|Sacramento Capitol Building|
In the past weeks, California labor unions and a few employers pushed for an end-of-session bill that would change the workers compensation system by increasing payments to permanently injured workers and regulating fees that can be charged in processing claims. On a marathon last day session, the pension reform bill, AB 340, passed on a 50-8 vote, with two Republicans voting for it and two Democrats voting against in the Assembly. The Senate later passed the bill it 36-1, with Senator Joel Anderson being the only no vote.
California has revamped its workers compensation system about once a decade for the last 30 years. The last time was in 2004 under Governor Arnold Schwarzenegger. Orange County law-maker and Assemblyman Jose Solorio worked closely with State Senator Ted Lieu to co-author the legislation that will increase permanent disability benefits for workers while also tackling some unintentional consequences of the workers’ compensation reform package approved by Gov. Schwarzenegger.
In the years since 2004, there has been a growing sense in many quarters that legitimately injured workers got a bad deal under the Schwarzenegger-era reforms, which, consequently, created more conflicts in courts as workers tried to get more money through legislation. This is as much a problem for the injured workers, who want to be fairly compensated, as it is for employers, who want a established, predictable system.
The new bill will tackle runaway costs that are stressing state and local governments. Some changes will include capping benefits for new public employees who make more than $110,100, 20% for those who don’t get Social Security. It will also eliminate pension “spiking” and raise the retirement age for new employees. Other fixes are estimated to save about $52 billion and $72 billion over 30 years, according to CalPERS, one of the state’s largest pension funds.
Governor Brown may be hoping to use the reforms, and other cost-cutting moves he made this year, to enhance his chances to win voter approval of his tax-hike initiative, Proposition 30, in November.
With the broad sweeping reform in the California workers compensation system, it is increasingly important to have experienced and adept attorney’s representing your worker’s compensation claims. The attorneys at Don Ho, LLP, are aware of the recent changes and prepared to zealously represent their clients and their employment law needs.