December 3, 2022
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Editorial: Soaring worker’s comp costs threaten California


Increased costs are once again choking the California worker’s compensation system.

That’s the conclusion reached by the Worker’s Compensation Action Network, a broadly based coalition of business and government groups fighting to keep employers from seeing their costs spiral out of control. The coalition includes the California Chamber, National Federation of Independent Business and a number of associations representing the construction, hospitality and real estate industries.

According to the coalition, the system’s cost-per-claim has jumped 41 percent to $66.92 and the Golden State is now in the top five nationally for worker’s comp costs, up from No. 13 in the wake of the 2003 and 2004 reforms that were perhaps the signature achievement of former Gov. Arnold Schwarzenegger. The administration of Gov. Jerry Brown has been quick to recognize the problem, perhaps because state and local governments as well as public school districts are getting gouged by rising costs just as badly as the private sector.

Worker’s Compensation is now a $16 billion behemoth that sucks $5.3 billion in overhead expenses out of California’s economy every year. In contrast, just slightly more, $6.4 billion a year, goes for actual medical payments to workers injured on the job.

The Action Network has put a series of reforms before the legislature in an effort to reduce the dollars flowing to third-party vendors, including expensive liens placed on employers’ assets. Also on tap are ways to streamline the claims resolution process so that workers can return to the job faster and ways to make the treatment of on-the-job injuries evidence-based when it comes to medical standards. “We need to make the system work more efficiently and direct more of the worker’s compensation pie to injured workers and less to lawyers and other vendors,” the Action Network wrote in a recent bulletin.

We agree, and we urge employers to learn more by visiting