Davis, Labor Agree on Workers’ Comp Increase
By HOWARD FINE
Gov. Gray Davis, state Sen. President John Burton, D-San Francisco, and state labor leaders have agreed to a $2.5 billion hike in workers’ compensation benefits paid out by employers to injured workers.
The agreement is expected to be voted on in the state Legislature this week and signed into law by Feb. 15.
If the measure is approved, starting in January employers would have to pay injured workers about $100 more per week and possibly higher benefit payments in succeeding years. The increase would cost employers an estimated $1 billion in higher premiums; the rest of the benefit increase is supposed to be funded by cost-saving reforms included in the measure.
In each of the past three years, Davis had vetoed similar or larger increases in workers’ comp benefits, causing strains with Burton and the labor base that helped propel him to office four years ago.
But now, in an election year, labor has made its support for Davis conditional on his signing a workers’ comp benefit hike. Burton and labor leaders have been working to get an initiative on the ballot to raise workers’ comp benefits should the Legislature and governor fail to enact one on their own.
Davis has agreed to take an existing bill that has passed the Assembly and is pending in the Senate and amend it to incorporate the benefit hikes. The bill would then be voted on by the Senate and, if passed as expected, sent to the Assembly for concurrence and then to the governor for his signature. Such a maneuver would circumvent the lengthy committee and hearing process in the Legislature and take the measure directly to the floor of each house.
In each of the three previous years, Davis has gone to great pains to consult with employers on the effects of a workers’ comp benefit hike. But not this time.
“We were told we didn’t have anything to offer this year for the negotiations,” said Kim Mattoch, spokeswoman for the California Chamber of Commerce.
“They’re bypassing the process,” said Julie Puentes of the Orange County Business Council. “They’re excluding the folks who will be directly affected.”
Puentes said it is “odd” that Davis would anger the business community in an election year, but, she said, “Burton wants it, and there’s tremendous pressure on the governor” from labor. n
Fine is a staff reporter at the Los Angeles Business Journal.
