U.S. Department of Labor suggests federal oversight of state workers’ compensation systems and why this is necessary to combat extreme reform efforts.
NPR has published an interesting article regarding federal oversight of state workers’ compensation systems. It has linked to a report from the U.S. Department of Labor calling for minimum standards in the face of a national trend limiting benefits and reducing the likelihood of recovery. No direct administrative or legislative action has yet been proposed.
“In this critical area of the social safety net, the federal government has basically abdicated any responsibility,” says Labor Secretary Thomas Perez. “Without minimum federal standards for workers’ comp benefits, Perez adds, the current system “is really putting workers who are hurt on the job on a pathway to poverty.”
Our 2 cents
We are thrilled to see the U.S. Department of Labor put federal oversight on the table. Special interest groups have used enormous political influence to cut workers’ compensation benefits across the nation. This is done under the guise of protecting “job creators” but amounts to nothing more than a race to the bottom.
Powerful corporate interests are even pushing a new opt-out agenda. This would allow employers to create their own workers’ compensation rules. Each opt-out plan would be different from the next with arbitrary restrictions on medical and lost wages. Disputes would be taken out of the court system.
Another issue mentioned is the report is cost-shifting to other federal programs. Only a small portion of the overall costs is actually borne by employers. Programs like Social Security Disability Insurance (SSDI), Medicare, Medicaid, and health care under the Affordable Care Act are forced to pick up the slack. This ends up unfairly costing taxpayers.
Michigan has seen significant reform efforts. Governor Rick Snyder signed legislation in 2011 that changed how wage loss benefits are calculated. Employers and insurance companies are now permitted to reduce benefits using “wage earning capacity.” This is based upon jobs a disabled employee could theoretically perform. However, it does not matter if a real job is actually offered.
These changes have resulted in a 39% drop in the pure premium rate and nearly $400 million in business savings. One of our clients saw his weekly checks drop from $480 per week to just $19. It is time we restore fairness to workers’ compensation and protect this important safety net.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.
Photo courtesy of Creative Commons, by Siri Hardeland.