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.
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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.”