California Chronicle
May 13, 2010

Sen. Mark DeSaulnier (Chair) Demands Workers' Compensation Schedules Be Updated As Required by Law.

A hearing of the Senate Labor and Industrial Relations Committee (DeSaulnier - Chair) today found that the Division of Workers' Compensation (DWC) within the Department of Industrial Relations has deliberately and continuously failed to comply with a law requiring the adoption of a permanent disability rating schedule by January 1, 2010. This failure may have resulted in substantially lower Workers' Compensation benefits for more than 70,000 Californians annually.

"California businesses and workers alike are required to comply with Workers' Compensation laws. It is only reasonable that Workers' Compensation regulators must also be required to comply with the law," said DeSaulnier. "Regulators cannot come before the Legislature, the Governor, and the people of California explaining that the dog ate their rating schedule. This is simply unacceptable."

In 2005, the Governor and Legislature enacted sweeping Workers' Compensation reforms. This included adoption of a ratings schedule for permanent disability Workers' Compensation benefits that ultimately cut benefits by 50% or more in many cases. A critical component of that reform was a requirement that DWC revisit the schedule in five years and adjust benefits appropriately. Now, five years later, DWC has knowingly refused to adopt a new schedule.

"Californians who receive permanent disability Workers' Compensation benefits are the most severely injured workers," said DeSaulnier (D-Concord). "I have asked that the regulators immediately provide a timeline for adopting a ratings schedule. Failure to adopt the schedule has resulted in injured workers continuing to receive only half the benefits that they may have otherwise received under a different rating schedule."

DWC believes that an increase in permanent disability Workers' Compensation benefits may result in an increase in premiums, which they believe may not be advisable in the current economic climate.

"Whether it is appropriate to delay an increase is a discussion that should happen in public in consideration of a proposed ratings schedule," said DeSaulnier. "Regulators are not empowered to make unilateral policy decisions. Especially when those decisions violate the very law they are charged with enforcing."