Businesses brace for workers’ comp bill in 2014 session

Bill sponsor Rep.Williams says second draft already in the works

Editor’s Note: This story has been updated to correct a mistake in the earlier version. The Colorado Department of Labor and Employment was not interviewed for this story and has not taken a position on this proposed legislation as initially indicated. The Colorado Statesman apologizes for the error and to the CDLE.

Colorado business leaders will keep a watchful eye on the 2014 session that starts Jan. 8. Topping the watch list: a proposed bill on workers’ compensation that some business groups believe could be bad for business. Bill supporters say it will restore balance to a system that has for too long favored employers over employees.

Rep. Angela Williams, D-Denver, will be the prime sponsor of the worker comp bill being shopped around the business and labor communities. A first draft met with less than enthusiastic support from some business groups, and a second draft is now in the works. Williams chairs the House Business, Labor, Economic & Workforce Development Committee. Her Senate counterpart, Sen. Lois Tochtrop, D-Adams County, is expected to sponsor the bill in that chamber, along with Sen. Jesse Ulibarri, D-Commerce City.

Williams told The Colorado Statesman this week the bill would ensure there are no inequities for employees in the workers’ compensation system. “We have a workers’ comp system that works very well for employers,” she said, “so we’re trying to have a balanced conversation and make sure employees get the best care when there is a loss on the job due to injury.”

Williams acknowledged there is concern over the bill within the business community. She said she has asked for an open and collaborative conversation with business leaders about the three bill concepts: doctor choice, safety rule violations, and separation agreements. “It’s not intended to undo the last 40 years of a good system that has worked,” she added. “If there is an injury on the job, we want to make sure the employee is getting the necessary care to get back on the job and as quickly as possible.”

The Colorado AFL-CIO is pushing the proposal. However, several business leaders who have seen the first draft say the bill is unnecessary. The current system makes Colorado a national leader in workers’ compensation and doesn’t need change, they claim. The Colorado Department of Labor and Employment has not taken a position on this proposed legislation.

According to Tony Gagliardi of the National Federation of Independent Business, the first draft proposed changes in benefits for workers injured on the job as a result of employer negligence. Benefits would increase by 50 percent if the employer has disregarded safety rules. Current law allows a worker’s benefits to be cut by 50 percent if the employee is injured as a result of ignoring safety rules, but there are no provisions for employer negligence.

The first draft also suggested changes to the way doctors are chosen for an injured worker. The current law allows the employer to choose up to two doctors. Gagliardi said the proposed bill would allow a worker to choose any “willing provider” for treatment.

Gagliardi noted that NFIB and the Colorado Association of Commerce and Industry (CACI) negotiated with then-Rep. Morgan Carroll, D-Aurora, to expand doctor choice several years ago. In meetings this summer with labor and other stakeholders, Gagliardi said there was no indication of any problem with that system.

Separation agreements, not technically a part of the workers’ compensation process, could be brought under the system and then banned, according to Gagliardi. An employer has to make reasonable accommodations to bring an injured worker back on the job, but sometimes employers negotiate a separation agreement with the injured worker. “This would open employers up to almost daily inspections” with the federal Occupational Safety and Health Administration (OSHA), he said. “Small businesses wouldn’t survive this,” and Gagliardi added that in his travels this summer, this issue came up at least a half-dozen times.

Kelly Brough, president and CEO of the Metro Denver Chamber of Commerce agrees with Gagliardi that Colorado’s current system is a national leader in worker’s compensation. “We have worked hard in the last decade to create one of the best programs in the country,” she said this week, “both in term of cost and servicing workers.” Brough said she had heard “rumblings” about the proposal but without an understanding of what the problem is. Tamra Ward of Colorado Concern said the message to CDLE and labor is that the business community believes the system is solid and takes into account the needs of injured workers and employers. “With any change we need to make sure there will be benefit to both sides.”

But Gagliardi is sounding a more alarmed tone. “This will undo the reforms of the early 1990s,” he said.

Not so, says Phil Hayes, political director of the Colorado AFL-CIO, a major player in the bill’s development. The key issue is to improve care, he said this week. The current workers’ compensation system, reformed 20 years ago, shifted the balance from employees to employers. But “blowing the whole thing up is not constructive.”

Addressing the doctor choice issue, Hayes said that if an employee doesn’t feel right about the treatment or doesn’t like the doctors chosen by the employer, there is no recourse. The bill’s first draft would allow an employee to go to what’s known as a “level two-accredited” worker’s compensation doctor. Hayes said there are about 600 level two doctors in the state. “Open-ended choice is not attainable from a practical perspective,” he explained. “We want good cost containment.”

The second draft is likely to say that the employer will retain the right to assign the first doctor, but in case of a problem the employee will have “limited doctor choice.”

On safety rules and benefits, the current statute is one-sided, Hayes said. “If you violate safety rules, you lose half your benefits… Our proposal doesn’t suggest removing the penalties for failing to follow safety rules” but if an injury is due to employer negligence, there should be a “corollary balance” and increase the benefit by half.

Hayes said the business community has been reasonably receptive to that idea and doesn’t intend to let “bad employer ‘actors’ get off scot-free.”

As to separation agreements, that’s still under review. Hayes said that in 90 percent of the cases, the worker is required to separate from his/her job as part of the settlement claim, but AFL-CIO and others are still studying the issue to see how big a problem it is. “It’s hard to figure out what the right policy is” on this issue, he said.

Hayes pointed out that the bill’s supporters have been upfront with the business community about the legislation. “We’re talking to people and not doing this in the backroom. We’re creatures of negotiation. You give a little, you take a little.”

Other issues on the business radar include what will happen to K-12 education reform in the wake of the defeat of Amendment 66 last November. “We have five years to implement [Senate Bill 13-213],” noted the Chamber’s Brough. “We feel we have time to sort this out and not rush into the session with solutions,” although clearly there is work to be done to figure out what the revenue will look like, she said.

Brough is more concerned about pending litigation on SB 10-191, the teacher effectiveness bill. “We continue to be strong supporters” of that legislation, she added. Colorado Concern also plans to step up and support the state’s position, should that lawsuit reach the courts, which could happen as soon as this month. Ward said Colorado Concern was one of the lead business organizations supporting SB 191, and will be ready to challenge any attempts to roll the bill back, whether legislatively or in litigation.

CACI published a list in December on legislative proposals they will watch this year; the list includes 22 bills touching on energy, health care, labor and tax issues. The Chamber is watching some of the same bills, as well as legislation that could change tax increment financing for blighted areas and legislation on multi-family residential units. Ward said Colorado Concern is looking at legislation that would affect the energy industry, and the rollout of Amendment 64, especially where it impacts employers. The amendment’s language says employers can set policy on drug testing, but that message hasn’t made its way to the general electorate, she said. The group also plans a bill that would strengthen the safeguards in the title board process for ballot measures.

As to their expectations this session, Mizraim Cordero of the Colorado Competitive Council said their first hope is that legislators “do no harm” and that “we work together to truly do things to move our economy forward.”

Gagliardi is more pessimistic. He called the 2013 session the worst for business he had seen in 15 years at the capitol. “I have not seen any indication that would lead me to believe that 2014 will be much different” because of the issues being discussed, he said. “We will be playing defense” in this election year and “wade through what is rhetoric and what is good public policy.”

— Marianne@coloradostatesman.com

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