of the injury, compared to all other causes combined.” This is a much higher standard for eligibility and it would eliminate a significant number of claims.

SBx4 5 would change the evidence requirement for the compensability of psychiatric injury from "a preponderance of the evidence" to "clear and convincing". It would also require proof for post termination psychiatric injury by "clear and convincing" evidence for a psychiatric injury occurring prior to notice of termination or subsequent layoff, also reducing the number of claims.

SBx4 6 would allow employers to use workers’ compensation costs in the calculation of profits for purposes of an employee bonus program. This would overturn an appellate court ruling.

In recent years, whenever a major overhaul of the workers’ compensation program is being seriously considered by the Legislature, all other workers’ compensation bills are put on hold. This year is no different, and the bills are unlikely to move without leadership approval.
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