Chamber worried that special legislative session will include workers comp change | Arkansas Blog

Saturday, May 14, 2016

Chamber worried that special legislative session will include workers comp change

Posted By on Sat, May 14, 2016 at 8:11 AM

click to enlarge SOUNDING THE ALARM: Chamber puts out word on possible workers comp issue at special legislative session.
  • SOUNDING THE ALARM: Chamber puts out word on possible workers comp issue at special legislative session.

Gov. Asa Hutchinson's office said he'll issue a call for the May 19 special session early in the week and legislative watchers are following closely to see what else is included beyond his idea for stopgap use of Obamacare-generated surplus  and a raid on general revenue for other agencies to pay for highway construction for the next couple of years.

There is, for example, a need to clean up the mess Education Commissioner Johnny Key created by decreeing the first election of the newly empowered Pulaski County School Board should be held at the November general election, rather than in September. In fulfilling the Walton Family Foundation school "reform" wish list for general election school elections, he unwittingly created monumental expense and logistical problems for the Pulaski County Election Commission because of various legal complications. Fixing these might not be so easy because there are solid reasons — coordination with property tax assessments, for one — to keep school board elections in September.

Also: Will some demagogues demand a symbolic piece of legislation in support of bathroom hysteria? You know Sen. Bart Hester would be up for sponsorship, though he might get trampled in a stampeded by other Republicans to get to the bill filing desk first.  By  his action last week in encouraging defiance of equal rights protections under the law, Gov. Hutchinson indicates his own willingness to ove Arkansas into a pariah category with North Carolina. He WILL stand up for discrimination.

Also: There's workers compensation. Workers comp? Yes, the perennial business-labor-trial lawyer flash point.

There's apparently a move afoot to make a major change in the workers comp system. Votes have reportedly been lined up. By one account, the governor and his chief of staff, Michael Lamoureux, are on board. The business community, in the form of the Arkansas State Chamber of Commerce, isn't happy. By one account, that old familiar name, John Goodson, lawyer and fixer, is in the mix on the side of the law change.

The Chamber distributed a call to action last week.

That memo said it has met with sponsor of a bill that addresses the unfunded liability of the Workers Comp trust fund for death and disability claims. The bill stops new claims from going into the fund at the end of 2016, "with no offset to help business absorb the new costs they would assume."

The chamber memo says the debate is all about business obligation for workers comp costs, not state money, and should be put off until the 2017 regular session, not taken up at a short special session. From the chamber memo:

"The State Chamber/AIA has attempted to find a solution to this problem since 2007. Ending the Fund will solve the unfunded liability problem, but will create a cost shift to businesses that must be solved to avoid weakening one of Arkansas’s most competitive assets. Labor has consistently opposed our attempts to end the Fund and also opposed all of our attempts to reduce the cost shift to businesses if the Fund was ended."

The average cost of new claims filed in 2015 was $21,252. The employer will be required to pay this amount annually for the life of a disabled worker or the life of a surviving spouse or their remarriage. We’ve heard from three companies that are estimating their costs at $300,000 to $500,000 annually. We’ve also heard from an association that manages a self-insured trust. They’ve had one claim per year for 22 years at a cost of $1 million for each claim.

A small business owner reported that his premiums could go up about $8,000 per year. He would likely have to share that increase between the business and its 50 employees.
The chamber claims the law change could mean businesses, now exposed to $204,000 for each injury and disability claim, could face unlimited exposure.

I've been trying to find out more, particularly from the other side. Past major changes in workers comp have overwhelmingly favored business. Clearly, this idea moves the needle in the other direction. If it is on the call, it would indicate the governor had thrown in against the chamber. Not utterly surprising. He and family members (son, nephew in the Senate) have had varied legal practices, including on the plaintiff said. (Including associations with John Goodson.)

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