Press Statement

California Employers React to Report that "Workers' Compensation Benefits Among the Lowest"

The following statement was made by Jerry Azevedo, spokesperson for the Workers' Compensation Action Network, in response to the April 30 post on The Sacramento Bee's Capitol Alert Blog, "California's workers' comp benefits among lowest:"

"Using the exact same approach, The Bee's headline could have just as easily been, 'California workers' comp benefits 11th highest in the nation.' The fact is it is impossible to draw any conclusion about where California's total benefit levels rank based on the report, Workers' Compensation Laws as of January 1, 2014.

"While it is true that California's 'maximum weekly rate' of $290 for permanent disability is among the lowest shown in the report, looking at only one component of our state's byzantine benefit structure can only result in incomplete and misleading conclusions. If we were to isolate other metrics, the report would show:

  • At $1,074, California's maximum weekly rate for "temporary total" and "permanent total" disability benefits is 12th and 11th highest among U.S. states, respectively.
  • At $160, California's minimum weekly rate for permanent partial disability payment is the 12th highest among U.S. states."

"As it relates to 'permanent partial disability,' a weekly rate is only one of numerous factors in calculating total PD dollars. PD benefits are calculated by multiplying the rate by a predetermined number of weeks, awarded for each percentage point of permanent disability. This method uses a graduated scale whereby more weeks are awarded at higher levels of permanent disability.

"Applying this calculation may still only tell part of the story for the actual benefits received by an injured worker. Workers who are more than 70 percent disabled also receive 'life pension' payments, adjusted annually for inflation. Those who require job retraining receive an additional $6,000 for related expenses. Under the 2012 reform legislation, injured workers may also qualify for supplemental payments if they have a disproportionate loss of earnings.

"In short, a weekly rate is merely one component of calculating one benefit - there many more sides to the permanent disability Rubik's Cube.

"Although it is impossible to say exactly where overall benefits rank, what we know is that California's workers' compensation costs are among the highest in the nation. While outside the scope of the report, the answer lays in the fact that California workers are compensated more often for injuries our system considers to be permanently disabling. Our expenses to administer these claims, meanwhile, are vastly more expensive than elsewhere.

"The legislature increased both the weekly rate and the number of weeks for PD benefits through the passage of SB 863 in 2012, while also attempting to reduce administrative cost burdens for employers and reducing some of the more specious disability claims like sexual dysfunction. Whether these cost offsets will be sufficient to fund the more than $1 billion in higher benefits remains to be seen."

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"We want to get this done so its effect is immediate. We can't realize the savings promised unless it's done quickly."

- Marty Morgenstern, Secretary, Labor and Workforce Development Agency on Senate Bill 863

© 2012 - Workers' Compensation Action Network