After weeks of intense negotiations, labor and management have reached an accord to increase workers’ compensation by approximately $400 a year for the next two years.
The resulting compromise was successfully introduced as an amendment to legislation that in itself is already touted as greatly benefiting workers.
Under H2195, sponsored by Rep. Bill Konopnicki, R-5, the children of a worker who dies on the job would get 66.66 percent of his or her average monthly wage, regardless of the number of children, if there is no surviving spouse or the surviving spouse remarries. Currently, surviving children receive between 25 percent and 66.66 percent, depending upon the number children.
The bill deals with death benefits and an amendment adopted by the Senate addresses injuries.
The increases in injured workers’ compensation will bring the cap to $3,000 a month in 2008 and to $3,600 in 2009, a huge boost to employees who last saw a hike in their injury compensation eight years ago.
The current cap stands at $2,400. Workers’ compensation is reached by multiplying the cap by two-thirds. So if a worker gets a monthly salary of $2,400, he or she would get approximately $1,600 as compensation for an injury.
The amendment, offered by Sen. Barbara Leff, R-11, and adopted during a Senate session on June 7, also requires the Industrial Commission of Arizona to adjust the cap thereafter to reflect the annual percentage increase in the state’s mean wage.
Leff said management has traditionally opposed indexing, but both sides have come to accept the compromise.
“This is very important to the business community. We are trying to keep this indexing change based on salaries only,” she said.
What the labor unions wanted
Labor unions and attorneys of injured workers were originally pushing for a $500-a-year increase until the cap reaches $4,400. Thereafter, they want the adjustment to be computed based on the increase in the consumer price index, Thomas Stillwell, a lawyer who works in the area of workers’ compensation, told the Arizona Capitol Times earlier this year.
“The business community clearly recognizes that the maximum monthly benefits need to be increased,” Leff said after amendment was adopted on the floor.
What brought both sides to the table was the possibility of a ballot initiative seeking changes in the workers’ compensation system, according to the Paradise Valley senator.
“I think actually that people are beginning to get nervous about ballot initiatives because people only get a sound bite when they vote on them,” Leff said, citing as an example Prop. 202, the minimum-wage initiative, which apparently did not take into account disabled workers. “Workers’ compensation is just too important to take any chances that something would go on the ballot that would make the system fall apart.”
Negotiations on other issues will resume in the interim, with Leff and Rep. John McComish, R-20, still taking the lead in shepherding talks between labor and management.
Off session they will hunker down and try to get an agreement on bigger and more complex issues of the workers’ benefit system, such as looking into medical inflation costs and the possibility of adopting a “standards-based medicine,” which in a way enumerates the types of treatment appropriate for an injury.
Many of these issues were so complex they tended to prevent the accord from moving forward, Leff said.
Earlier this year, lobbyist Marc Osborn for the Arizona Association of Industries mentioned items that could form part of a reform package, such as creating a study group or committee that would look into the possibility of building a hospital and surgical center and giving the Industrial Commission more authority over cases of bad faith claims.
“I think this is a first step as part of a longer term strategy to look at wage and health care costs and other things associated with workers’ compensation, and developing a more comprehensive reform package,” Osborn said.
Labor is apprehensive of any changes perceived to limit the kinds of treatment that injured workers would get.
Leff cited a standards-based medicine system in California that she said does not work and that everyone is unhappy with. They don’t want to rush into adopting something similar here in Arizona, she said.
When labor and management resume talks they are likely to be building on whatever trust was formed during the negotiations. Both sides had come to the table tense and it had taken some time before they recognized that they could trust each other, according to Leff.