REQUEST FOR VETO: AB 553 (Daly) Workers’ Compensation: Return-To-Work Program

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ab 553 would require the Department of Industrial Relations to distribute $120 million annually to injured workers from the Return to Work Program (RTW Program) and shift administration of the program from the state to employers.

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Dear Legislator,

The CITY OF CITY must respectfully request your veto on Assembly Bill 553, which would require the Department of Industrial Relations to distribute $120 million annually to injured workers from the Return to Work Program (RTW Program) and shift administration of the program from the state to employers.

The Return-to-Work program was created as a compromise between employers and labor, and the purpose of the program is to provide a financial boost to injured workers who had a high loss of earnings capacity, but low permanent disability rating. The administration of the program was never intended to be the responsibility of employers, and regulators implemented the program in its current form largely over the objections of the employers who fund it. AB 553 would place a tremendous administrative burden on cities by shifting the responsibility to administer the program away from the state and on to employers and their insurers.

[IF YOU HAVE SPECIFIC EXAMPLES OF THE IMPACT OF THIS BILL ON YOUR CITY/TOWN, PLEASE INCLUDE HERE.]

The Commission on Health and Safety and Workers’ Compensation (CHSWC) released data and analysis on the RTW Program in 2016. The data suggests that utilization of the fund is already growing substantially – Between 2015 and 2017 the number of applications grew from 3765 to 13,695 and payments grew from $16.3 million to $68.4 million. The RTW Program appears to be on a trajectory to reach the upper limits of the program’s $120 million statutory cap.

The CITY OF CITY is concerned that AB 553 will lead to a benefit that varies year-to-year based on the number of applicants. This means that the benefit will rise and fall depending on the number of applicants, but the fund will always be spending to the maximum which simply was not intended. Under this construct the benefit becomes somewhat arbitrary, and the cap will need to be increased if the benefit level falls due to oversubscription of a benefit that was never meant to be widely accessed.

For these reasons, the CITY OF CITY respectfully urges you to veto AB 553 (Daly).

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REQUEST FOR VETO: AB 553 (Daly) Workers’ Compensation: Return-To-Work Program

REQUEST FOR VETO: AB 553 (Daly) Workers’ Compensation: Return-To-Work Program

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