Workers’ compensation laws are changing in parts of the Midwest and Southern regions of the country and could also be amended in California.
Lobbying groups such as the Association for Responsible Alternatives to Workers’ Compensation, which is made up of companies such as Nordstrom, Safeway, Lowe’s and several insurance companies, are working together to change workers' compensation laws in all 50 states to make it harder for people who are hurt on the job to receive lost wages and paid medical costs.
ARAWC has already been successful in helping change workers' compensation laws in Oklahoma, Tennessee and Texas. Now these states allow private employers to opt out of the traditional workers' compensation plans and to write their own rules governing when, for how long, and for which reasons an injured employee can access medical benefits and wages.
In Texas, Walmart (NYSE: WMT) has written a plan that allows the company to select the physician an employee sees and the arbitration company that hears disputes.
But how realistic are changes like these to California’s workers’ compensation rules? Could lobbying groups such as the ARAWC change the Golden State’s workers’ comp laws to favor employers more than employees?
Daniel Eaton is an employment law instructor at San Diego State University and an employment lawyer at Seltzer Caplan McMahon Vitek. He said it is hard to change worker compensation laws in California since they seem to favor employees over employers.
“I’m skeptical about other reforms from other states working and being approved in the Golden State,” Easton said. “California legislators tend to favor legislation that benefits employees.”
Evie Jeang, managing partner at Ideal Legal Group, said she does see and hear of lawyers and lobbyists trying to change workers’ compensation laws, especially when a new politician goes into the state assembly and/or senate.
“It’s still tough, since laws like California workers’ comp tend to favor employees rather than employers,” she said.
In 2012, Gov. Jerry Brown signed into law Senate Bill 863. The bill made wide-ranging changes to California’s workers’ compensation system, including increased benefits to injured workers and cost-saving efficiencies.
Both the minimum and maximum weekly benefit amounts have been increased, with the increases being phased in over a two- year period. At the end of those two years, the maximum weekly permanent disability rate will rise to $290.
Another significant change is in how medical treatment disputes are now resolved. An independent medical review board is now used to decide disputes regarding medical treatment in workers’ compensation cases.
Also, SB 863 creates an independent bill review process to resolve disputes regarding the amount to be paid to doctors.
Jeang did say that it is “still pretty easy for employees to put a workers’ comp claim in” and that the law probably should be adjusted so the power doesn’t sway so heavily in the employees’ side.
“The cost of medical treatment is constantly going up,” she said. “Doctors want to get paid up front. Stress claims are more popular now.”
Eaton said a constant complaint from employers is that the rates they pay to their workers’ comp insurance is too expensive.
“The rate depends on the number of claims,” he said, adding that workers’ compensation claims rise every year.
Eaton said one of the most challenging parts of workers’ compensation cases is that there is so much gray area.
“There was a case where a private company had a holiday party outside of work, but prohibited alcohol at the party,” he said. “One man drove home, who had been drinking, and got home safe. He later had to pick up a co-worker to take them home. An accident occurred and initially the courts said the employer was not liable for damages, lost wages and medical costs. But a court of appeals said the accident occurred on company time and the employer was liable for all lost wages and medical cost.”
Workers' compensation is the nation's oldest social insurance program. It was adopted in most states, including California, from 1910 to 1920.
The workers' compensation system is based on a trade-off between employers and employees. Employees are entitled to receive prompt, effective medical treatment for on-the-job injuries or illnesses no matter who is at fault, and in return are prevented from suing employers over those injuries.
As a result, California employers are required by law to have workers' compensation insurance, even if they have only one employee. The only exception is the roofing industry: A roofer who does not have any employees is still required to carry workers' compensation insurance.
It is a finable offense for California employers not to have workers’ comp insurance.