AGC backs slate of workers' comp reform bills

Citing real-world examples AGC Group Retro Director Lauren Gubbe width=308
recently described to the Senate Commerce & Labor Committee how current law and Labor and Industries (LNI) policy make it possible for some injured workers to receive more income on workers’ comp timeloss benefits than what they earned when working. Gubbe made her comments during a hearing on SB 5510 legislation which simplifies and adds certainty to the calculation of workers compensation benefits.

Photo: AGC’s Lauren Gubbe testifies on workers’ comp reform bills with Association of Washington Business’s Bob Battles.

One example cited by Gubbe involves an injured worker who received wages of $38662 in the year previous to the injury working their customary pattern and trade. Yet LNI set wages at $67027 which would be capped at the LNI maximum timeloss rate of $63162.  The end result is an increased wage on LNI of $24500 annually from what had been earned while the worker was working. In addition as LNI is tax free the increased rate of $24500 would even be a bit higher. “Unfortunately this approach has increased long-term disability and pension cases in construction (and agriculture) as reflected in a pension study years ago” said Gubbe.

The legislation would change current law such that wages for L&I timeloss calculations would be determined using total wages earned in the previous 12 months (or using the number of months the worker held the job in which they were injured). While this particular bill is contentious in its current form Gubbe said “No one can argue the intent of the law is to compensate some injured workers with more earnings on LNI than what they made while working – more than what their tradespeople working are making – obviously we need to work with LNI and Labor to fix this glaring issue.”

Gubbe also testified before the House Labor Committee in support of HB 1496. This particular bill is expected to pass as it has bi-partisan support which is attributed to the hard work of a task force that included business and labor representation. AGC appreciates the commitment of Lori Daigle of Sellen Construction to serve on the task force. 

Among the many provisions of this bi-partisan bill is a new benefit to employers who provide continuous employment to an injured worker with a disability for at least 12 months without reducing the worker’s base wages. The employer must apply for the benefit which consists of a one-time payment equal to 10 percent of the workers wages or $10000 whichever is less.

Additionally HB 1496 expands the benefits of the Preferred Worker premium discount and claim protections to the employer of injury. “AGC has long been an advocate of this approach” testified Gubbe. “Under current law the Preferred Worker program is limited to new employers and is not utilized frequently as workers don’t tend to disclose they have permanent restrictions and this certification to a new employer. The structure of the program under this bill makes more sense as the employer of injury already knows the worker’s permanent disability and can readily offer work to accommodate the worker.  This approach may also help workers maintain existing leave and pension benefits that might otherwise be lost under a new employer.”

The bill also makes permanent vocational changes that were in a pilot phase and expands the opt out of vocational retraining option for workers in a retraining plan a few months who realize vocational retraining isn’t working for them.

Some other key workers’ comp reform bills that AGC is supporting include:

SB 5513  -- Removes all age requirements regarding the structured settlements in lieu of lifetime pension; makes it easier for worker with attorney representation to obtain the structured settlement option.

SB 5509 – Assures that the workers’ comp system will only be responsible for costs due to workplace injuries.

For more information email or call AGC Chief Lobbyist Jerry VanderWood at 360.352.5000.