Originally published September 18, 2012 at 6:33 a.m., updated September 18, 2012 at 11:31 a.m.
Gov. Jerry Brown joined legislative leaders in Barrio Logan today to sign legislation to overhaul the state's $16 billion workers' compensation reform system.
"Workers' Comp'' provides medical care and financial compensation for workers who get sick or injured while on the job.
The bill reverses a four-year trend of rate increases which, without reform, would continue to rise, meaning higher costs to businesses and lower payments to workers, according to the governor's office.
The measure passed the Senate and Assembly with only four dissenting votes in each chamber.
"These significant reforms save hundreds of millions of dollars for California's employers while preventing an imminent crisis of skyrocketing rates that would have hurt both injured workers and businesses,'' Brown said. "It's extraordinary to see Republicans and Democrats come together to solve a problem before it becomes a crisis.''
The bill created an unusual alliance between unions and employers but was opposed by lawyers, who would lose business, the Sacramento Bee reported.
The legislation changed the formula used to calculate benefits, raised monthly payments to recipients by an average of 29 percent, and got rid of coverage for things that usually wound up in court, such as enhancements for psychiatric problems, sexual dysfunction or loss of sleep, according to the newspaper. It also provides for binding arbitration to resolve disputes.
"This reform law will create greater efficiencies and accountability in the system, save major employers money that can be used to hire new workers and help our economic recovery and protect workers who have been injured on the job,'' said Assembly Speaker John Perez.
The bill's passage will increase permanent disability benefits by 30 percent, provide faster, higher-quality medical treatment and improve retraining and increase awards for those with career-ending injuries.
It will also reduce costs of workers' compensation losses by nearly $1 billion, provide a more predictable and objective benefit delivery system and reduce litigation, claims adjustment and other frictional costs.
It will save the state $40 million annually in insurance costs, and local governments, including schools, cities and counties, could save an estimated $170 annually, according to a statement from Brown's office.
Supporters believe the changes will result in lower costs overall, despite the higher payments to claimants.