San Fransico Chronicle



Voters May Decide Workers' Comp Fight


Unions want plan to raise benefits put on ballot



George Raine, Chronicle Staff Writer

Tuesday, December 25, 2001



Vexed by Gov. Gray Davis' vetoes of three consecutive bills that would have increased workers' compensation benefits in California, organized labor is proposing that voters decide the matter.


The battle over the "Fairness for Injured Workers Act," as the ballot initiative is tentatively called, will be pitched.


Labor and lawyers who represent workers' comp applicants contend current benefits are grossly inadequate, while employers argue the initiative contains no reforms to a system widely seen as flawed, beyond a benefits increase that will increase costs by 40 percent or $6 billion annually.


The two sides will spend millions of dollars making their cases, assuming sufficient signatures are gathered to place the initiative on November's ballot.


There are actually two proposals, now being reviewed by state Attorney General Bill Lockyer, who will give them titles. One would amend the state constitution and the other the California Labor Code.


The initiatives began their journey last month, when they were submitted to the attorney general's office by Gnesa Duncan of Livermore, whose husband, Steve, was severely injured in a 1999 fire at the Tosco Avon refinery.


Steve Duncan was resting at home last week, too ill to talk, recovering from his 42nd surgery, on Nov. 30. He used to earn $80,000 annually at Tosco and now receives $980 in workers' comp every two weeks.


"When an injury occurs it's not just that person who is affected," said Gnesa Duncan. "The whole family is devastated, and life as they know it is no more and they're not prepared for that. Especially with benefits what they are. "


The initiative would raise maximum temporary weekly disability benefits from $490 to $651 or equal to the state average weekly wage, whichever is greater. Permanent partial disability benefits would rise from $230 a week to at least $434 (the initiative calls for two-thirds of $651 or the state average weekly wage, whichever is greater).




There will no doubt be a skirmish over what is exactly the average weekly wage in California. To figure the cost of the initiative, a quasipublic group called the Workers' Compensation Insurance Rating Bureau of San Francisco used a 2003 average of $857, based on the 2000 average listed by the Bureau of Labor Statistics. At that rate, the group said the initiative would cost employers $6 billion annually.


The Bureau of Labor Statistics Web site shows wage averages for many industries. The bureau lists the 2000 weekly average for all industries -- based on those covered by unemployment insurance -- at $792.


In his vetoes of workers' compensation bills, Davis has said he strongly believes it is time benefits be increased but found the legislation that was passed did not contain reforms to justify their cost to employers. In his last veto, Oct. 15, of a bill by Senate President Pro Tem John Burton, D-San Francisco, Davis said a comprehensive bill should also promote return to work within an employee's medical and work restrictions and include medical cost containment measures.


Davis, who has not taken a position on the initiative, will attempt to find a sponsor for such a bill in January, said spokesman Steve Maviglio. He said Davis will only sign a bill "that benefits workers without damaging the economy."


If a bill is approved, it may make the initiative unnecessary, said Art Pulaski, the executive secretary treasurer of the California Labor Federation, AFL-CIO.


Pulaski said he would withdraw the matter without hesitation if a bill sufficiently increases benefits to the national average. California now ranks 49th.




The ballot initiative is Pulaski's ace, however, because polling he conducted shows it has support from about 75 percent of the public.


"There are people out of work through no fault of their own, many living in poverty," said Pulaski. "This is a crisis because they are hidden, unseen, out of sight and they need our attention."


Workers' comp is a wedge between Davis and organized labor, which gave him $7 million in his election campaign.


"He is not going to do anything the business community does not sign off on.


But we've got to do something," Burton said. "You're much better off if you're injured in Alabama or Mississippi than you are in California."


California's constitution, however, ensures workers receive workers' comp and its coverage is broader than other states. More injured workers from a greater number of industries, including farm workers, receive benefits in California than in other states. The state also compensates for more industrial diseases than most states.




"The problem with proposals for increases of benefits is always that it's an employer's cost to do business and they want to control that cost," said Douglas Kim, a lobbyist for the California Applicants' Attorneys Association in Sacramento, which represents injured workers.


The system, argues Allan Zaremberg, president of the California Chamber of Commerce, "lends itself to excessive awards that do not reflect the true severity of injuries and that leaves less money for people who are truly deserving."


Now, with a proposed 40 percent increase, workers' comp costs] will cause employers to eliminate jobs, he said. "You've got to provide some reforms in the system," Zaremberg said.


In San Francisco, Scott Hauge, president of a small insurance company, Cal Insurance and Associates, said his workers' comp insurance clients had an average annual increase of 30 percent. "You tag on another 40 percent, and I don't know how people survive," Hauge said.

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