While the legislature is in session, the National Federation of Independent Business/California will be profiling anti-small business bills and the adverse effect they would have on California’s job creators. This is the fourth column of that series.
Back in 2003 and 2004, our legislators were actually able put aside their partisan differences and accomplish some great reforms to the workers compensation system in California. The average costs for insured employers have been reduced by 64 percent, more injured workers are getting back on the job and we have curtailed excessive use of medical service while preserving access to quality medical treatment. Even more important is that by 2007, taxpayers had saved nearly $2 billion through cost reductions for state and local governments.
Of course, our current legislators can’t leave well enough alone, so there has been a continuous attack on these reforms from the day they were signed. The latest in the bunch is SB 773 by Senator Florez, which would increase the permanent partial disability awards by more than 50 percent starting in 2010. This bill also short-circuits the established regulatory process for determining benefit calculations.
Rolling back the bipartisan reforms would be devastating for struggling small businesses in California and the workers compensation system itself. The old system was costly, produced poor medical outcomes for injured workers and relied on a subjective, litigious system for paying permanent disability. Adding additional costs to the system would harm businesses, schools and local governments that are already struggling with the poor economy and budget cuts.
Despite the tremendous savings achieved through the bipartisan reform effort led by Governor Schwarzenegger, California employers have tragically shed more than 800,000 jobs in the last year alone and it is expected that higher system costs related to medical treatment will lead to modest premium increases in the next couple months. To add to that burden would place additional pressure on employers who have already trimmed away the fat, much of the meat, and are down to the bare bones of their businesses.
Any legislation that is proposed should recognize the fact that costs are already increasing and could continue to do so because of recent court decisions. It’s time to focus on helping California’s job creators, not making it more difficult to keep people employed.