Employer Assessments Rise at Alarming Rate
As California's budget deficit has grown both more regular and severe, the Legislature has been searching for ways to transition the funding of government functions out of the state's struggling general fund through user fees on businesses.
Employers across California are slowly digesting news that assessments to pay for a number of state functions related to workers' compensation will rise dramatically in 2010. The announcement came this week from the Division of Workers' Compensation (DWC) and, according to some reports, the increases average more than 80 percent.
Employer assessments have risen dramatically over the past several years as both public and private sector employers have been tapped to pay for a growing portion of the government activities related to workers' compensation and workplace safety.
In 2009, legislation expanded these assessments to include employer funding for enforcing state labor standards. In all, there are now six separate funds and accounts that are funded by California employers through an assessment on their workers' compensation costs. They include the following:
- Workers' Compensation Administrative Revolving Fund
- Uninsured Employers Benefit Trust Fund
- Subsequent Injuries Benefit Trust Fund
- Workers' Compensation Fraud Account
- Occupational Safety and Health Fund
- Labor Enforcement and Compliance Fund
The assessment to fund these state functions are paid by both insured and self-insured employers. Insured employers pay the assessment through a surcharge on their premium that is collected by their insurer, and the insurer is responsible for paying the state. Self-insured employers pay based on their claim costs.
Many employers are struggling with the assessment increases. While large self-insured companies typically have an easier time absorbing the cost increases, small employers and public entities are struggling. The economic slowdown in California is making it difficult for small- and medium-sized businesses to absorb increases in the cost of doing business, and public entities are already dealing with shrinking budgets due to declining tax collections.
CCWC is currently reviewing options to propose stakeholder oversight of the assessment and funds that receive the money. Put simply, if employers are going to be assessed directly to pay for these services because they are "users" who should pay "fees", then there should be some mechanism by which employers and other stakeholders can ensure that the funds are spent wisely. |
Act Now to Support CCWC Advocacy Efforts!
The California Coalition on Workers' Compensation recently mailed each of you a 2010 Dues Renewal invoice. We want to thank those of you who have already submitted your payment and have renewed your pledge to preserve the 2003 and 2004 reforms.
CCWC is an organization dedicated to aggressively defending the workers' compensation reforms that have led to job creation in the private sector and saved tax dollars at the local level. Without the support of our membership, there would be no advocate in Sacramento representing the broad spectrum of California's public and private, small and large employers.
Your membership dollars are the only way that CCWC can continue to have a voice inside the Legislature and with regulators across the state to ensure that our state's workers' compensation system does not return to the way it was. If you have questions about your dues invoice or did not receive it, please call us immediately at 916.441.4111. |
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