Welcome back.

Julius Young

On Thursday, I presented Part 1 of what I think are California's top workers' compensation developments in the first half of 2024. Part 2 rounds out the list.

6. California workers’ comp costs appeared stable while the Department of Insurance considered a Workers' Compensation Appeals Board request for a small advisory rate increase.

In April, the Workers’ Compensation Insurance Rating Bureau of California requested a 0.9% increase in the non-binding benchmark advisory pure premium, which if adopted would take the advisory rate from $1.41 per $100 of payroll to $1.42. Public members of the WCIRB voted to recommend a 3.3% decrease but were outvoted. Subsequently, a hearing on the rate request was held by the CDI on June 6. At midyear, the CDI had not made its rate finding.

Advisory pure premium rates have been declining for nine years, so if CDI were to approve the WCIRB request, it would be a minor reversal in trend. Average charged workers’ comp rates have declined to $1.65 per $100 of payroll in 2023 from $6.32 per $100 of payroll in 2003 and $3.13 per $100 of payroll in 2015.

7. Concern about the impact of fires and indoor and outdoor heat on workers continued to mount.

In June, Calmatters.org published a series of articles documenting the substantial hurdles and red tape California firefighters face in getting treatment for post-traumatic stress.

The articles presented very specific examples of CalFire workers in distress. Delays and the lack of psychologists and psychiatrists willing to take industrial cases due to payment issues and authorization problems render many CalFire workers unable to access treatment. The articles claimed that despite the 2020 enactment of a PTSD presumption, these problems persist.

In June, a blog post from the California Applicants' Attorneys Association, “CalFire Battles More Than Flames”, noted that mental health issues are contributing to a staffing crisis and high turnover at the agency.

There has been great controversy about indoor heat standards in 2024. Although the Occupational Safety and Health Standards Board voted to adopt long-developed indoor heat standards, Gov. Gavin Newsom’s administration balked before they were to be approved by the Office of Administrative Law.

Apparently irritated that the Standards Board had voted to proceed, Newsom removed Laura Stock of UC Berkeley, one of the board members, and demoted another. The indoor heat standards were thereafter approved, with prisons excepted.

Meanwhile, a proposed federal workplace heat standard rule was unveiled at midyear by the U.S. Department of Labor and is in the comment process before adoption.

8. As usual, there were plenty of studies of the California workers’ comp system during the first half of 2024.

One study that is apparently underway is a Department of Industrial Relations commissioned study of the Subsequent Injuries Trust Fund (the SIBTF), but little has been revealed about the scope and methodology of the study or who is being consulted by the Ramd researcher tasked with this, Liisa Hiatt.

In recent years, there have been rumors that the SIBTF might be a bargaining chip in future comp reform discussions, so when published, this study may be of great interest. This is not a Commission on Health and Safety and Workers' Compensation-requested study. However, it should be noted that commissioners have raised questions about the quality of recent Rand studies, so the SIBTF study will likely be carefully scrutinized.

Another important upcoming study will be the WCIRB’s 2024 State of the System report.

Studies that were published in the 1st half of 2024 include the following:

• An in-depth June 27 WCIRB report on California workers’ compensation losses and expenses. Interestingly, in 2023 defense attorney costs ($938 million) continue to far outpace applicants' attorney fees paid ($402 million). Defense attorney costs jumped from $850 million in 2022 to $938 million in 2023.
• CHSWC's annual report.
• A WCIRB research study analyzing whether employee tenure, (i.e., how long workers have been with an employer) affects claim frequency. The study shows that some "40% of workers’ compensation claims come from workers with [less than one] year of tenure. Service-providing industries have a higher share of claims from these short-tenured workers than other industries. From 2020 to 2022, all industry groups experienced a rise in the share of claims from workers with [less than one] year of tenure, largely driven by a strong labor market with increased job openings. This might have resulted in a higher number of new hires with less experience or training, who were more susceptible to work-related injuries.”
• From the California Workers’ Compensation Institute (CWCI), an analysis of workers’ comp inpatient hospital care showing a drop in inpatient hospitalization of more than 50% during the last 10 years.
• From the California Division of Workers’ Compensation, a June study on the volume of independent medical review requests in 2023. 
• A midyear WCIRB report on how trends in the California economy in various industries (health care, hospitality, manufacturing, construction, retail, etc.) are affecting the frequency and severity of workers’ compensation in those industries.
• From CWCI, a study of cumulative claims and litigated claims.
• Also from CWCI, a study of medical-legal costs under the revised fee schedule that went into effect in 2021.
• A slide deck from National Council on Compensation Insurance (NCCI) chief actuary Donna Glenn that compares the profitability of workers’ comp insurance with other insurance lines.
• A Workers Compensation Research Institute report on the impact of excessive heat on the frequency of workers’ comp injuries.
• A national study on workers’ comp from the National Academy of Social Sciences.

9. Problems with California’s labor law enforcement continue to pose risks for California workers.

Severe staffing problems plague Cal/OSHA and the State Labor Commissioner, as do issues in the Employment Development Department’s state disability and unemployment programs. These are collateral issues that can impact California workers’ comp.

In early 2024, the Assembly Labor and Employment Committee held a hearing on labor enforcement issues and staffing problems at the California Labor Commissioner and Cal/OSHA.

Even with money for additional positions and some relaxed hiring rules, achieving and maintaining adequate staffing is a tall order.

10. Except for concern over worker heat exposure, California workers’ comp remained a back-burner issue, attracting little attention from the press, politicians or the governor.

Julius Young is an applicants' attorney and a partner for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers Comp Zone blog on the firm's website.