California Governor Vetoes Workers’ Comp Legislation

October 2, 2008

California Gov. Arnold Schwarzenegger has vetoed three bills he said would have interfered with the state’s workers’ compensation system.

SB 1115 Permanent Disability Apportionment would have prohibited discrimination on the basis of race, religious creed, color or status in other protected classes. Current law prohibits improper discrimination and the bill would have injected uncertainty into the apportionment process, according to the American Insurance Association.

“While I support the intent of this measure, I do not believe it
is necessary,” the Governor wrote in his veto message. “Current law, as well as court rulings, adequately protects injured workers
from inappropriate application of apportionment statutes. In addition, I am concerned that the manner in which this bill is worded could inadvertently create new ambiguities in the law and result in increased litigation.”

SB 1717 Permanent Disability Benefits would have increased permanent disability indemnity benefits paid to injured workers by increasing the number of weeks that such benefits are paid.

“The workers’ compensation reforms I enacted in 2004 have worked. Costs to employers have decreased, and return-to-work rates for injured workers have increased. Our work, however, is not done,” the Governor wrote.

“Medical costs in the workers’ compensation system are climbing, leading the Workers’ Compensation Insurance Rating Bureau to recommend a 16 percent increase in premiums starting next year. Given this fact, we must proceed cautiously before adding any other
costs to the system. As such, the billion dollar benefit increase proposed by this bill cannot be justified at this time.”

AB 2969 Utilization Review Physicians would have forbid the use of workers’ compensation utilization review physicians not licensed in California.

“This bill would require a physician conducting utilization review in the workers’ compensation system to be licensed in California. Such a requirement would be inconsistent with how utilization review is conducted in other areas of medicine in and not in line with best practices nationwide,” the Governor indicated. “The proponents of this measure have not demonstrated a need for this disparity in treatment.”

AIA indicated it was pleased the Governor had vetoed the three bills. “Gov. Arnold Schwarzenegger made the right decision when he used his veto pen to stop legislation that would have interfered with California’s stabilized workers’ compensation system,” the association said in a statement.

The association had initially opposed and sough vetoes of the measures.

To view the Governor’s veto messages, visit

Sources: AIA, Governor’s Office

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