Arizona workers will get a $400-increase in their injury compensation for the first time in eight years under a bill sent to the Governor’s Office June 20, the last day of session.
Passage of the Workers’ Compensation measure, a proposal to make sweeping changes to the Clean Elections system and another proposal aimed at reducing air pollution in the Valley, were major achievements that generally remained out of the spotlight, according to a senior senator.
“(These bills) were hall of fame type of stuff,” Senate Majority Whip John Huppenthal said minutes after the 48th Legislature officially ended its First Regular Session.
“They were just really hard to negotiate. They needed more time, and so that was a blessing in disguise. That was the work that was going on while the budget work was getting all the attention,” he added.
Negotiations on these measures were complicated by the sheer number of stakeholders involved and by their potential impact on industries and the workforce, on the political landscape, and on the environment.
H2195 had lots of support
H2195, which deals with workers’ compensation and death benefits, received overwhelming support in the Senate and the House of Representatives. In fact, only one senator opposed it on the final vote, and it was unanimously passed in the House.
The compensation hike was an accord reached after weeks of negotiation between labor and management. It was long overdue, and business recognized that, Sen. Barbara Leff, R-11, had told the Arizona Capitol Times earlier.
“It’s good for the workers. They have an increased benefit amount. It’s good for business. They are able to help their employees who legitimately are hurt on the job. It’s a win for everybody,” Leff, one of the bill’s architects, said. Her comment came shortly after the bill was amended during a conference committee to make a technical correction.
The increase brings the cap of workers’ compensation to $3,000 a month next year and to $3,600 the year after, a sizable boost to employees who last saw a hike in their benefit in 1999.
Workers’ compensation is reached by multiplying the cap by two-thirds. So if a worker gets a monthly salary of $2,400, which is the current cap, he or she would get approximately $1,600 as compensation for an injury.
The bill also requires the Industrial Commission of Arizona to adjust the cap thereafter to reflect the annual percentage increase in the state’s mean wage, also a compromise since management has traditionally opposed indexing and labor has wanted the adjustment to be made based on the consumer price index.
In fact, the resulting accord was in addition to the original bill, sponsored by Rep. William Konopnicki, R-5, that in itself was already touted as a substantial gain by workers.
Under the original bill, 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 their number.
Discussions to continue over the summer
But work on the issue of workers’ compensation is far from over.
Discussion will resume between labor and management in the summer, according to Leff.
She said she and Rep. John McComish, R-20, would be there to shepherd the meetings. The two lawmakers were heavily involved in the negotiation for the compensation hike this session.
Among the items on the table would be the medical cost of compensation, Leff said.
“We are going to be looking at trying to control medical costs over the interim and to look at the different steps that need to be taken — the appropriate steps so that workers get the care that they need and that providers, physicians, and hospitals are paid appropriately to give that care,” she said.
All stakeholders will be involved and the intricacies of the system will be closely studied before steps are taken to modify them, Leff said.
The success of the negotiations was also the result of legislators showing they were going to listen to both sides and that both sides would have fair access to the lawmakers, according to Thomas Stillwell of the Arizona Association of Lawyers for Injured Workers.
It helped that Leff asked all parties to designate a reasonable number of representatives. The first meeting was a “zoo,” with dozens of people crowding the room, Stillwell said.
Stillwell said things also began to happen when labor and lawyers of injured workers “saw that there was going to be significant increase in the benefits and that business was no longer asking for widespread concessions right now.”
Labor officials also agreed to back off on their plan to bring their concerns to the ballot, the lawyer said.
In fact, Leff cited the possibility of a ballot initiative as one of the reasons that brought both sides to the negotiating table.
Lawmakers are wary of ballot initiatives since it is nearly impossible to undo or modify what voters approve. Leff had earlier said the workers’ compensation system is too complex and too important not to go through the vetting process that legislative proposals undergo.
As an example, she cited Prop. 202, the minimum wage initiative that apparently did not take into account disabled workers.
But Stillwell said his group has lingering concerns even as it prepares to negotiate in the interim. The compensation system in Arizona is not in crisis, and is in fact one of the healthiest in America, he said.
As they potentially discuss medical costs, what is important is that injured workers are able to choose their own doctors and their doctors are able to do what they think is best to treat the injured, he said.
Earlier this year, Marc Osborn, lobbyist for the Arizona Association of Industries, said the resulting compromise was a first step toward possible reforms in the compensation system. These may include the creation of 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 had said.