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Senate Republicans, Firmly in Control Now, Pass Controversial Workers' Comp Reforms

With Republicans in control of the senate commerce committee, controversial workers' comp bill sails through.

By Josh Feit January 28, 2013

State senate Democrats made a lot of noise in the commerce and labor committee today—formerly called the labor and commerce committee until the Republican chair, Sen. Jenea Holmquist Newbry (R-13, Moses Lake) took over from the Democrats under the new Republican-dominated Majority Coalition Caucus paradigm this year.

Over the angry objections of the Democratic minority who believe the Republicans are cutting workers' benefits, the committee passed a series of workers' compensation reform bills this afternoon that would lock in a set amount for worker injury payouts and expand employers' and workers' ability to bypass the standard payout system in favor of lump sum settlements.

Republicans worry that the state's workers' comp fund, supported by employer premiums for injuries and by 50/50 employer/worker premiums for medical coverage, isn't stable; the fund took a hit during the recession from both limp returns on Wall Street and from shrinking employment rolls, and premiums have been on the rise. To avoid increasing premiums again, the GOP is setting out to lower employee payouts to workers from the fund by encouraging the one-time settlements, which are likely less costly than ongoing care over time. 

"This is not a new idea," Holmquist Newbry told the Democrats, who complained that the bills were being rushed through without being vetted. "The previous [Democratic] chairs just never allowed a hearing."

"I hope you will be the ones who will talk to the spouses of police and firefighters who have died and tell them, 'yes,' we have reduced your benefits," Sen. Steve Conway (D-29, Tacoma) said to the four Republicans who passed the five bills on consecutive 4-3 party line votes.

The new series of bills expand on workers' compensation changes that passed with Democratic support in 2011 as part of the budget deal. That legislation allowed some workers to agree on lump sum settlements with employers rather than taking ongoing payouts from the state workers' compensation fund. Labor didn't like the 2011 reforms, arguing that injured workers are often in desperate situations, and opt for one lump sum over a steady (and larger over time) payout from the state workers' comp fund.

However, Democrats green-lighted the settlement approach in 2011 because it was limited—it only applied to workers 50 and older—and because the settlements did not apply to future medical bills.

In control of the senate now, the Republicans came back to shake off those limits. Under their proposal, any worker, regardless of age, could enter into a settlement, and the two sides could factor future medical costs into the deal. In the process, the worker would forfeit his or her right to seek medical compensation for the injury in the future.

Conway lectured the Republican members: "Maybe the taxpayer should have a say in this," he said. "This is a shifting of liability from the the employer to the taxpayer." He noted that down the road a worker may see "deterioration" in a knee injury, for example, so that he or she "can no longer stand, and they have to depend on the [state] safety net, not workers' comp."

Conway also noted that there is currently $779 million in the workers' compensation account—up from $181 million last year. Citing the $1.7 billion reserve in 2007 before the recession, Conway argued that the Republicans' fiscal concerns were unfounded.


Chilly chilly: Democratic Sen. Conway vs. Republican committee chair Sen. Holmquist Newbry

Sen. Holmquist Newbry—who tried unsuccessfully (several times) to get the voluble Conway to wrap up his comments (the Republicans had another bill to introduce after voting on these—repealing the Family Medical Leave and Insurance Act), said she didn't see the new reforms as a cut.

In fact, she said that if workers didn't want to take the settlement, they could take a new workers' comp rate, which the committee also passed today, locked in at an average of 66.6 percent of a worker's salary, which is higher than the current 62 percent, she argued. (The payments range from 60 to 75 percent of a worker's salary.)

At that point, the two senators started talking over each other. Conway wanted to see the data. Holmquist Newbry wanted to move on. However, their squabble was a little off point. The issue of settlements, which labor worries will lock a young, injured worker into an immediate settlement because he has no savings to temper his emergency, is not comparable to steady payments from the workers' comp fund. "This looks like a direct cut," Conway's Democratic ally on the committee, Sen. Bob Hasegawa (D-11, Beacon Hill), said, "because you're excluding health care."

State labor leader Jeff Johnson, who was in the audience at today's hearing, said: "This saves buisness money by cutting costs out of the hide of injured workers."

However, the Republicans don't think the 66-percent average payment is off point. Holmquist Newbry's ally Mike Hewitt (R-16, Walla Walla), who was mostly reticent during Conway's angry soliloquies this afternoon, said sternly: "This is voluntary," reminding the Democrats that the settlements weren't replacing the payout system, but were simply adding an option.

A dangerously tempting option, labor fears, for a young injured logger with a family to support.

"This is not a new idea," Holmquist Newbry told the Democrats, who complained that the bills were being rushed through without being vetted. "The previous [Democratic] chairs just never allowed a hearing."

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