Although Gov. Jerry Brown and the Legislature enacted a major overhaul of the system that compensates workers for job-related illnesses and injuries two years ago, aimed at reducing overhead and increasing disability payments, California employers have the nation’s highest costs, a new survey says.
The biennial survey, conducted by the Oregon Department of Consumer and Business Services, found that California’s workers’ compensation costs, $3.48 per $100 of payroll on average, are 188 percent of the national median among the 50 states and the District of Columbia.
That number pushed California from No. 3 in the 2012 survey to No. 1 this year, followed by Connecticut, New Jersey and New York. North Dakota was the lowest at just 88 cents per $100 of payroll.
The 2012 reform reduced litigation and medical costs, but also increased payments to disabled workers. It maintained a once-a-decade pattern of major workers’ compensation overhauls, reflecting the multi-billion-dollar system’s complex political matrix, which includes not only employers, but labor unions, medical and physical therapy providers, insurers and attorneys who represent disabled workers in their claims.
An employer group, the Workers’ Compensation Action Network, said in a statement that the Oregon survey showed that “employers continue to pay more to fund an inefficient system where nearly one-third of all dollars goes to litigation and other expenses other than injured workers.”