|'Final Act' Yet to Be Scripted|
By John Millrany - March 23, 2001
Like a multi-act morality play that has yet to script in the final curtain, a contest between workers’ rights and how-much-is-this-gonna-cost-us? continues to unfold at a theater (be it a workplace or insurance broker’s office) near you.
Two major themes are WC benefits and rules governing workers’ safety.
There is, of course, a curious irony regarding California’s risky WC market. According to the Department of Insurance, recent increases in WC insurance premiums have "placed a burden upon brokers and employers. The department has received numerous calls from consumers who are concerned about (increases in premiums)."
The department cites four main causes of the quandary:
Paramount among the causes of increased WC costs are sharp increases in medical costs.
Due to intense competition among insurers, WC insurance prices were driven down below cost, to the point where some insurers could not afford to offer those prices. As a result, some companies withdrew from California or restricted the writing of policies.
On March 3, 2000, Superior National, the state’s largest private WC insurer, went insolvent and began to liquidate. Fremont Compensation, next largest in line, is now under the effective supervision of the Department of Insurance because of its fragile financial condition. In both situations, the writers’ problems stemmed, in large part, from changing rates that were inadequate to cover their losses and other costs.
On Oct. 23 last year, Insurance Commissioner Harry Low approved an increase of 10.1% in the advisory pure premium rate that was recommended by the WC Insurance Rating Bureau in an attempt to prevent more insolvencies. The pure premium rate is the rate of premiums required to balance loss costs and loss expenses of the industry. Significant downward deviation from the pure premium rate may hurt the solvency of the WC industry. The system of open rating that began in California in 1995 does not give the Insurance Commissioner the authority to set rates for WC, but it does give the commissioner the responsibility to provide the insurance industry with the information it needs to set competitive rates in the market.
"The goal of the Department of Insurance is to protect consumers and ensure that insurance companies are able to pay future claims…and is exploring all options to stabilize the workers’ compensation insurance industry. In the meantime," the department admonishes, "employers should shop around—there are still some competitive rates in the market."
On the workers’ safety front, the latest flap concerning rules on ergonomics has the new US Congress at loggerheads, with the House and Senate on a virtually party-line vote passing a bill to rescind regs to stiffen ergonomics restrictions (set in place during the last days of the Clinton administration). President Bush is expected to sign the bill.
Musculoskeletal disorders tend to be the most incapacitating injuries associated with ergonomics; the Bureau of Labor Statistics estimates that 1.8 million such disorders as carpal tunnel syndrome, tendonitis and back strain were reported in 2000 (although the numbers are presumably much higher since they are basically gleaned from work-log samples).
All of the fuss has prompted the California Labor Federation AFL/CIO to punch up its 2001 legislative agenda and make the following statement:
"California’s technology and service sector industries have created a new economy—one that is leaving too many workers behind."
The federation lists what it deems essential to "investing in California’s workers":
"Unemployment Insurance (SB 40 - Alacron): Our unemployment benefits rank last in the nation. Our maximum weekly benefit of $230 replaces only 24% of lost earnings. This bill would increase the maximum benefit to $380 per week over a 3-year period, index the benefit level, and create a movable base period to help support contingent workers. The program must be adjusted to better reflect the needs of new employment patterns.
"Workers’ Compensation (SB 71 – Burton): Workplace injuries harm 800,000 California workers every year—that’s one worker in 20. There are more than 150,000 claims every year for temporary disabilities, and 130,000 for permanent disabilities. For most permanently injured workers, the maximum weekly benefit has been frozen for 18 years. This bill would increase benefit levels for both temporarily and permanently disabled workers.
"Misclassification of Workers. In 1999-2000, the Employment Development Department found that almost 65,000 employees were misclassified as independent contractors. None of these workers would be eligible for unemployment insurance, workers’ compensation, or other employment-related benefits. This bill would tighten the standards for employee misclassification in determining eligibility for job-related benefits.
"Fight Preservation of Social Security (Resolution to be introduced). Anti-worker interests are undermining confidence in Social Security in order to replace it with privatized investment accounts. This resolution will declare the Legislature’s opposition to the privatization of the Social Security program.
"Increased State Labor Funding to Enforce Labor Laws (Budget Item): Our hard-won labor laws cannot protect workers’ rights and safety unless they are vigorously enforced by state agencies. While the number of workers has tripled since 1960, funding for labor law enforcement has not kept pace, allowing repeated violations by scofflaw employers. This budget item will increase funding for the Department of Industrial Relations to better enforce labor laws.
"Creation of State Labor Agency (SB 25 – Alacron). California is the only state without a cabinet-level Labor Agency modeled after the federal agency. Currently. There is little or no policy coordination between the state agencies and departments that deal with labor relations and workplace issues. This bill would create a cabinet-level Labor Agency, consisting of the Departments of Industrial Relations, Fair Employment and Housing, Employment Development of the Agricultural Labor Relations Board, and the Public Employment Relations Board.
"Clarifying Representation of the CalOSHA Standards and CalOSHA Appeals Boards (AB 123 – Escutia). These boards establish and protect workplace health and safety standards. Their seven members, designated to represent management, labor, and the public, are appointed by the Governor, without Senate confirmation. This bill will clarify the qualifications for when a board member represents management, labor, or the public.
"Labor Representation on the Unemployment Appeals Board (Wiggins) and the Workers’ Compensation Appeals Board (Steinberg). These two bills would guarantee that one of seven members on the Unemployment Appeals Board and the Workers’ Compensation Appeals Board represent the workers.
"Tax Credits for Individual Political Contributions (author and bill number not yet designated). Today’s political campaigns are dominated by corporate funding. Average citizens should be encouraged to participate in political activities that they support. This bill would provide a maximum tax credit of $100 for individuals and $200 for couples for their political contributions to a candidate committee, PAC, or an organized political party.
"Labor in the Arts (Budget Item). One-time funding for the San Francisco State Art Museum and the State Historical Society for their labor in the arts program.
"Labor Archives (Budget Item). One-time funding for the San Francisco State Labor Archives."
This is the long and short of it. Or the big and tiny of it. Or the low and tall of it…hey, they’re still working on the tagline.