Labor Secretary Perez Calls Opt-Out Plans 'Pathway to Poverty'

Tuesday, March 29, 2016 | 0

Calling opt-out plans that replace traditional workers’ compensation a “disturbing trend,” U.S. Department of Labor Secretary Thomas Perez has said in an interview with NPR the department has launched an investigation into the alternative plans in Texas and Oklahoma, calling them a “pathway to poverty for people who get injured on the job.”

Thomas Perez

Because workers’ compensation programs are state-run, the Labor Department has limited authority. But NPR reported the opt-out plans are governed by the federal Employee Retirement Income Security Act, or ERISA, which is regulated by the Labor Department.

Perez told NPR he wishes his department had more authority “to do more things.”

He said he wants a report compiled on the opt-out trend and its effects on workers “to document the precise nature of this problem across the country,” NPR reported.

Perez said he is particularly troubled by policies in alternative plans that require workers to report injuries immediately or by the end of their shift. He said the opt-out plans also don't cover occupational diseases, such as lung disease caused by silica exposure, that are compensable under state workers' compensation laws.

The news service said 1.5 million workers in Oklahoma and Texas are covered by alternative plans instead of state-regulated workers' comp.