The state senate, where the minority Republicans have teamed up with conservative Democrats for a conservative majority, passed a workers’ comp bill early in the session that allows injured workers and companies to reach lump sum settlements instead of ongoing payments for injuries. Proponents of the measure, such as centrist state Sen. Steve Hobbs (D-44, Lake Stevens), argue that the equation will save money. But those savings, labor leaders counter, inevitably must come from a decrease in compensation.
The bill has stalled in the liberal house—Republicans and conservative Democrats have tried to pull the bills to the floor on a number of occasions, but they’ve failed every time.
However, the bill is on top of the senate Republicans’ special session list and has become a bargaining chip in budget negotiations between the two chambers. A centrist Democrat on the house side, Rep. Deb Eddy (D-48, Kirkland), who supports the bill and is sponsoring her own version, may be able to pass it when her liberal house colleagues realize the senate isn’t going to budge on the issue. Eddy’s compromise version could be a more palatable version. Her version, for example, includes a provision that would have the state cover unanticipated medical costs over and above an agreed upon settlement.
Eddy tells PubliCola that there are two troubling components of the current system she’s intent on fixing with her legislation—a risk of unaffordable increases in rates on businesses and structural issues (no option for voluntary settlements) that lead to excessive and ongoing payouts.
First, Eddy says that the volatile stock market subjects employers to “short term double-digit increases in rates” that businesses can’t afford to pay. She calls labor groups out on their opposition: “Labor interests seems to either deny this problem, or think the impact on business is inevitable/overstated.”
Secondly, the system is thwarted by a lack of a voluntary settlement mechanism, Eddy says. She cites a number of reports that suggest using voluntary settlement could “improve outcomes not only for the system, generally, but for a certain class of injured worker for whom settlement is actually in their best interest.”
Again, she attacks labor’s position: “Labor’s viewpoint is a Hotel-California-like philosophy: “You can check in, but you can never leave. No voluntary settlements, ever, no how, no way.”
The voluntary settlement component has rubbed labor the wrong way all session. In March, labor-backed Rep. Mike Sells (D-38, Everett) told PubliCola that a similar “compromise and release” proposal would result in claimants getting less money in payouts than they would get in the current system—that’s where the supposed savings comes from.
Today, David Groves, spokesman for the Washington State Labor Council, says Eddy’s proposal would result in a similar reduction in payouts as previous legislation, close to $1 bilion in savings to the system.
Groves says “every dollar saved is a dollar that comes out of the pocket of injured workers.” He added that Eddy’s proposal with its likely inclusion voluntary settlements actually functions as “a billion dollar cost shift” to injured workers.
As discussions continue—the governor met with stakeholders this afternoon, Groves says the WSLC is dumbfounded at the issue’s perseverance in the special session, saying “we fail to understand how this has become and issue that will keep the legislature in Olympia in overtime.”
Eddy says the core legislative groups are ready to include voluntary settlements in the final proposal, except one. She says “of the group commonly referred to as the ‘five corners,’ [both caucuses in both chambers and the governor's office] only the House D leadership is completely dug in to a position in which voluntary settlements are seen as sort of Armageddon.”
