The Stand

Protect, preserve our model workers’ compensation system

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Oppose compromise and release, Social Security offsets


The following column was co-authored by Jeff Johnson, President of the Washington State Labor Council; and Liberty and Andy Ryder, owners of Shur Kleen Car Wash. (Andy is also a Lacey City Council member.)

If you believe that our workers’ compensation system, the safety net for workers injured on the job, is broken beyond repair, stop reading. However, if you believe, like we do, that we have a system that is fundamentally decent and fair to both workers and employers, but is struggling to regain its financial footing because of the Great Recession, read on.

Most employers are insured for workers’ compensation in our state through our public state fund, while about 400 of our largest employers are self-insured with oversight from our public state fund system.

Washington state is nationally recognized for having a system that provides decent benefits, low employer costs (35 states have higher employer costs according to the 2010 Oregon Rate Study), low administrative costs (because of no advertising, CEO salaries, lobbying expenses, or profits are built into our public state fund costs), low rates of litigation, and a history of labor and business working together to improve the system.

Last November, voters in every county of the state turned down Initiative 1082, the ballot proposition to privatize workers’ compensation, because they know that, by and large, folks don’t fare well when they come up against private insurance companies.

Yet there are proposals before the Legislature to put in place the primary tool that private insurers use to gain their advantage. This tool is called “compromise and release.” The premise is that the insurance company will settle out your claim — stop fighting you — if you agree to a reduction in benefits and then release the company from further liability.

Even when the injured worker is not being starved into settlement, as happens in many other states, they are not in a good bargaining position for the following reasons: they have lost their job and are receiving between 25% and 60% less income; they are dealing with pain and the fact that they may have lost range of motion or bodily function; they are dealing with identity and self-esteem issues as they may never be able to return to their career or for that matter productive work; they are dealing with complex medical decisions and uncertainty about their future; they are grappling with the pressures and strains that the injury and their recovery have placed on their family; and finally to achieve a settlement injured workers will require an attorney which typically costs 30% of the award.

Our injured worker safety net is supposed to provide the injured worker with a degree of sure and certain relief through partial wage replacement and medical remedy. This principle is turned on its head with compromise and release — certainty becomes a game of chance and workers receive less than they are entitled to.

Another proposal before the Legislature is to impose a dollar for dollar offset of an injured worker’s monthly workers’ compensation disability payment (pension) with their monthly Social Security disability or retirement benefit. So every dollar a person would receive in Social Security benefits would reduce their workers’ compensation disability payment by a dollar.

For example, if you received $900 a month in workers’ compensation disability benefits and $600 a month in Social Security benefits, your workers’ compensation benefit would be lowered to $300 a month. This proposal would impoverish our most disabled and older injured workers.

So, how do we lower costs and long-term disability?

Recently the governor signed into law Senate Bill 5801 which introduces quality controls into the medical system for workers’ compensation and vastly expands our Centers on Occupational Health Education. It is estimated that these improvements, agreed upon by labor and business, will save the system $218 million over the next several years and reduce the incidence of long-term disability.

HB 2002, passed by the House but not yet in the Senate, would incentivize small employers to bring their injured workers back to work. This bill would save the system another $111 million.

These are productive changes that lower costs and lower long-term disability. Compromise and release and Social Security offsets have no place in Washington’s workers’ compensation system.


Jeff Johnson is President of the Washington State Labor Council. Liberty and Andy Ruder are owners of Shur Kleen Car Wash, and Andy is also a Lacey City Council member.

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Posted by on Apr 22 2011. Filed under OPINION. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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