FOR IMMEDIATE RELEASE
Friday, September 4, 1998
SACRAMENTO--Governor Pete Wilson today announced that workers' compensation premium costs have declined for four straight years - to their lowest level in over two decades - and that total premium costs in the state have dropped from a high of about $9 billion in 1993 to about $6 billion last year.
"When I came into office, we inherited a workers' compensation system that was a national disgrace," Wilson said. "Fraud was rampant, costs were spiraling out of control and driving business out of the state, while benefit levels for legitimately injured workers were among the very lowest in the nation.
"Today we have a very different picture. In the five years since I signed workers' compensation reform legislation into law, overall premium costs to employers have plummeted by over 30% while the weekly maximum benefit for injured workers has increased by about 45 percent. Questionable claims once churned out by the 'fraud mills' are a thing of the past, and when fraud does occur it is being vigorously prosecuted."
Workers' Compensation Reform 5th Anniversary Report, issued by the Department of Industrial Relations, chronicles the changes in the California workers' compensation system since 1993. The report shows that the cost of workers' compensation insurance premiums, commonly measured as a percentage of payroll, was $2.34 per $100 of payroll in 1976 and had increased almost every year until reaching $4.43 per $100 of payroll in 1993. In each year following the 1993 reforms the amount declined, falling to just $2.32 per $100 of payroll in 1997.
The report also discusses progress in other key reform areas, including vocational rehabilitation, controlling medical-legal costs, finding alternative approaches for the construction industry, expanding ethical standards for workers' compensation referees and the administrative reorganization underway in the Division of Workers' Compensation.
"It is clear that the workers' compensation system has been improved," Wilson said. "For further improvements to occur, it will require continued vigilance and a balanced commitment from all sectors of the workers' compensation community to ensure success. Any further changes can now be pursued without the crisis atmosphere that we had to overcome when crafting the reforms of 1993."
The Workers' Compensation Reform 5th Anniversary Report is accessible through the Department of Industrial Relations' website at www.dir.ca.gov, under "What's New" on the DWC Home Page.
The Department of Industrial Relations (DIR) was established to improve the working conditions for California's wage earners and to advance opportunities for profitable employment in California. Within DIR is the Division of Workers' Compensation, the Division of Occupational Safety and Health, the Division of Labor Standards Enforcement and the Division of Labor Statistics and Research, as well as various boards and commissions charged with developing standards governing conditions of employment and workplace safety and health.