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Workers’ Comp Legislation Passes, Moves To Governor For Signature

August 31, 2012

This evening, the Legislature passed SB 863 (De León), the workers’ compensation bill that would both increase benefits to injured workers and is intended lower costs for employers. Gov. Jerry Brown vetoed workers’ compensation legislation last year calling for more significant reform.


This year’s package of reforms was negotiated between the California Labor Federation and several large self-insured employers including Grimmway Farms, Safeway and the Schools Insurance Authority. The Department of Industrial Relations was also engaged in the discussions and held numerous stakeholder meetings throughout the state. The legislation is intended to provide savings to employers that will offset a nearly 18 percent increase in the permanent disability rating schedule, which was agreed by employers with reforms passed during the Schwarzenegger Administration.

SB 863 was drafted to:

  • Reduce frictional costs achieved through tighter claims management;
  • Set reasonable, achievable time frames for claims resolution;
  • Create an accountable lien process;
  • Stem the flood of unnecessary “add-ons” to nearly every workers’ comp claim for sexual dysfunction and sleep disorders as a way to drive up the permanent disability award;
  • Provide better access to care for injured workers; and
  • Establish needed fee schedules, among other cost saving changes.

Groups representing employers such as the California Chamber of Commerce and the California Association of Joint Powers Authorities, support the reforms because they believe that SB 863 is a balanced approach to increasing injured worker benefits with needed system changes that reduce system wide costs related to friction and litigation.

Gov. Brown is expected to sign this package of reforms that came together in the last throes of the legislative session. The League reached out to our membership for feedback on this proposal and received positive feedback especially from risk managers. However, given the timing of this proposal and the wavering cost estimates of SB 863, the League did not ultimately take a position though we believe many of its provisions will be beneficial to cities. 

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