California May Boost Payouts to Workers Injured on the Job

May 14, 2008

Californians permanently injured on the job would get an average 16 percent increase in disability payments under new rules proposed by the state Division of Workers’ Compensation.

The formula is based on new data that links wage losses to the type of injury suffered by the worker. The formula calculates payments to disabled workers based on estimates of how much they would earn if they weren’t permanently injured.

Division Director Carrie Nevans said the new formula is based on a review of how wage losses relate to injuries under the worker compensation formula in use since 2005.

“We’ve been studying how those two factors intersect … and now have enough data and analysis to support this increase,” Nevans said in a statement.

The proposed formula would bring larger increases for workers who suffer the highest wage loss and increase benefits for some of the most common and serious injuries like those to the back, wrist, hand and ankle, Nevans said. The proposed formula would also eliminate age as a factor in setting benefits.

The public can comment through May 23. The proposed formula change will go through several months of public hearings and revisions before a final formula is adopted.

Critics said the current disability formula is already too low, so a small increase isn’t nearly enough.

Sue Borg, president of the California Applicants Attorneys Association, which represents injured workers, called the proposed increase “appalling.”

“This is certainly nothing that could be considered a fix,” Borg said.

Worker compensation changes since a 2004 overhaul have cut employers’ insurance premiums by more than half, from $6.47 per $100 in payroll in 2003 to less than $3 per $100 last year.

But groups representing injured workers said benefits are now far below those of other states.

A U.S. Chamber of Commerce report found that a California worker who lost an eye in a job-related injury would get an average of $17,714 in benefits. The same injury would bring the same worker $64,000 in New York and $168,318 in Illinois.

The proposed new California for 2009 would increase the average paid for a permanent shoulder injury from $7,693 to $8,153. The total payment for a hip injury would increase from $14,490 to $15,755. An ankle injury would bring $7,521 instead of the current $6,003.

Senate President Pro Tem Don Perata, D-Oakland, has proposed a bill to increase permanent disability payments. A spokeswoman said the senator is studying the proposed formula and could not immediately comment.

Read and comment on the proposed formula.

Read SB1717.

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