A quiet burial was held this week.

The decedent? The bill to increase permanent disability benefits, SB 773
(Florez). Similar bills had passed the California legislature for 3 straight years, only to be vetoed by Governor Schwarzenegger. In 2008, it was SB 1717 (Perata) which was killed by the governor.

But this year was different. Given the magnitude of California's budget crisis, the Democratic legislative leadership apparently felt that they were not prepared to move forward on bills that would result in some increased state costs.

Local governments and public entities were said to have been lobbying hard in recent days against any bills that could raise their costs.

Those costs are going to rise anyway. For example, the State Compensation Insurance Fund has filed notice of a 15% rate increase.
Most of the probable rate increases are spurred by increasing medical costs and increasing "loss control expenses" in the comp system. We'll be hearing a lot more about that in about a week, as Insurance Commissioner Poizner holds a hearing on medical treatment costs.

Looking at the big picture, it's notable that insurance rates dropped by around 2/3 from 2003. In 2003 the average rate was around $6.50 per $100 of payroll. By 2008 it dropped to $2.25 per $100 of payroll.

SB 773 died in committee, in the Senate Appropriations Committee
"Suspense File" to be exact. Also failing to emerge from committe was a bill pushed by Voters Injured at Work, SB 3 (Cedillo). SB 3 would have
simplified the job displacement voucher process for workers unable to return to work with their employer.

We're in a year where legislators are having to say no to many of their treasured, long term allies.In this case, it means no to labor and the applicant attorneys. A $24.3 billion deficit tends to focus the mind.

The cuts that are under consideration are extreme. When closing over half of the state parks is under consideration, you know it's a big deal.
Support for UC and CSU professional schools may be on the chopping block. UC Hastings may lose $10 million in state funding.

Funds for doing DNA sampling on unidentified dead bodies is on the chopping block.

Get the idea?

State workers won't be immune to further cuts. Already, state workers
have seen their pay cut by approximately 9%. Each furlough day amounts to a 4.6% reduction in monthly wages.

Under consideration are more cuts. This could be a 5% wage cut (which would require legislative action), or another furlough day (doable by the Governor without legislative approval).

These cuts have been imposed on the Department of Industrial Relations/DWC despite the existence of user funding. More on that in another post.

But let us first praise the dead.

SB 773 (like SB 1717 before it) was designed to restore some of the Draconian cuts to permanent disability awards that ensued after the 2004 reforms.

Studies by University of California researchers demonstrated that disabled workers were receiving far less money to compensate them for disabling injuries. Benefits are some of the lowest in the nation for many types of injuries.

Meanwhile, since 2004 insurers have reaped record profits. Though carrier margins may be tightening somewhat (due to medical costs, which are roughly 70% of dollars paid out), the market is still quite competitive.

Few in the insurance industry would have the chutzpah to claim that current PD benefits are adequate. SB 773 was designed to make PD benefits more adequate.

R.I.P. my friend.

Julius Young
www.boxerlaw.com
(you can subscribe by clicking on the RSS reader button on the lower right corner under "Most Recent Entries")










State workers are a big target again.

The public vetting of Sonia Sotomayor has begun.

Unless unexpected information emerges, it's unlikely that her nomination will be sunk by verbal brickbats from Mssrs. Gingrich, and Limbaugh or others who worry about identity group-think.

Hordes of pundits and interest groups are now pouring over her opinions for clues as to how Sotomayor views the world and what her orientation may mean. Tonight I see that some pro-choice groups are uneasy over the nomination. And pro-business and pro-labor groups are seeing things that please or displease them.

It'll be interesting to see whether she can get a Republican vote to clear the committee.

For those who are concerned that she may see the world too much through the eyes of her Hispanic heritage, please explain to me why it isn't natural for any judge to look at things through the filter of their life experiences. But a more relevant question is whether the candidate is doctrinaire.

I'm jumping out of my usual territory here. As a blog focusing on California law, I don't frequently see much developing at the federal level which directly impacts California comp law.

My colleagues at Boxer & Gerson (including Leslie Levy, Jean Hyams and crew) litigate employment and disability discrimination cases under FEHA, the California anti-discrimination statue. It's rare that we'll litigate under the federal ADA. Case law under the ADA has not been kind to disabled workers.

But it's interesting to note that Judge Sotomayor fought for a more expansive interpretation of the ADA in a 2003 case, EEOC vs. J.B. Hunt Trucking. Her view did not prevail, and Sotomayor filed a worker-friendly dissenting opinion. Here is the opinion and her dissent:
http://documents.nytimes.com/selected-c ... ayor#p=354

Perhaps this is a clue to what kind of justice she will be. Or perhaps not.

Stay tuned.

Julius Young
www.boxerlaw.com

Unless you've been living as a hermit on a remote mountaintop, chances are you've run into friends and family who've been laid off this year.

Even friends who were living high on the hog in recent years.

Workers' comp claim frequency has been plunging in California. While layoff notices may provide incentive for some to pursue claims they wouldn't have pursued otherwise, many workers are loathe to pursue comp claims when their jobs are in jeopardy.

Many of the workers I've seen over the past year are very concerned about the future of their jobs. They see companies retrenching and downsizing.

Undoubtedly some of those companies are fighting for their lives. Some are bleeding red ink.

Many are fighting to cope with changes in their business model that have been dictated by recent events. Others are just evolving and innovating, with some workers being in the wrong place with the wrong skills at the wrong time.

Some are outsourcing. In our little "comp community", I've known a number of comp law firms that outsourced their dictation/word processing to India.

A big argument in past debates over workers' comp has been the notion that California could lose jobs to other states with less worker-friendly benefits. It's a concern, though never very well documented.

Labor advocates believe such arguments are a ruse for surpressing humane and adequate benefits for all California workers. In Los Angeles there has been a successful effort to organize car washes, which all too often have been uninsured for workers' comp and systemic violators of wage and hour standards.

In any event, for many folks the current economic situation is bad.

Today I saw a worker who had recently received a layoff notice under the WARN act. At his age, it's not clear whether he will ever be competitive for a job which pays even half of what he has made.

Last week, at the deposition at a large Northern California bulk building materials firm, I asked the manager whether the federal stimulus money was tricking down to get regional infrastructure projects rolling. The answer? No. The company recently laid off more than a dozen workers who supply concrete, rock, and other base buildng materials.

Federal deficits may be rising fast, but if "stimulus money" is coming, it's slow.

So it's not surprising that companies are turning to layoffs.

Do companies (big and small) have some ethical duties toward their workforce? That's the argument made by Randy Cohen, who writes a New York Times Magazine article on ethics. Here's the link to Cohen's piece:
http://ethicist.blogs.nytimes.com/2009/ ... amp;st=cse

Some readers may find such considerations quaint. After all, we live in a world where capital and information technology are very mobile. Free trade ideology and the emergence of multiple world financial centers have accelerated trends toward trans-national capitalism.

And innovation may be painful.

Critics of high executive pay have gotten considerable attention in the press. But ethics-and corporate ethics in particular-get very little focus.

Corporations clearly have obligations to their shareholders, but Cohen raises issues about the obligation
corporations have to their workers and their communities.

I'm a CNBC fan, but it's not an issue you'll see being raised often by the talking heads on Fast Money or Mad Money. The business press does (and will) focus on return on investment.

But we're getting to the point as a country where we're setting up a circular firing squad, as layoffs breed more and more economic contagion, and bigger and bigger deficits.

Here's a thought provoking piece from columnist Bob Herbert on our crumbling foundation:
http://www.nytimes.com/2009/05/26/opini ... rbert.html

Herbert thinks we need to keep our workforce busy rebuilding our country before it's too late. Unfortumately I don't see the "stimulus' as meeting Herbert's vision. What do you, dear reader, think?

Just some thoughts for my readers as we interact with workers and employers.......

Meanwhile, those of us "stakeholders" toiling in the vineyards of workers' comp press onwards.

Stay tuned.

Julius Young
www.boxerlaw.com
(have feedback? a gripe? a tip? a vision? you can share it with me at jyoung@boxerlaw.com)

I've got to start doing something else first thing on Sunday mornings.

Perhaps I should take up Yoga. Read those P.G. Wodehouse novels I always promised myself. Learn to make a better beignet. Make coffee, put on ambient music and sit by the window looking at a book of Richard Diebenkorn's Ocean Park paintings. Stare at the water.

But I'm in the political junkie habit.

These Sunday morning political talk shows are too depressing. Is Iran seeking a bomb? Of course. Do we have a workable plan for Afghanistan? Yes, but not really. Will California get a federal guarantee so the state can sell debt to avoid bankruptcy? No, but maybe yes. Is the USA on the verge of losing its credit rating? Yes. Are we closing Guantanamo? Only if we can find another place like it, but NIMBY.

Perhaps the media should just abandon the talking head format. Just let opposing groups wrestle for primacy.

Ultimate fighting promoters could make a bundle if they could get Dick Cheney in the ring with the ACLU's Anthony Romero. Let the one who can get the other in a headlock win! Hannity and Rachael Maddow can be in the wings, ready for tag team duty. Just like Bobby Flay's "Throwdown", only physical.

Here in California every interest group is starting to wrestle to protect turf. Everyone is waiting to see how the budget debacle affects their bailiwick.

And so what awaits the comp world? It's not clear what cuts await the DIR.

There's still nothing much publicly surfacing about a possible sale of SCIF's book of business, an idea (essentially a commission on sale of loss reserves?) floated by the Schwarzenegger administration. But the idea was questioned by Legislative Analyst Mac Taylor, which probably means the idea is in some trouble already.

Meanwhile, like the swallows of Capistrano and the Monarch butterflies of Pacific Grove, it's time for that annual treat from the California Chamber of Commerce. The CalChamber's "killers" list.

Job killers, to be exact. On the list are the major bills sponsored by labor and applicant attorneys to advanced the interests of disabled workers. Here's the list:
http://www.calchamber.com/GovernmentRel ... s2009.aspx

The Governor has been quite willing to veto bills that were on past versions of this list. 2009 is unlikely to be different.

Enjoy your Memorial day weekend.

Julius Young
www.boxerlaw.com
(have feedback? ideas you want to share? you can reach me at jyoung@boxerlaw.com)

(Governor Schwazenegger, clad solely in jockey shorts, kneels on the rug in his Pacific Palisades bedroom, looking out the window). Muttering to himself, his consciousness streams and riffs with his heaving chest....

"Santa, Dear Santa, I need you now. Need my stocking filled with some goodies from my new best friend, Barack. The voters sure ain't in a Santa mood. They busted my chops. So glad I decided to be in D.C. yesterday.

But what to do?

Geithner says that federal loan guarantees to California will require Congressional approval. Barack's got to know how crazy this is. Without some bridge financing, we can't pay our bills next month. This ship is sinking.

Somebody's gotta get Pelosi and Harry Reid on board with financing guarantees. Forget the waterboarding stuff and this crazy Truth Commission stuff. Do you really want them looking at what you knew and what you did about torture? Panetta pretty much already backstopped the spooks, anyway.

Most folks wanna hear about surfin' rather than waterboardin' anyway.
Surfin' Safari and Two Girls for Every Boy and all that good old California dream stuff. That's what people want. I thought I was going to give them that dream again. Collyforneeya!

This sucks.

Spending my last years in office keeping this place on life support.

And those little jerk-offs in my own party. Putting me, and even my beloved California Chamber, on the list of losers:
http://www.flashreport.org/commentary0b ... 8162202504

And can you believe the goofballs that Fleischman calls "winners of the special election"?:
http://www.flashreport.org/commentary0b ... _offsetP=0

Oh, well. No more Mr. Nice Guy. I can reinvent myself as the ultimate slasher! I'll slash and burn and cut and blow up boxes like you've never seen. I really will go out as The Terminator.

That'll show some of those purple-shirted union folks who opposed my intiatives. Overplayed their hand. Wait till I get a shot at their IHSS funding. Welfare cuts, here we come:
http://latimesblogs.latimes.com/lanow/2 ... -aid-.html

By the time they get their California Constitutional Convention or their
budget vote initiative, I'm going to have smoked em.

Gonna Budget Cut like its 1999! (apologies to Prince and KQED's John Myers....)
In 99 K-12 education was $26.3 billion; now it's $36.3 billion. Prisons were $3.3 billion in 99; now $9.6 billion. Higher education was $7.7 billion in 99; now it's $11 billion.

Workers' comp better be glad they got some user funding. I'd love to get my hands on some of that targeted dough. We'll be looking at borrowing from them. Oh yeah.

Slash, baby, slash.

That's my new mantra. I'm not a pussy and I won't go out as one. Let the groveling and whining begin. I'll dictate life and death of scores of programs.

But Barack, I need a short term Santa. Will you help?

Julius Young
www.boxerlaw.com