Senate Republicans resume effort to privatize workers’ comp

OLYMPIA (Feb. 1, 2016) — A few years ago, voters in every county in Washington state — east and west, red and blue — rejected a business-funded initiative to privatize our state-run workers’ compensation system and outsource the safety net for injured workers to insurance companies. But within months of that 2010 initiative’s defeat, Republicans resumed their legislative campaign to privatize the system anyway. That effort continues in 2016.

Last week, the GOP-controlled Senate Commerce and Labor Committee narrowly advanced SB 6579 to create a legislative task force to make recommendations on how to privatize the state workers’ compensation system by July 1, 2017. The bill passed on a strict party-line vote with Sens. Michael Baumgartner (R-Spokane), John Braun (R-Centralia), Curtis King (R-Yakima) and Judy Warnick (R-Moses Lake) voting for it and Sens. Bob Hasegawa (D-Seattle), Steve Conway (D-Tacoma) and Karen Keiser (D-Kent) voting against it.

“Another bad idea and a slap in the face to injured workers and our members (at the state Department of Labor and Industries) who never quit on workers’ comp benefits,” reported the Washington Federation of State Employees, AFSCME Council 28.

Other 2016 attacks on the safety net for injured workers, which passed the Senate labor committee on the same party-line vote, include:

SB 5509 would redefine occupational disease with a new four-part test that gives employers near immunity for any illnesses/conditions that can be partially blamed on non-work activities, and dramatically restricting the time frame for filing claims.

SB 6321 opens up the independent contractor test to make more workers contractors, and appears to allow such a determination after a worker is injured. The worker may not even know they’re independent contractors and uncovered.

SB 6602 , which is scheduled for executive action in the Senate labor committee today (Feb. 1), would allow self-insured employers to allow and deny claims without Labor and Industries oversight.

These bills are now in the Senate Rules Committee waiting to be scheduled for a vote of the full Senate. They face a Feb. 17 cutoff deadline to come to a vote.

TAKE A STAND — Call the Legislature’s toll-free message center at 1-800-562-6000 and leave a message for your senator to oppose all four bills (SB 6579, 5509, 6321 and 6602) because privatizing workers’ comp and other efforts to weaken the safety net for injured workers are wrong for Washington’s working families.

BACKGROUND — Last year, ProPublica and NPR reported the results of a ground-breaking national investigation into the systematic destruction of the safety net for workers injured on the job, which they found has been “steered by big business and aided by the recent Republican takeovers of state legislatures.” The report found:

“Over the past decade, state after state has been dismantling America’s workers’ comp system with disastrous consequences for many of the hundreds of thousands of people who suffer serious injuries at work each year. The cutbacks have been so drastic in some places that they virtually guarantee injured workers will plummet into poverty. Workers often battle insurance companies for years to get the surgeries, prescriptions and basic help their doctors recommend.”

In recent years, business lobbyists in Washington pointed to the state-run system’s recession-depleted reserve funds, and predicted dramatic rate increases and job losses unless the Legislature significantly cut the system’s costs (read: benefits). They succeeded in convincing the Legislature to allow employers to negotiate lump-sum buyouts of older injured workers’ claims, which was strongly opposed by labor and other injured workers’ advocates.

The projected cost savings for that change were wildly overstated and never materialized, but rather than pull the plug on this experiment that puts injured workers and their families at risk of financial ruin in the long term, business groups have attempted to double-down on lump-sum settlements by trying to expand eligibility for these buyout to younger — and eventually all — injured workers. Their bill passed the Republican-controlled Senate last year, but died in the House.

As the economy has recovered, so have the workers’ compensation system’s reserve funds. But that hasn’t stopped business groups from continuing to push cuts. They now point to rising premiums — the modest 2% average rate increase for 2016 that employers and workers pay into the system — as an excuse to cut benefits.

Washington’s workers’ compensation system is unique in that premiums are based on hours worked not on wages paid. That means workers’ compensation premiums don’t automatically increase as wages rise, as they do in all other states. Given the state’s wage inflation rate near 4 percent, L&I’s 2% rate increase is actually a small decrease in the effective rate.

As the ProPublica/NPR report concluded, “Employers have found someone else to foot the bill for workplace accidents: American taxpayers, who shell out tens of billions of dollars a year through Social Security Disability Insurance, Medicare and Medicaid for lost wages and medical costs not covered by workers’ comp.”