Legislative Update - Rehab 'On the Table'
Saturday, August 30, 2003 | 0
The Legislature has appointed a Conference Committee to address the workers compensation crisis; the Committee is composed of three Senators and three Assemblymen (four Democrats and two Republicans). The Committee is charged with developing a bill for review and (presumably) approval by the full Legislature. It has until September 12th to complete its work.
As with previous reform attempts, the vocational rehabilitation benefit is "on the table." There have been preliminary discussions about eliminating VR with the "savings" used to increase Permanent Disability. VR represents about 4% of the employer's premium dollar (approx. $500 million of an estimated $15 billion in 2003). Applying the money spent on VR does not result in any savings for employers and would, in fact, ultimately serve to increase employer costs. Employers can only hope that the members of the Conference Committee will consider the following factors.
Injured employees who cannot return to their "usual and customary" jobs have used VR as a means to seek alternative employment. Without VR, these employees are likely to use California's Fair Employment & Housing Act (FEHA) to demand medically appropriate modified or alternative work with the pre-injury employer. That is an ideal situation for employers who have a variety of positions and the resources to train these employees. But the majority of California's employers are smaller businesses with very limited ability to provide modified or alternative work and even less knowledge about FEHA. Failure to consider or provide work accommodations can cost them tens of thousands of dollars in legal fees plus substantially more in back pay, front pay, punitive damages (which have no limits), and attorney fees. Vocational rehabilitation has provided an alternative for these employers with limited resources; eliminating VR will ultimately increase the pressures to go out of business - or out of the State.
Eliminating VR will increase the costs for a variety of welfare programs (food stamps, AFDC, etc) as well as increase the use of services at the Department of Rehabilitation, which will cost all taxpayers more, including employers. The State also stands to lose the taxes paid by those who would otherwise return to work through VR programs. The Dept. of Rehabilitation has previously testified that it cannot assume the additional burden created by the elimination of mandatory vocational rehabilitation. Eliminating VR doesn't solve any problems; it simply shifts the burden to other programs that will continue to impact employer costs and a state budget in crisis.
Last, but certainly not least, eliminating VR will have a severe impact on injured employees with substantial disability. There is no question that many injured employees with PD rates under 20% could return to their pre-injury jobs if they so desired (the problem often is that the jobs are not particularly desirable). However, many employees with PD rates over 30% have had one or more surgeries and cannot and should not return to the regular jobs. Various studies have demonstrated that this group has an unemployment/underemployment rate of about 60% unless provided with assistance in returning to work. Without VR, we are condemning this group to an existence of marginal productivity. Equity suggests that we should be considering VR with higher cap levels for injured employees with high PD rates and implementing incentives for employees with lower PD rates to return to their usual jobs whenever possible (perhaps we need to resurrect the idea of contributing PD funds to the VR effort if the employee's PD is less than 25 or 30 percent).
Policy-makers might also want to consider the impact of eliminating VR benefits and services on life pension cases. An injured worker with 60% PD may become motivated to fight for increasing his/her PD to the life pension level if s/he has no hope of VR assistance to learn new skills to compensate for his/her substantial work restrictions. Eliminating VR does not eliminate the Le Boeuf case.
The cost involved in shifting 4% of the premium cost may prove to be more than many employers can bear.
Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.
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