NorthwestFebruary 12, 2004

Paul Queary

OLYMPIA -- The Republican-controlled Senate passed a series of changes to the workers' compensation system Wednesday that are aimed at reducing costs by trimming some benefits for injured workers.

The centerpiece of the package, Senate Bill 5378, would change the calculation of workers' compensation by:

Awarding injured workers a flat 65.5 percent of their wage as compensation. Under the current system, the rate varies from 60 percent to 72 percent.

Using an average of the worker's most lucrative 12-month period in the previous two years in the calculation, instead of the monthly wage he or she was making when injured. The change would tend to hurt seasonal workers.

Ignoring the value of fringe benefits such as health insurance, which can be added to compensation amounts under a Washington Supreme Court decision.

Senate Commerce and Trade Chairman Jim Honeyford said the changes could save $141 million in 2005 while actually increasing benefits for many workers.

"For each $10 million in savings, there's a 1 percent decrease in rates," said Honeyford, R-Sunnyside.

Facing diminished investment income, the Department of Labor and Industries raised its workers' compensation insurance rates 29.5 percent last year and 9.8 percent this year, prompting loud outcry from employers around the state and calls for reform to the system.

The bill passed 25-23 on mostly party lines.

Minority Democrats argued that the changes were unfair to workers and urged their colleagues to await the work of a business-labor panel convened by Gov. Gary Locke to study the workers' comp system.

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"Every one of these bills is an insult to that effort," said Sen. Karen Keiser, D-Des Moines. "The result will be a cut in benefits for many, many injured workers."

Honeyford said he had little confidence that Locke's group would push substantive changes.

Keiser also warned that the bill is too extreme to pass the labor-friendly House, where a similar measure died last year.

"The same fate will meet this bill, I assure you," Keiser said.

Defenders of the state's workers' comp system argue that it is one of the least expensive in the nation, even though it delivers some of the highest benefits.

The Senate also passed related bills:

Senate Bill 6395, which would require workers to report job-related injuries within five days. Current law has no set time limit. The bill, also sponsored by Honeyford, passed 30-19.

Senate Bill 6428, toughening Labor and Industries' power to crack down on medical providers who abuse the system. The bill sponsored by Honeyford passed 27-21.

Senate Bill 6461, ordering a study on whether to calculate employers' workers' comp premiums using total payroll instead of the number of hours worked. The state's system of using hours is unique in the country. The bill, sponsored by Sen. Mike Hewitt, R-Walla Walla, passed 42-7.

All the bills now go to the House.

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