In a white paper issued in March, the California Federation of Labor (CFL) called for reforms to "undo the damage" wrought by SB 899, a California GOP-sponsored workers' compensation "reform" bill that was touted by AP in April 2004 as “one of the biggest victories of [then Gov. Arnold Schwarzenegger's] new political career".
The celluloid action hero insisted the "reform" was necessary to curtail the spiraling costs of workers' compensation insurance for California employers.
As the CFL white paper correctly notes, the rationale behind Schwarzenegger's workers' compensation "reform" legislation was largely a scam. Like so many other investment schemes, the source of spiraling workers' compensation costs can be found in the 1993 deregulation of the insurance industry and a subsequent burst of a workers' compensation insurance investment bubble. Yet, Schwarzenegger refused to include limits on the rates insurance companies could charge employers as part of his "reform" package.
Despite an initial drop in the cost of workers' compensation insurance in California, costs have again climbed --- so much so that, according to a May 15 article that appeared in the Ventura County Star, "the Port of Hueneme is preparing to pay 120 percent more for workers' compensation insurance" in the coming year.
Contrary to the philandering actor-turned-Governor's claims that the savings would not be extracted from the backs of injured workers, SB 899 contained drastic reductions in benefits --- so drastic that, in a 2004 letter published by Los Angeles Times, after pointing out that I had represented litigants in workers' compensation proceedings since 1979 and was regarded by my peers as an exceptionally effective litigator, I warned California employees that if they were injured on the job, God help them because I was not sure I could.
Whatever efforts are now made to "undo the damage" wrought by SB 899, they will come too late for my client, Charles Romano. Thanks to the law's massive reduction in prohibitive penalties that could have been assessed for bad faith refusals to furnish vital, life-sustaining medical treatment --- the new penalties are a drop-in-the-bucket compared to what it had cost to keep him alive --- Charles is no longer with us...