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Issues and Positions
Workers
Compensation
Chamber-Opposed Workers' Compensation Proposal Signed Into Law
Legislation increasing
workers' compensation benefits but lacking sufficient
reforms to offset employer costs was signed by the Governor on Friday
at a
press conference in Los Angeles.
California Chamber-opposed
AB 749 (Calderon) increases workers' compensation
system costs by $3.5 billion without making meaningful structural or
systemic changes that would offset costs to employers.
“The California
Chamber is disappointed that AB 749 has become law,” states
Allan Zaremberg, president, California Chamber. “This legislation
is too
costly for California businesses, and only adds to the heavy financial
burdens that employers already face.”
The Chamber believes
that the cost savings from reforms in AB 749 are
speculative and uncertain, and are not enough to alleviate substantial
premium increases for California employers. Businesses already have
experienced a 77 percent increase in workers' compensation premiums since
1998.
The Workers' Compensation
Insurance Rating Bureau estimates that total
system costs for workers' compensation without the benefit increases in
AB
749 will exceed $154 billion by 2003.
The Chamber has consistently
supported increased benefits to severely
injured workers, as long as they were coupled with significant cost-saving
reforms. While this law may be better than past proposals, the Chamber
believes AB 749 does not address the system inefficiencies that mean
employers still will be paying some of the highest workers' compensation
premiums in the nation even though the level of benefits for injured workers
will rise from 49th in the nation to 45th. The Chamber believes that there
are many more reforms in the workers' compensation system that will need
to
be addressed by the Legislature.
“Because of the
high costs of AB 749, California employers will have to make
a difficult and unfortunate decision -- either pass on the higher costs
to
consumers, or cut jobs and leave people out of work,” states Zaremberg.
(Information provided by California Chamber at www.calchamber.com)
Summary:
The current Workers'
Compensation legislation (SB 1156 - Burton) could be dropped and replaced
with a new bill (AB 749 - Calderon). The California Chamber sent out
an action alert e-mail earlier this week asking businesses to write
their legislator opposing SB 1156. Due to this new information, businesses
may wish to hold off writing in opposition to SB 1156 and wait for further
information on the new workers' compensation bill, AB 749.
The El Segundo Chamber
published the following letter opposing SB71 and urged all members to
contact the Governor and oppose it. The Governor vetoed this bill. A
workers compensation sub-committee of the Government Affairs Committee
is continuing to monitor this legislation.
September 10, 2001
The Honorable Gray
Davis
Governor of California
State Capitol
Sacramento, CA 95814
Fax: (916) 445-4633
Re: Workers
Compensation - Senate Bill 71 (Burton)
Dear Governor Davis:
The El Segundo Chamber
of Commerce recognizes that reform is necessary to workers compensation.
Unfortunately, it appears SB71 (Burton) will increase employer premiums
without offering any substantial reform to the system. As a result,
we urge you to VETO SB71 (Burton).
El Segundo is comprised
of over 2,000 businesses. While we count more Fortune 500 businesses
than any city in California except for San Francisco, El Segundo also
includes a large number of small businesses.
Many businesses
have already seen their workers compensation premiums increase by 25%
to 50%, while workers compensation fraud has also dramatically increased.
In fact, the Workers’ Compensation Insurance Bureau (WCIRB) issued
preliminary estimates that SB71 would increase benefit costs by 26.9%
or $3.6 billion dollars by 2006.
We need a workers
compensation system with increased efficiencies achieved by reducing
costs of administering benefits while increasing benefits to those who
need it. Reform that does not penalize businesses, yet offers relief
to severely injured employees, would include:
Your help is needed.
Please VETO SB71 and encourage true reform to workers compensation.
Sincerely,
Liz West
President
El Segundo Chamber of Commerce
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