Workers’ Comp Overhaul Narrowly Passed by Assembly

The Assembly narrowly approved a major overhaul of California’s much-criticized workers’ compensation system Thursday, sending it to the Senate, where it likely will run into more opposition.

The bill carried by Assemblyman Burt Margolin (D-Los Angeles) cleared the Assembly, 43 to 32. Margolin said the bill would result in savings to employers of more than $1 billion.

The measure seeks to eliminate fraud in the system, while giving employees who are legitimately injured on the job an increase in benefits. The amount of the increase would depend on the amount of money the new law saves the system.

The Republican-led opposition said that the measure would increase workers’ compensation costs and spawn more litigation.

Among its other major provisions, the bill would make it more difficult to collect workers’ compensation for on-the-job stress. It would bar stress claims for lawful personnel actions such as layoffs, demotions and transfers.

Although few doubt that there is a need for workers’ compensation reform, few organized lobbies have been willing to compromise. Margolin’s measure faces unusually wide opposition from lobbies that range from labor unions to the California Trial Lawyers Assn., the California Medical Assn. and business organizations.

“This bill is a placebo,” said Assemblyman Jim Brulte (R-Ontario). Calling it a “bill of goods,” Brulte charged that it is a “shill for rate increases” that would over-compensate injured employees.

Margolin called it a “serious effort to reform the system.”

“It is going to require bipartisan cooperation,” Margolin said shortly before the vote. “We have to get beyond the posturing.”

The bill also seeks to place a cap of $2,500 on the amount that employers must pay when their employees obtain medical evaluations. Employers now have unlimited exposure to costs for medical evaluations.

The bill also would limit the cost to employers for job retraining to $25,000, and limits the length of rehabilitation to 18 months.