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Washington Democrats Present Workers Compensation Plan

In an attempt to reign in the Washington State Budget, a group of House Democrats put forward a proposal that seeks to make more moderate changes to the State’s Labor & Industries program than a prior proposal unveiled in the State Senate.

As we have reported before here, Washington State’s Workers’ Compensation Program is projected to run into insolvency in whole or in part within the next five to ten years.  KATU.com reports, “The system had about $499 million in reserves as of Dec. 31, the last figure available through the Department of Labor & Industries.  That figure represents the sum of medical fund of the system, which stands at nearly $709 million; the accident liability fund that is in the red for $275 million; and the pension fund that currently stands at $65 million.” Legislators point to these statistics to argue of an impending disaster that only big changes to workers’ compensation can avert.

Beyond the lost revenue stemming from the recession, critics of the Workers’ Comp Program point to one oft-quoted statistic as a major root of the problem: About 85 percent of compensation costs come from only 8 percent of all claims.  How is this possible?  Bert Caldwell of the Spokesman-Review explains that this 8 percent group is characterized by long pay-outs that stretch out into pensions.  He notes that Washington, “unlike most states, does not buy workers out of the program in order to cat its costs. Gregoire’s proposal would make that option available to workers age 55 and older who may not be retrainable and might prefer a reduced stipend that allow them to go their ow way and possibly find new work without worrying that a dollar erned is a dollar out of their pension.”

This “buy out” turns out to be the center of debate in this new round of Workers’ Compensation reform talks.

The Democrats insist their new proposal is more moderate than the one proposed by the Senate.  However, they do retain the option of a voluntary settlement as a central feature to their cost-cutting plain.  The settlement option allows workers to choose a one-time check to cover lost earning power.  Labor Unions reject this option, noting how tempting a one-time “fat check” can be and also arguing that when injured workers run out of settlement money, they are likely to turn to other social service outlets to meet their needs.  However, Rep. Chris Hurst, D-Eunumclaw, casts the settlement provision as an expansion of worker writes: “At the end of the day, it’s the workers’ money and it’s their life, and they should have the right to make this choice, to make this decision on their own and it needs to be a fair process.

Organized Labor counters that settlements rarely fully compensate an injured worker.  Jeff Johnson, president of the Washington State Labor Council recasts this “compromise” between the House and Senate as a shift in cost to injured workers.  He argues, “The only compromise, in any form of compromise and release, is workers compromising the benefits they need to survive.

The Seattle Times Editorial Board supports the measure by arguing that several safeguards, including grace periods before making a decision on a settlement, have been put in place to guard against coercion and split-second decision making that could impact an injured worker for the rest of his or her life.  As such, the momentum seems to be behind this version of the Bill, and Labor & Industries Attorneys and Activists will continue to watch these developments with an eye to protecting worker rights.

If you are injured in workplace setting, immediately seek medical help.  Injured workers should also consult with an expert Washington Labor & Industries Attorney to ensure they are protected as they file their claim.

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Emery Reddy