Olympia Business Watch

Say hello to three new state agency directors

 

Carol Nelson, Department of Revenue director, left, Dale Peinecke, Employment Security Department commissioner, center, and Joel Sacks, Department of Labor & Industries director, speak Tuesday at AWB's Spring Meeting in Spokane. Photos: Dan Brunell/AWB 

The recently appointed directors of three state agencies -- Employment Security, Labor & Industries, and Revenue -- introduced themselves Tuesday to AWB members.

Dale Peinecke (Employment Security), Joel Sacks (Labor & Industries), and Carol Nelson (Revenue) joined in a Q&A panel led by Gary Chandler, vice president of government affairs, that touched on a variety of areas where government and business intersect, including taxes, workers' compensastion and workforce training.

Peinkecke and Nelson both emphasized their extensive business credentials -- Peineck spent the first 20 years of his career with Alcoa and another 17 years with aerospace companies, and Nelson had a long career in banking -- while Sacks spoke about the early part of his career attempting to reinvent government at the federal Occupational Safety and Health Administration.

All three pledged to work on ways to make government more efficient and to work together with business.

AWB joins ceremony honoring fallen workers

A solemn ceremony in Tumwater Tuesday honored the 66 people who died in Washington last year on the job or from workplace injuries or illness. AWB joined Gov. Jay Inslee and representatives of organized labor in pledging to keep improving workplace safety until there comes a year when no one dies on the job.

Speaking to the families and friends of those who went to work and never came home, Inslee said the state honors their loss. "You need to know we embrace you today," Inslee said, noting that he has personally felt the loss of a family member -- a cousin who died while working for the King County Sheriff's Office.

AWB President Don Brunell reads the names of some of the 66 people who died from workplace injuries last year, including Christopher Rudolph, 30, a marketing director for Stevens Pass. Rudolph died in a Jan. 17  avalanche.

The governor called for a renewed culture of safety. He thanked the business community for its work in making workplaces safer. "We're not perfect yet," Inslee said. "We're ahead of the curve, but we have work to do."

This was the 20th annual memorial for those who died on the job. AWB President Don Brunell, who attended Washington's first such ceremony in 1993, noted that his upcoming retirement means this will be his last. As he addressed a packed room at L&I headquarters, he offered condolences to the families of those who died. 

"At the end of the day, we want a safer workplace where people come home every night to their loved ones," Brunell said. His own father, a volunteer firefighter, nearly died after being hit with a live wire during a call in Montana, Brunell said, adding that recent events have shown that even school teachers can be in the line of fire. 

Jeff Johnson, president of the Washington State Labor Council, told the crowd that every worker's compensation claim is a missed opportunity for injury prevention and said we all have "a moral obligation to make work as safe as it can possibly be."

Four members of the Washington State Patrol in formal blue uniforms -- one with a ceremonial sword -- honored the workers who died. Bagpipers played "Amazing Grace" as firefighters from Tumwater rang a silver bell in honor of those who died.

L&I Director Joel Sacks said the ceremony is a reminder that we can never take workplace safety for granted. Sacks noted that Washington's ceremony is unusual in that it includes wide represenatation -- from labor, business and government. 

"Each and every day we have to recommit ourselves to preventing workplace safety," Sacks said.

KING 5 News looks at workers' comp

Jeff Johnson, president of the Washington State Labor Council, is "relatively comfortable" that his allies can kill legislation aimed at heading off $1.1 billion worth of workers' compensation taxes.

That's what he told Allen Schauffler, anyway, during a taping of the KING 5 News program "Inside Politics."

And why wouldn't he be? House Speaker Frank Chopp has reportedly given orders that workers' comp reform bills shouldn't even get a hearing.

But Kris Tefft, AWB's general counsel and government affairs director, noted that Senate Bill 5127 -- the bill that employers are most interested in seeing through this year -- passed out of the Senate with strong bipartisan support before heading to the House.

The bill would give injured workers age 40 or older the option to enter into a voluntary settlement. Currently, the option is limited to workers 55 and older. 

And while it's true that it faces more of an uphill climb in the House, Tefft and Johnson both agreed that the issue could end up surfacing late in the session as an end-game issue.

It's starting to sound like 2011 all over again.

What's wrong with hearing workers' comp bills?

The idea apparently spooks House Speaker Frank Chopp, who has made it clear to House Labor & Workforce Development Chairman Mike Sells, D-Everett, that it shouldn't happen.

Sells, speaking at a labor forum, initially said that it doesn't make sense to give a hearing to the workers' compensation reform bills approved last month by the Senate because Gov. Jay Inslee is "with us," according to News Tribune reporter Jordan Schrader's Twitter timeline:

— Jordan Schrader (@Jordan_Schrader) March 7, 2013

Then, in case it wasn't clear that Sells wasn't making the call himself, he removed any doubt and said that it was Chopp and House Majority Leader Pat Sullivan, according to Schrader.

Sells underlines on workers comp: "The leadership has actually said to me, don't hear those bills," citing Chopp & Sullivan. #waleg

— Jordan Schrader (@Jordan_Schrader) March 7, 2013

The reluctance to make any changes to Washington's high-cost, high-benefit workers' comp system -- even relatively minor tweaks -- is reminiscent of the argument that took place two years ago.

In that case, reformers prevailed and managed to pass two important reform bills.

Video Rewind: Rodney Tom, Ann Rivers and Richard DeBolt

Last week, our weekly Lobby Lunch series featured Senate Majority Leader Rodney Tom, D-Medina, Sen. Ann Rivers, R-La Center, and Rep. Richard DeBolt, R-Chehalis.

Transportation figured prominently in the discussion, which came the day after Rep. Judy Clibborn, D-Mercer Island, unveiled a $10 billion transportation funding proposal.

Also, as noted in a previous blog post, Tom suggested that Gov. Jay Inslee's choice to lead the state Department of Transportation may encounter a difficult confirmation hearing.

Here are some video highlights of the rest of the meeting, starting with DeBolt's observations about the 2013 session so far -- a session that he believes sees a "chasm of philosophies" in the House of Representatives that's as deep as he's ever seen.

#awbday13 rewind: issue panel videos

Thanks to all who took time out of their busy schedules to attend AWB's 2013 Legislative Day Wednesday in Olympia.

We were grateful to have the support of TVW, Washington state's very own public affairs television network, at this event. Their team joined us for two issue panels and the governor's luncheon keynote remarks. We also blogged these sessions, plus others throughout the day, so if you missed out on the trip to Olympia, you can get caught up on things online.

Transportation Panel (blog post here)

 

Tax & Fiscal Panel (blog post here)

 

Gov. Inslee Remarks to 2013 Better Workplace Awards Luncheon (blog post here)

 Other issue area panels (video not available):

• Legislative Leadership (blog post)
• Employment Law Panel (blog post)

It's time to admit the obvious: Political will doesn't exist to pay for leave program

At this point, it doesn't make any sense to argue about the merits of state-mandated paid family leave for new parents.

The truth is that there is no money to pay for a program that lawmakers approved in 2007 without any idea about how or when it would be funded, and it's now obvious to all but its most stubborn supporters that it's time to take the law off the books.

The state Senate Committee on Commerce & Labor heard testimony Monday on a bill that would do exactly that.

Senate Bill 5159, sponsored by Sen. John Braun, R-Centralia, would simply repeal the unfunded, never-implemented family leave insurance program.

Braun told committee members that the idea for the program, which sought to give parents five weeks paid time off work to be with a new child, was the result of "good intentions," but added "we should stop fooling around with something we don't ever plan to properly fund."

Kris Tefft, AWB's general counsel and government affairs director for human resources, testified in support of the bill, saying the failure to fund the program was a de facto repeal.

"I think it's notable that the Legislature in 2007 lacked the political will to find a funding source or even an agency to implement this program," Tefft said.

Two years later, when the program was supposed to take effect, lawmakers "hit the snooze button," Tefft said, by delaying its start until 2011.

In 2011, still lacking the funding to implement the program, they hit the snooze button again.

Finally, with the release of Gov. Chris Gregoire's proposed 2013-15 budget, it appears, Tefft said, that lawmakers have "simply unplugged the alarm clock" until some later, unspecified date when they hope money will materialize.

Opponents of the bill shared heart-rending accounts of parents taking time off work to care for ill children. But the fact is, none of them actually benefited from the family leave program that's addressed in SB 5159 because it has never gone into effect.

There is literally no end to the number of things it would be nice to fund. Lawmakers must deal in reality - a reality in which, unfortunately, resources are not infinite.

More:

Crosscut: Family leave provokes fight in state Senate

KOMO News/Associated Press: Dueling bills introduced on paid family leave law

Workers' comp reform was a good start, but more work is needed

Kris Tefft, AWB's general counsel and government affairs director for workers' comp, testifies before the Senate Commerce & Labor Commitee Wednesday with Scott Dilley, left, from the Washington State Farm Bureau. Photo: Dan Brunell/AWB

The series of workers' compensation reform bills that lawmakers approved in 2011 brought some badly needed relief to Washington employers by slowing what had been a meteoric rise in industrial insurance rates.

But the 2011 reforms didn't solve all of the problems plaguing the state's workers' comp system.

Unless lawmakers take the next step, employers are facing a $110 million surcharge for each of the next 10 years as the state Department of Labor & Industries attempts to rebuild its depleted reserve fund, Kris Tefft, AWB's general counsel and government affairs director for workers' comp, told the Senate Commerce & Labor Committee on Wednesday.

Department of Labor & Industries officials are doing the best they can to rebuild the fund, Tefft said, but they are constrained in what they can do.

"We need the Legislature's help as employers if we are to avoid paying $110 million per year in higher taxes," he said.

Tefft's testimony came at the end of a hearing on a series of five bills that range from simple tweaks to the system to more substantive changes. They include: 

• Senate Bill 5112 - Allows claims representatives for retro employers and groups to schedule independent medical examinations and vocational rehabilitation assessments, subject to certain condidtions
• Senate Bill 5124 - Streamlines the way time-loss benefits are calculated for injured workers by replacing the current formula, which varies based on the worker's marital status and number of children to a standard two-thirds percent. 
• Senate Bill 5126 - Addresses a recent Supreme Court ruling by reaffirming that the state and self-insured companies can reimburse their benefit costs when a third party outside of the employment relationship causes a workers' injury on the job.
• Senate Bill 5127 - Removes the arbitrary age limitation on structured settlement availability, making it a voluntary benefit option that's open to anyone, not just workers age 55 and older.
• Senate Bill 5128 - Also deals with structured settlements, the bill streamlines the program in keeping with the legislation that passed in 2011 with a strong bipartisan vote.

The lead sponsor of all five bills is Sen. Janea Holmquist Newbry, the Moses Lake Republican who is also serving as chairwoman of the committee as a result of the shift in power from the Democrats to a coalition of 23 Republicans and two Democrats.

What employers need to know about legalized marijuana

A few days after Washington voters said 'yes' to legalized marijuana, the Seattle Police Department drew nationwide attention -- and a few grins -- with the release of "Marijwhatnow? A Guide to Legal Marijuana Use In Seattle." 

The handy guide answered questions for curious and potential pot smokers, but it didn't attempt to address any of the questions facing employers, such as: How does Washington's new law change a company's human resources policy? And what happens if an employee shows up at work high?

Greg Hendershott, a partner at Davis Wright Tremaine, provided some of those answers Wednesday during AWB's seminar, "Decriminalization of Marijuana and the Workplace."

(A webinar on the same topic will be held Jan. 15. Registration is available online.)

The short answer, Hendershott said, is that little has changed in the workplace as a result of the November vote.

Marijuana still is illegal under federal law. Employers can still test workers for drugs, including marijuana. They can still enforce drug-free workplace policies. And there is no duty for employers to accommodate medical marijuana use under Washington or Oregon law, or the federal Americans with Disabilities Act.

"Fundamentally, if you want to say nothing has changed, that's a pretty accurate statement," Hendershott said.

Brunell: There is a better way to help convicted felons find a job

If a person with a criminal record is committed to changing his or her life, it's true that having a job will help pay the rent and put food on the table.

But a proposal from Seattle City Councilman Bruce Harrell that would essentially make convicted felons a new protected class of workers is fraught with problems, AWB President Don Brunell writes in his weekly column.

For starters, it jeopardizes any hope of establishing a trusting relationship between employer and employee by prohibiting employers from looking into a job applicant's criminal record until late in the hiring process and not allowing them to reject an applicant solely on criminal history.

It raises other questions, too, such as what happens if a felon hired pursuant to the law commits a crime on the job or with information gained through their employment. Will the city of Seattle grant employers immunity from liability?

And what happens when a convicted burglar applies for a job as a locksmith? A convicted sex offender wants a job installing home carpet? Or someone convicted of vehicular manslaughter wants a job driving a truck?

Harrell must answer all of the questions that his proposal raises before it moves forward, Brunell writes. 

Tefft: Workers' comp and UI prove that government reform is possible

Reforming government programs, especially when they're as entrenched as Washington's 100-year-old workers' compensation system, is not easy.

But it's possible.

That was one of the messages that Kris Tefft, AWB's general counsel and government affairs director, shared earlier this month at the annual meeting of the Washington Forest Protection Association.

The Legislature proved it this year by adopting significant reform legislation regarding unemployment insurance and workers' compensation, Tefft said during a panel discussion on government reform and streamlining.

The unemployment insurance legislation, approved early in the 2011 regular session, is expected to save employers $360 million.

Workers' compensation reform, passed in dramatic fashion at the end of the first special session, is projected to save $1.1 billion over the next four years.

As positive as that sounds, some employers will still feel the sting of higher workers' comp insurance costs next year. That's because the Department of Labor wants to begin rebuilding depleted reserves.

Governor signs workers' comp reform bill - will rates go down?

That's the question the Associated Press leads off with this morning, noting Governor Gregoire's signing Wednesday of HB 2123, the second of two major workers' compensation reform bills passed during the 2011 legislative sessions. 

Taken together, SB 5801, which establishes a statewide medical provider network for the treatment of injured workers, and HB 2123, which trims costs and improves several long term disability structures within the system, are projected to lower the state's workers' comp costs by $519 million in 2012, and just over $1.1 billion between 2012-2015.  The Department of Labor & Industries hailed the bill signing as "historic" on the agency website. 

Washington employers, stung by a disturbing trend of annual high rate increases the last few years, are eagerly anticipating the rate relief this new legislation promises.  I am quoted in the AP piece saying we hope the implementation of these reforms leads to years of more stable workers' comp rates for employers and the workers who pay into the system. 

It's not that rates will go down or won't necessarily go up in 2012 -- the Department of Labor & Industries hasn't embarked on the rate-setting process yet -- it's just that if rates increase, it should be much more mild than the high double-digit increases that were assured had the Legislature done nothing this year.

L&I Director Judy Schurke put it very succinctly in this comprehensive interview with TVW's Austin Jenkins shortly after the legislation passed, speaking specifically to savings from the controversial "claim resolution structured settlements" component employers backed in HB 2123:

"I think we would have in perpetuity had double digit rate increases without this change."

This graphic shared Monday with members of the state Workers' Compensation Advisory Committee shows L&I's timeline and various inputs for adopting the 2012 rates.  The agency expects to propose the rate on September 20 and adopt the final rate after public hearings on November 30.

For more information on the 2011 workers' comp reforms, take a look at this short powerpoint presentation.

Supreme Court: No Job Protection for Medical Marijuana Patient

Yesterday, the Washington Supreme Court issued a long-awaited decision in a case asking whether an employee may be fired for medical marijuana use under the state law authorizing qualifying patients to use the drug.

Employee Jane Roe, suing under a psuedonynm, was fired from Teletech, a Colorado-based call-center company with a location in Bremerton, after failing a drug test.  She failed the test because she used medical marijuana with a doctor's referral under the state's Medical Use of Marijuana Act (MUMA), passed by the voters in 1998.  

After her termination, Roe sued, claiming MUMA implicitly protects an employee's off-site use of medical marijuana, and that her termination was a wrongful discharge in violation of public policy supporting medical marijuana use.  Roe's suit was strongly supported by the American Civil Liberties Union.  Teletech was represented by AWB board member Stoel Rives LLP.

In an 8-1 decision written by the newest member of the court, Justice Charles Wiggins, the Supreme Court flatly rejected both contentions.  Analyzing the statute, the court reasoned that while it allows a defense against criminal prosecution for marijuana possession, nothing in the plain language or obvious intent of the law suggests employers would face legal liability for refusing to accommodate marijuana use by employees.

Workers' comp round-up

At long last, the Legislature has passed legislation aimed at fixing some of the problems with the state's workers' compensation system. But what exactly did they approve and what does it mean for your business?

AWB's Kris Tefft has prepared a detailed report of the various bills that made it out of the Legislature this year, including House Bill 2123, the 11th-hour compromise that cleared the way for lawmakers to pass a budget and get out of town.

The bill will, among other things:

• Create a claim resolution option beginning Jan. 1 for injured workers age 55 and over. In 2015, the age limit drops to 53, and it drops to age 50 a year later in 2016. The option allows for the settlement of all aspects of an allowed claim excluding medical benefits.
• Require that settlements must be approved by the Board of Industrial Insurance Appeals.
• Provide a wage subsidy up to 50 percent of wages for up to 66 days to employers who bring injured workers back to light duty or transitional work.
• Call for a study of the frequency and severity of occupational disease claims with a report due by Dec. 1, 2012.

A break in the logjam on workers' comp - vote coming today

It's not perfect. It's less than what employers wanted.

But it's progress, at long last.

Gov. Chris Gregoire and the leaders of the four legislative caucuses struck a deal Sunday that is expected to bring significant savings to the state's troubled workers' compensation system.

Details of the agreement, including the exact bill language, were unclear late Sunday, but the deal was expected to stave off double-digit workers' comp premium hikes next year for the vast majority of Washington employers.

"It's not the full reform we were seeking," said Kris Tefft, AWB's general counsel and government affairs director for workers' compensation. "This package is much less than what we wanted, but it's more than what we have now. It's a true compromise."

Organized labor, which has fought workers' comp reform for years, denounced the deal as "atrocious" and "absolutely astounding." But House Speaker Frank Chopp, who had been standing firm with labor, called the agreement a "fair deal for everyone," including injured workers.

When asked about labor's opposition, Gregoire said it's normal for some groups to express concern whenever there is change. "This is a fair package," she said. "Their interests were discussed."

Brunell: Tax amnesty a bright spot in our dismal economy

The recently completed - and wildly successful - tax amnesty program gave state coffers a welcome boost, but the one-time windfall is no substitute for substantive reform, AWB President Don Brunell writes in his weekly column.

Allowing injured workers the option of a lump-sum settlement, which is broadly supported in the Legislature, would help rescue the state's failing workers' compensation system and save struggling employers more than $2 billion, he writes.

But union leaders and their supporters in the Legislature are apparently betting that the economy will recover on its own.

They're wrong, Brunell writes. Arun Raha, the state's chief economist, reported last week at AWB's Spring Meeting that tax collections are flat, the economy has slowed and Washington still has 176,000 fewer jobs than it did when the recession began.

"Against this backdrop, it is more critical than ever to help employers keep or grow jobs," Brunell writes. "Sadly, it appears some lawmakers still haven't gotten the message."

TVW takes a revealing look at Oregon's workers' comp success story

The Legislature has come to a virtual standstill over ... workers' compensation.

Unlikely as it may seem to some political observers, the decidedly un-sexy subject of workers' comp reform has emerged as the main stumbling block this year in the state Legislature. Within the debate, something known as voluntary settlements have become the primary focus of argument.

Jessica Gao, host of TVW's The Impact, tracked down a pair of Oregon officials -- one former and one current -- for this report on workers' compensation. And they both had some interesting things to say about voluntary settlements.

Gary Weeks, the former head of the state agencies overseeing workers' comp in both Oregon and Washington, called them a necessary part of a complete workers' comp system. Weeks -- who entered into the current debate here in Washington earlier this year with a letter supporting voluntary settlement agreements -- reiterated his position in the interview.

He also dismissed Gov. Chris Gregoire's proposal to limit voluntary settlements to workers 55 or older, saying age shouldn't matter.

John Shilts, the current administrator of the Workers' Compensation Division of Oregon's Department of Consumer & Business Services, spoke about the successful turnaround of Oregon's workers' comp system since the landmark 1990 reform package agreed to by labor and business.

Brunell: Workers' comp on the brink of collapse

In Illinois, the workers' compensation system is so out of control that a state lawmaker introduced a bill to abolish it and put workers' comp cases into the courts, AWB President Don Brunell writes in his weekly column.

It hasn't come to that yet here in Washington, but the system is headed for collapse without some kind of major reform, Brunell writes.

The state Senate approved a bill that would begin to address the problem, but it's stuck in a House committee where Speaker Frank Chopp, D-Seattle, is refusing to let it come to floor vote.

This despite overwhelming support in the Senate, which approved it on a bipartisan 34-15 vote, as well as a letter from Gary Weeks, the former director of the state agencies that oversee workers comp in both Washington and Oregon.

There is still time for Gov. Chris Gregoire, Speaker Chopp and the House Democrats to act on workers' comp, Brunell writes.

"Wouldn't it be better to make the needed reform now before the situation becomes so drastic that lawmakers introduce legislation to toss it out completely?"

Workers' comp struggle on display at Lobby Lunch

Rep. Mike Sells was blunt: "I don't believe it will get out of the House," he said of Engrossed Senate Bill 5566, the business community's top priority of the session.

Sells, the House Labor & Workforce Development Committee chairman and one of two guests today at AWB's Lobby Lunch meeting, followed that with, "I'm happy to answer questions."

The audience had a few, but no sooner had Sells, D-Everett, answered them and departed for the Hill when Rep. Cary Condotta, the ranking Republican on the committee and second speaker of the day, countered with some reasons to be optimistic about the proposed workers' compensation reform bill.

Work is continuing, even at this moment, to find a way to bring it to the floor said Condotta, R-East Wenatchee.If lawmakers can find a way to accomplish that, he has no doubt it will pass in the House just as it already did in the Senate.

"The votes are there," he said. "They really are."

Senate budget banks on workers' comp bill

The Washington State Wire reported Tuesday that Senate Republicans were insisting that Engrossed Senate Bill 5566 be included in the Senate's budget proposal and, sure enough, here it is.

The bipartisan Senate spending plan assumes passage of the bill, meaning it is now officially NTIB -- Necessary to Implement the Budget.

It's an important designation because it means the bill did not die in yesterday's cutoff, despite organized labor's campaign to stall it in the House.

The bill achieved the status thanks to the Senate's recognition that voluntary settlements -- which have drawn the most heat from opponents despite clear evidence that they work -- would actually save the state something like $16 million in reduced workers' comp premiums over the next two years. That's in addition to the estimated $1.2 billion savings the bill would bring to the overall workers' comp system during the first two years.

"This makes it more difficult to walk away from," Senate Republican Leader Mike Hewitt, R-Walla Walla, told reporter Erik Smith.

AWB's Kris Tefft called it "a nice chunk of change in a tough budget climate."

It shouldn't come as a surprise that the Senate budget writers included ESB 5566 in their proposal. After all, the chamber already passed the bill with a strong bipartisan vote.

Still, it's getting harder by the day for the House to keep pretending the issue will just go away.

Former L&I director joins workers' comp debate with strong letter to lawmakers

Gary Weeks, the former head of agencies overseeing workers' comp in both Oregon and Washington, weighed in today in support of Engrossed Senate Bill 5566.

Weeks, who is now retired, sent a powerful letter to House Speaker Frank Chopp making it clear that he supports voluntary settlement agreements, a key component of ESB 5566 and also the most controversial element of the legislation.

"While I no longer have a dog in the fight that too often characterizes business and labor approaches to workers' compensation reform, I know from experience what has worked and what can benefit both workers and business," Weeks wrote.

Voluntary settlements work.

In Oregon, they were a "central piece" of that state's landmark 1990 workers' comp reform package, Weeks said, and one of the primary reasons that Oregon has not raised its workers' comp premium in more than 20 years.

Ore. labor leaders hailed lump-sum option. Why not here?

Why, exactly, are Washington labor leaders so inflamed over the prospect of voluntary settlement agreements?

Giving injured workers the option to take a lump-sum settlement rather than a lifetime pension from the state Department of Labor & Industries is a key element of Engrossed Senate Bill 5566, the workers' comp reform bill passed by the Senate in a bipartisan vote. It's one way to lower the cost of the system over time (a whopping $1.2 billion the first two years, according to the fiscal note) without reducing worker benefit levels.

But judging by the uproar from Washington's labor union leaders, who are working hard to prevent the bill from getting an up or down vote in the House, you might think it was an idea universally loathed by labor officials everywhere.

That's not the case.

In 1990, Oregon became the most recent of the 44 states to allow voluntary settlement agreements in workers' comp claims as part of a celebrated reform package. The report from the advisory committee that negotiated the landmark bill shows that labor leaders there viewed lump-sum settlements not as a threat, but rather as a benefit.

Another call for House to vote on workers' comp reform

The Herald of Everett joined The Seattle Times today in calling on House members to -- at the very least -- give a hearing to a bill that would address some of the serious problems plaguing the state's workers' compensation system.

A bipartisan majority already approved Engrossed Senate Bill 5566 in the Senate, and yet the bill can't even get a hearing in the House, the paper notes. Its key provision -- allowing injured workers to accept a lump-sum settlement rather than a lifetime pension -- is hardly a radical idea, it added.

The editorial hits on many of the key arguments in favor of the bill: It would reduce ballooning pension liabilities and save the system an estimated $1.2 billion in the first two years; and settlement agreements would be voluntary, with many safeguards built in.

It also notes that Boeing, a major employer in Snohomish County, has called settlement agreements its No. 1 priority in Washington for several years.

ESB 5566 would "make Washington more competitive for business expansion -- just as Boeing may be deciding where to build a supersite to manufacture the next-generation 737," the paper writes.

"Opponents still have an opportunity to make their case," it concludes. "All supporters are asking for at this point is a vote on the matter by the House."

Precisely.

 

Seattle Times: House deserves to vote on workers' comp reform

The Seattle Times called on House leaders this weekend to unstick the one bill that will bring true reform to Washington's ailing workers' comp system.

"The members of the House should be allowed to vote on it," the paper said.

The controversial element of Engrossed Senate Bill 5566 - giving injured workers the option to negotiate a lump settlement rather than take a lifetime pension - is not an attack on workers, the paper said, and is in fact a better answer to the system's problems than the one offered by labor unions and trial lawyers, which is to raise taxes on employers.

"The problem is that is a tax on jobs, and the required increase in the tax is very large, and jobs are in short supply," the editorial correctly observed.

The Columbian also weighed in on workers' comp this weekend with an article that examined some of the reasons for Washington's troubles, including fraud and abnormally high pension awards.

"If you're going to be hurt on the job, Washington is the place to do it," reporter Courtney Sherwood writes in a piece that explores the subject in more detail than most news reports.

TVW examines growing push for workers' comp reform

Last night on "The Impact,"TVW's Jessica Gao tackled the complicated topic of workers' compensation reform. It's shaping up to be a major issue for lawmakers this year.

The program features a discussion with state Reps. Cary Condotta, R-East Wenatchee, and Timm Ormsby, D-Spokane, lawmakers with differing views on the subject. The set-up includes AWB's Kris Tefft disabusing the notion that allowing injured workers to enter into voluntary settlement agreements with the state -- a key provision of Engrossed Senate Bill 5566 -- puts them at risk of losing benefits.

"It's  proven technique around the country," Tefft said, noting that 44 states currently allow such agreements. "Should Washington become the 45th, this bill would provide more worker protection than any of the other 44 out there. But the over-arching worker protection in this proposal is that it's voluntary."

Check out the set-up here, including the counter-argument from Washington State Labor Council President Jeff Johnson that injured workers are not in a position to make the best decision for themselves.

The full program is here:

Rewind: Video from state Auditor Brian Sonntag's visit

Yesterday, State Auditor Brian Sonntag addressed AWB's Lobby Lunch crowd. He began by confirming that the state's financial health is not very good. He's got numbers to support the diagnosis.

Auditor Brian Sonntag: State Financial Outlook from Association of WA Business on Vimeo.

Sonntag says the state Employment Security Department is not adequately verifying eligibility of those receiving unemployment payments. With $4.7 billion paid out annually in unemployment benefits, that's a lot of money at risk. Also: The Department of Social and Health Services is not tracking and collecting inadvertent over-payments made to its workers.

Auditor Brian Sonntag: Audits of ESD and DSHS from Association of WA Business on Vimeo.

Sonntag wishes state would stop talking, start acting on reform

In the year since he last spoke at AWB's Lobby Lunch meeting, little has changed except the numbers, state Auditor Brian Sonntag said Thursday.

The state's overall finances remain in sorry condition, the workers' compensation system -- which he warned more than a year ago is in danger of insolvency -- is no better off, and officials continue to spend more time talking about government reform than implementing it.

On the bright side, Sonntag said his office is uniquely positioned to help. He mentioned several reports already produced and some that will soon be out that recommend ways to save money and improve efficiencey. Among them:

• A report on health benefits for teachers and other school employees. His office found that Washington's 295 school districts pay about $1.2 billion in employee health benefits to more than 1,000 different pools, 200 separate medical plans and 10 insurance companies. Making the plans more consistent and bringing them in line with other could save the state $180 million per biennium, he said -- enough to pay salary and benefits for 1,000 teachers.
• A report due out next month will look at the $30 million the state's workers' compensation program pays for prescription drugs, and recommend millions in recommended efficiences.
• Tax amnesty: When he brought up the idea last year, it failed to gain traction. This year, Sonntag noted that the governor's budget includes $24 million in anticipated revenue from a tax amnesty program.

Major reform or major denial in Olympia?

Fresh off Wednesday's unemployment insurance success, Rep. Richard DeBolt told a luncheon audience Thursday at AWB that this year's legislative session has the potential to produce the sweeping regulatory reforms minority Republicans have touted for years.

"We have an opportunity to reshape government," said DeBolt, R-Chehalis.

But a trio of lawmakers at Thursday's Lobby Lunch meeting -- DeBolt, Sen. Doug Ericksen, R-Bellingham, and Rep. Joel Kretz, R-Wauconda -- also questioned whether the majority Democrats in both chambers really understand the situation confronting them.

"Do the Democrats really get it? They're not going to raise taxes. There are no more federal funds," Ericksen said.

As evidence of the disconnect, the lawmakers noted some $360 million in proposed new fees contained in the House budget, the lack of progress on writing the next two-year budget and the apparent over-building of the state's new Department of Information Services building in Olympia.

"Every day I drive by the DIS building, I come to the conclusion, 'No, they don't get it yet,'" Ericksen said.

Employers want to block workplace harassers

AWB's Kris Tefft testifies in support of SB 5552

When an individual becomes the target of threats or harassment, he or she can go to court and ask a judge for a temporary protection order requiring the alleged perpetrator stay away.

When the target of such threats is a company, it's not as simple. Washington law currently does not allow employers to petition courts for protection orders against disgruntled ex-employees or others who threaten and harass their workers

A pair of bills introduced this week propose to change that.

Senate Bill 5552 and House Bill 1591 would give employers essentially the same ability to seek temporary protection orders that individuals currently have, with some safeguards built in to protect victims of domestic violence.

Kris Tefft, AWB's general counsel and government affairs director, called it a modest amendment to the state's existing law that is unfortunately needed because of the increase in workplace violence across the country.

At least 10 other states already allow employers to obtain temporary protection orders, and others are considering it, Tefft told the Senate's Committee on Labor, Commerce and Consumer Protection.

Gov. Gregoire's Keynote Remarks at AWB's 2011 Legislative Day

(Recorded: Feb. 03, 2011) Gov. Chris Gregoire’s keynote remarks at AWB's annual Legislative Day luncheon. Topics include unemployment insurance, workers' compensation, state employee pensions and education.

Holmquist Newbry: We're making headway on workers' comp, UI

Without action from lawmakers, businesses will be hit with $196 million in increased workers' compensation insurance taxes this year, state Sen. Janea Holmquist Newbry said.

Actually, it's a $212 million increase, she said, after figuring in a $16 million reduction in the portion that employees pay into the state's industrial insurance system.

And that's in addition to $366 million in higher unemployment insurance costs.

The good news, she added, is that lawmakers are making some headway on both issues, which seem to be perennial concerns for the state's employers. Lawmakers began work last year to smooth out some of the increases in UI costs, and Gov. Chris Gregoire came out with a proposal at the start of this year's session that improves upon it.

The governor's bill, SB 5135, included a temporary fix in the social portion of the UI tax calculation, a fix that would give employer's $300 million in relief this year. The other part of the bill would be great for workers, added Holmquist Newbry, R-Moses Lake.

She was the lone participant on AWB's Labor & Workforce Panel after the other lawmakers scheduled to participate had to cancel because of legislative meetings.

"That was supposed to be the easy bill," Holmquist Newbry said before offering her explanation for Wednesday's drama on the Senate floor.

Livestream: Environmental Issues Panel

Video chat rooms at Ustream

Democrats break rank in UI fight

Six Democrats broke rank in the state Senate yesterday and voted with Republicans during an unsual bit of maneuvering related to unemployment insurance.

Erik Smith at the Washington State Wire explains what happened and why the surprised Democratic majority ended up taking a roll-call vote to adjourn early.

At issue is whether to pass one bill (SB 5135) that would give businesses some temporary relief from rising UI costs, as Gov. Chris Gregoire has proposed, or whether to split it into two bills, offering a "short term" and "long term" fix.

What led up to the floor drama Tuesday was an adjustment to the bill in committee. The Senate Democratic caucus stripped out the extended federal benefits portion from the bill before it came to the floor, a move that Republicans believed was "a ploy letting the majority party later combine the popular benefits extension with proposals that labor wants and business does not," according to The Olympian's Brad Shannon.

Rep. Mark Schoesler, R-Ritzville, made a motion to reconsider and adding the federal benefits piece back in, the 70,000 people affected by the benefit were not cut off from unemployment insurance. Lawmakers were clearly surprised when six Democrats joined with Republicans and voted in favor of Schoesler's motion. "Gasps were heard" when the vote was tallied, Smith reported.

The drama was a welcome surprise for the business community. Gary Chandler, AWB's vice president of government affairs, urged those attending AWB Legislative Day this morning to call and thank the six Democratic lawmakers who broke ranks.

The six Democrats are Brian Hatfield of Raymond, Steve Hobbs of Lake Stevens, Jim Kastama of Puyallup, Craig Pridemore of Vancouver, Tim Sheldon of Hoodsport and Rodney Tom of Bellevue.

Livestream: Budget & Tax Panel

Video chat rooms at Ustream

Workers' comp takes the spotlight in Olympia

Washington's employers gave decidedly mixed reviews Tuesday to Senate Bill 5566, the governor's plan to reform the state's troubled workers' compensation system and a key component of her job growth and economic development initiative.

The good: A proposed medical provider network to treat injured workers, if done right, could be extremely effective, Darren McCallon, vice president of finance for Tacoma's TrueBlue Inc., told lawmakers in the Senate Labor, Commerce and Consumer Protection Committee.

The bad: A 30 percent increase in permanent partial disability awards. Even though it's intended to lower the cost of pensions in the long run, raising the costs now in hopes of putting off pensions later isn't a good gamble, McCallon said.

The missing: The ability to enter into voluntary settlements with injured workers younger than retirement age, something that exists in 44 other states but is lacking from the bill.

Rewind: Video from Sen. Brown and Rep. Springer's visit

As noted on the blog yesterday, the Senate and House are taking different approaches to the debate over unemployment insurance. Here is a video clip of Sen. Lisa Brown, D-Spokane, describing the Senate's position (a two-bill approach) to AWB members.

Sen. Lisa Brown Highlights: Unemployment Insurance from Association of Washington Busine on Vimeo.

Rep. Larry Springer, D-Kirkland, told the same audience that House members are still hoping to address unemployment insurance with one bill - and be done with it for the session.

Rep. Larry Springer Highlights: Unemployment Insurance from Association of Washington Business on Vimeo.

A few other highlights:

House and Senate differ on UI approach, lawmakers tell AWB

Sen. Lisa Brown, D-Spokane, said Thursday that she believes the Senate will take up the issue of unemployment insurance relief next week, and that lawmakers in that chamber favor the two-step approach that Gov. Chris Gregoire has recommended.

But Rep. Larry Springer said his colleagues in the House of Representatives are still trying to resolve the issue with one bill.

"I don't know if we can do it," Springer, D-Kirkland, said at AWB's weekly Lobby Lunch meeting. "Our primary intent is to get it done with one bill and be done with UI for the session."

Unemployment insurance became the most contentious issue in the early stages of the legislative session after labor union leaders began pushing for changes to the governor's proposal.

Specifically, they want to increase benefits by $15 per week per dependent child in exachange for a temporary reduction in UI taxes, rather than expand a worker training program as the governor proposed.

Gregoire is standing by her proposal, however, and pressuring lawmakers to get her a bill by Feb. 8 in order to head off a big rate increases.

Employers need relief from rising UI costs, not new expenses

What began as an attempt to give Washington employers some temporary relief from skyrocketing unemployment insurance tax rates is in danger of morphing into the exact opposite: A new expense.

In the above video, Donna Steward, AWB's government affairs director for unemployment insurance issues, explains what's going on with HB 1091 and SB 5135, the bills requested by Gov. Chris Gregoire.

Last week, a House committee approved a substitute version of HB 1091 that would add new unemployment insurance benefits, a move that Steward says would negate all of the tax benefits that would be derived from the temporary relief.

"It's critical for [AWB] members to get involved and contact their legislators," Steward said. "Legislators need to know and understand how the unemployment insurance rate increases are impacting your business."

The Seattle Times took a look at the issue this morning, as well, with an article featuring AWB member Judy Coovert, co-owner of Printcom Inc. in Burien. Reporter Sanjay Bhatt asks the question, "Would cutting state unemployment insurance kick-start hiring?"

The article doesn't offer a definitive answer, but it's hard to imagine that it would hurt. Harder still to imagine that raising UI taxes would help.

Previously - including video of Gregoire standing behind her original proposal

Brunell: A paycheck always beats an unemployment check

With Washington's unemployment insurance system in the news this week, AWB President Don Brunell shares his family's personal experiences from both sides of the unemployment spectrum in his weekly column.

His father worked as a master electrician, and found himself on the receiving end of a pink slip when home construction was down or a large project ended. Brunell's family also owned the garbage collection business in their small town, and he recalls going door-to-door with his brother to collect money from customers who were out of work.

Fast forward to 2011, when labor union leaders are pushing for an expansion of unemployment benefits as a trade-off for temporary rate relief for employers. AWB's Donna Steward warned lawmakers against this approach during a committee hearing this week, along with members Judy Coovert of Printcom, Inc. and Lisa Harris of TrueBlue. (You can view their testimony in the video above.)

We all want help unemployed families, Brunell writes, but adding $15 per week to unemployment benefits for each child will result in fewer jobs for the economy. An ironic consequence of the downturn is that soaring unemployment insurance taxes - triggered by the large number of layoffs over the last couple years - is making it hard for employers to create new jobs.

"When high UI costs stifle an employer's ability to create new jobs, no one wins," he says. "After all, a paycheck always beats an unemployment check."

 

Business community welcomes short-term relief from rising UI costs, but not at long-term expense

As lawmakers consider the governor's proposal to temporarily cap the rising cost of unemployment insurance, AWB staff and members are warning against coupling short-term relief with expanded benefits that will drive up costs in the long run.

"You can't give a tax cut on one side and increase benefits on the other side and expect it to be a wash," AWB's Donna Steward testified this week in the Senate Labor & Commerce Committee.

More than 75 percent of employers would see a benefit from the governor's plan, Steward said, adding that it would be welcome relief. As it is now, employers are facing an average 36 percent increase in the cost of unemployment insurance this year. Some businesses are still seeing increases in the 200-400 range range, coming on the heels of increases that were as high as 600 percent last year, she said.

But labor unions are pushing for a $15-per-week per child expansion of benefits in conjunction with the short-term relief, an expansion that would ultimtely drive up cost.

"We need to do everything possible to avoid adding new costs to this system," said Judy Coovert, co-owner of Printcom Inc. in Burien. Coovert and Lisa Harris, director of accounting at Tacoma-based staffing company TrueBlue Inc. testified along with Steward.

Paid Family Leave Mandate: Fund it or forget it!

This week, the House and Senate are hearing bills related to the state's controversial paid family leave insurance mandate, which theoretically grants workplace leave rights to employees for family leave reasons and theoretically creates a state-run socialized insurance program to pay benefits during leave.

We say theoretically because the 2007 law, narrowly passed over bi-partisan opposition, has never been funded and has never been implemented.

It's time for the Legislature to just own up to this failure and repeal it.

Originally, the program was to begin entitling eligible employees to leave and benefits starting in 2009. But without the political will to find a funding source for the benefits, and little interest in establishing the bureaucratic infrastructure to provide them, the Legislature in 2009 hit the "snooze button" on the program and made it effective in 2012.

Oregon reformed workers' comp, why can't we?

Gov. Chris Gregoire recently announced plans to reform Washington's workers' compensation system, but unfortunately there seems to be little support for the most effective solutions, which are opposed by union leaders and trial lawyers, AWB President Don Brunell writes in his weekly column.

Washington's workplaces are safer than ever, and yet State Auditor Brian Sonntag reports that the system is unsustainable and needs huge increases to remain solvent, Brunell writes.

What's the problem?

One of the problems is that too many claims remain open for too long. And one reason for that is that Washington, unlike 44 other states, does not allow voluntary settlement agreements.

Another one is that Washington, unlike most states, does not have standards that expressly link workers' comp benefits for occupational diseases to the job.

Real reform works, Brunell writes. Oregon reformed its workers' comp system 20 years ago and premiums there have not increased since 1990. In fact, premiums have decreased 13 percent since 2006 when benefits have increased.

That's one model. AWB's Kris Tefft offered ideas to the House Labor & Workforce Development Committee this week, as well. You can watch his testimony on TVW below.

The problem is clear, and the solutions are known. The question, Brunell says, is whether our Legislature has the political will and courage to act.

Workers' comp in the spotlight

Gov. Chris Gregoire kicked off a busy week of announcements on everything from education to the state ferry system by declaring what AWB and other business groups have saying for a quite a while: The state's workers' comp system must be reformed.

"Clearly we have a problem in the pension system," Gregoire said, referring to the part of the workers' comp system that amounts to just 8 percent of claims but 85 percent of costs. She proposed numerous changes to both the workers comp and unemployment insurance system aimed at controlling rapidly increasing cots to the state's employers.

"If we continue at the pace we're at now, we can't sustain the system," Gregoire said. "So this is reform we have to do if we're going to have a continuing stable system."

Many details of the governor's proposal remain unknown, so the reaction was cautious but generally favorable. AWB President Don Brunell called it a "good start." Mostly, though, it was nice to see the governor acknowledge publicly what so many observers have been saying for the last 18 or more months.

Brunell: Washington's workers' comp system must be reformed

When Washington's workers' compensation system was established in 1911, it was designed to prevent inuries and deaths, treat injured workers quickly and effectively, be efficient to administer, and settle disputed claims quickly without the need for expensive legal wrangling.

But that is not what it is today, AWB President Don Brunell writes in his weekly column.

Although work places are safer, premium rates for workers' comp insurance continue to rise at double-digit rates, up more than 66 percent since 2003. Unless meaningful reforms occur next year, the double-digit rate increases will continue for years.

The failure of Inititaive 1082, which would have allowed private insurance carriers into Washington, means it's even more important that lawmakers act quickly to adopt reforms.

It's not impossible, Brunell notes. It happened before, in the 1980s, when Gov. Booth Gardner told employers and union leaders to "just do it."

Twenty years later, Washington's workers' comp system is once again at a crossroads, Brunell writes. It's time to fix it.

 

I-1082 failure puts (even more) pressure on lawmakers to fix broken workers' comp system

It's a complicated issue.

It was overshadowed by higher-profile income tax and liquor initiatives.

Opponents outspent backers by a nearly two-to-one ratio.

Those are a few of the explanations offered for the defeat of Initiative 1082, the measure that would have ended Washington's government monopoly on industrial insurance and allowed private carriers into the market. As of Wednesday morning, I-1082 was losing 58-42 percent statewide. It was passing in only one county, Chelan.

"It certainly was a year where some fairly high profile issues that are easily reducible to slogans, such as no income tax or privatize liquor, or not," AWB's Kris Tefft told public radio reporter John Ryan.

Whatever the reason for its failure, though, one thing is clear: Something must be done to fix Washington's broken system. The status quo is not working.

It's brokenness was pointed out earlier this year by a state audit showing that one of the funds in the system is headed toward insolvency in a few years, and it will become even more clear next week when the state Department of Labor & Industries announces its proposed 2011 workers' comp insurance rates.

NW Cable News examines I-1082, promptly shreds foes' key talking point

 



Northwest Cable News aired a segment yesterday on Initiative 1082 that featured an interview with AWB's Kris Tefft speaking on behalf of the measure, and state Rep. Brendan Williams, D-Olympia,  speaking against it.

Tefft succinctly summarized some of the arguments in favor of I-1082, which would end Washington's monopoly on workers' compenation insurance by allowing private carriers to come into the market:

• Washington's mandatory state-run workers' compensation insurance is expensive and is getting more expensive with every year.
• Looking across the country, where 46 states allow private insurance carriers into the system, rates are going down or holding steady. Competition drives efficiency.
• I-1082 would offer some immediate tax relief to employees who often pay a portion of their workers' comp insurance premium at the moment but would no longer do so if I-1082 is approved.

When it was his turn, Williams made sure to mention the three letters that have become a mainstay of the anti-1082 camp: AIG. The unpopular insurance firm has nothing to do with I-1082, and yet opponents of the initiative bring up the company's name at every opportunity in hopes that its bad connotation will spill over to the initiative.

"Let's consider one of the groups that supports I-1082," Williams said, "AIG."

Only thing is, they don't, which the segment makes abundantly clear.

KPLU covers I-1082: In the end, it's a choice between troubled government system vs. free market

KPLU radio reporter Bellamy Pailthorp examined Initiative 1082 this morning, and concluded with this line:

"In the end, it's a question of what you trust: a government-run system that no one denies urgently needs reform, or free market forces and the changes private competition would bring."

That's a good summary of an issue that can seem complicated and even dry, as AP reporter Curt Woodward noted in his article yesterday.

Pailthorp's segment captured the business community's growing frustration with the Legislature's unwillingness to buck the labor union and trial attorney lobby by fixing problems with the state's workers' compensation system that have been growing for years.

"The business community finally said enough is enough, we're going to take our case to the people," said Patrick Connor, Washingtons state director for the National Federation of Independent Business.

Business leaders rally at L&I headquarters in support of I-1082

With less than two weeks until Election Day, backers of an initiative that would end Washington's government monopoly on workers' compensation insurance took their case to the doorstep of the state agency that oversees the monopoly.

Several dozen supporters of Initiative 1082 rallied Wednesday in front of the Department of Labor & Industries headquarters in Tumwater to call attention to I-1082, which seeks to open up Washington's workers' comp insurance market to private competition.

State Sen. Janea Holmquist, R-Moses Lake, addressed the crowd, saying that Washington's workers and employers deserve to have a choice about where to buy industrial insurance.

"Let's vote in I-1082," Holmquist said. "Let's send the message that we deserve better."

"Monopoly," the star of several YouTube videos put out by the campaign supporting I-1082, even made an appearance.

Voters will have to take the lead: Vote Yes on 1082

"No one disputes that workers' compensation needs reform, yet lawmakers seem in no hurry to make needed changes. Voters will have to take the lead."

That's the conclusion of The News Tribune, which earlier this month joined the majority of Washington's leading newspapers in supporting Initaitive 1082.

I-1082 would end the government monopoly on workers' comp insurance and open up Washington's market to private competition, something that's permitted in all but four states. That change alone would move Washington's system - which is currently headed toward insolvency - in the right diretion.

The Seattle Times, Spokesman-Review, Everett Herald, Yakima Herald-Republic, Longview Daily News, Wenatchee World, Centralia Chronicle and Spokane Journal of Business have all lined up behind I-1082, along with thousands of large and small business including Boeing, Safeway and Weyerhaeuser.

New I-1082 workers' comp video dropped today

Bittner + Lohr, the folks who brought you the L&I grocer, are back with a new video featuring the same big-haired bespectacled star, only now he's a Labor & Industries cubicle dweller who fantasizes that he's a rap music star who lords his monopoly power over the masses.

Decked out in various stages of bling (Really? A leopard-print Snuggie?), he reminds viewers over and over that Washington's workers' compensation system is one of only four in the country that does not allow for private competition.

"You can't stop me," he raps. "You can try, you can cry, but I'm monopoly."

Of course, he's crushed at the end when he snaps back to reality and learns that the workers' comp monopoly would disappear under Initiative 1082.