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Workers’ comp reform a winner for employers and employees

When it comes to the subject of reforming California’s critical workers’ compensation system, finding common ground is a challenge. Employers struggle with the ever-increasing costs associated with a system that covers almost all of California’s 14.4 million employees. Injured workers understandably want to get the medical care and support they need to get back to work as soon as possible.

With major rate increases looming, the time to get employers and employees working together was now. And thanks to a remarkable collaboration and lots of hard work, the challenge was met … and exceeded. The workers’ compensation overhaul – overwhelmingly passed by the California Legislature and now ready for Governor Jerry Brown’s signature – will result in lower overall costs, even with its increase in benefits.

The drive to reform Workers’ Comp began earlier this year, when Governor Jerry Brown assigned the state’s Department of Industrial Relations to convene a group of stakeholders to forge a comprehensive agreement. Numerous public forums were held around thestate to identify the problem and seek improvement. From this input, a legislative package was crafted involving significant compromise by all themajor stakeholders.

The resulting legislation — SB 863 authored by Senator Kevin DeLeon – is a true “win-win”. It increases permanent disability benefits on average 30 percent, and pays for those benefits by scaling back costs and administrative procedures. The State Compensation Insurance Fund, the state’s largest issuer of workers’ compensation policies, has already said it would reduce premiums due to SB 863’s passage.

Governor Brown personally intervened with legislative leaders and worked with coalitions of employer, insurers and unions to reach consensus. Receiving only nine “no” votes, SB 863 passed in both houses with strong bipartisan support.

The bipartisan consensus achieved with SB 863 was a major accomplishment, particularly in an area that has been so contentious. But perhaps more important is the sense of common purpose between employers and labor that guided the reform effort. Urged on by Governor Brown, the employer community and union leaders put aside past battles and establish a common language. In the end, they averted an immediate crisis of skyrocketing rates while providing substantial additional help for injured workers.

SB 863 stands as a testament to what can happen when Californians join together in a united goal of making our state stronger.

Ed’s Note: Mike McGowan is president of the California State Association of Counties. Lou Paulson is president of California Professional Firefighters.


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