Labor rejects latest ‘settlement’ proposal

The following news release was distributed Saturday by the Washington State Labor Council, AFL-CIO.

LABOR REJECTS LATEST PLAN FOR INJURED WORKER ‘SETTLEMENTS’

Saying “It’s time to pass budget and go home,” unions pledge to work on responsible reform

OLYMPIA — The unions that comprise the Washington State Labor Council, AFL-CIO, are unequivocally opposed to legalizing workers’ compensation settlements — in any form — in place of the guaranteed benefits necessary to provide a real safety net for people injured on the job.

Having reviewed Gov. Chris Gregoire’s latest workers’ compensation proposal for what she calls “settlement hybrids” that spread out lump-sum buyout payments that are significantly less than what injured workers would otherwise receive, organized labor stands united in opposition. The WSLC and all of its affiliated local unions and councils, including the Washington State Building and Construction Trades Council, strongly oppose these settlements because they undermine the security our system has provided for more than 100 years.

“The bottom line is, workers who are injured on the job should not have to ‘settle’ for something less than the ‘sure and certain relief’ they are guaranteed by law,” said Jeff Johnson, President of the Washington State Labor Council. “The instability in the workers’ comp system has been caused primarily by the recession – a recession that has disproportionately harmed working-class people. And now, just as the economy is showing signs of rebounding, the recession is once again being used by powerful business interests as an opportunity to change the entire nature of our workers’ compensation system.”

“Voters in every county of this state just overwhelmingly defeated Initiative 1082 to privatize our system,” Johnson continued. “These settlements are the bread and butter of the private insurers. They are an open invitation to the private insurance industry and they give Washington employers incentive to aggressively negotiate lower benefits when workers are seriously injured on the job. The people of this state have clearly indicated they don’t want our workers’ compensation system — which is financed by employers and workers — to be run like a private insurance company.”

“It’s time for the State Legislature to pass the budget and go home,” Johnson said. “Let all the stakeholders spend the interim seeking additional opportunities to stabilize the system that don’t turn this safety net into a litigious crapshoot. In the waning hours of a special session ostensibly about passing a budget, lawmakers must not rush through a new law that turns our system into a dangerous game of ‘Let’s Make a Deal’ where some of the most disabled and vulnerable workers wind up financially destitute.”

The three goals that Gov. Gregoire laid out this session – reduce pensions, return injured workers to work, and lower rates – are met by SB 5801 and HB 2002, which are supported by labor. SB 5801, which has passed and been signed into law, will save the workers’ compensation system $218 million over four years by creating a statewide provider network for injured workers and expanding Centers for Occupational Health Education to return workers to the job quicker. HB 2002, which has passed the House, helps employers return injured workers to light-duty status, and would save the system another $200-plus million between now and 2017.

In addition, organized labor has indicated that it could accept a freeze in cost-of-living increases and other changes that, combined with SB 5801 and HB 2002, would save the system more than $700 million.

But now, as time runs out on the 30-day special session that ends this Wednesday, some legislators have threatened to hold the state budget hostage and perhaps force a second special session – at the cost to taxpayers of $10,000 a day – unless they legalize some form of the private insurance-like settlements. Advocates for injured workers, social services, senior citizens and racial equity stand united in opposing these settlements, but are prepared to work with legislators and business leaders to identify more opportunities to reduce systemic costs in ways that don’t harm injured workers.

“The best way to bring premium rates down is to create jobs and to make sure that businesses  don’t misclassify workers as independent contractors, which cheats the system out of millions of dollars in workers’ compensation premiums,” said Dave Johnson, Executive Secretary of the Washington State Building and Construction Trades Council.

The Washington State Labor Council, AFL-CIO is the largest labor organization in the state, with some 600 affiliated local unions and councils, representing approximately 400,000 rank-and-file union members in Washington state.

For more information, see:
The truth about compromise-and-release settlements