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U.S. Lawmakers Call for More Oversight of Workers’ Comp

In response to a ProPublica and NPR investigation, members of Congress are urging the labor secretary to come up with a plan to protect injured workers and taxpayers.

Ten prominent Democratic lawmakers, including presidential candidate Sen. Bernie Sanders, are urging the U.S. secretary of labor to come up with a plan to ensure that state workers’ compensation programs are properly caring for injured workers.

The lawmakers’ letter, sent Tuesday, was prompted by an investigation by ProPublica and NPR, which found that more than 30 states have cut benefits to injured workers, created daunting hurdles to getting medical care or made it more difficult for workers with certain injuries and illnesses to qualify.

As a result, some workers have been evicted from their homes, denied prosthetic devices their doctors recommended or left in precarious situations when their home health aides were taken away. Denied care, some workers have turned to state Medicaid or federal disability programs, the investigation found.

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“State workers’ compensation laws are no longer providing adequate levels of support and compensation for workers injured on the job,” the lawmakers wrote. “Instead, costs are increasingly being shifted to the American taxpayers to foot the bill.”

The letter also cited a ProPublica and NPR story from last week that detailed a campaign by some of the biggest names in corporate America to let companies “opt out” of workers’ comp and write their own rules for taking care of injured workers. Laws in Texas and Oklahoma already allow such an option and it is under serious consideration in Tennessee and South Carolina.

“The race to the bottom now appears to be nearly bottomless,” the members of Congress wrote.

The letter was sent to Secretary Thomas E. Perez by the ranking members of the Senate and House labor, budget and finance committees and the subcommittees that deal with workplace safety and Social Security. In addition to Sanders, they include Sens. Patty Murray, Ron Wyden, Al Franken and Sherrod Brown and Reps. Bobby Scott, Chris Van Hollen, Sander Levin, Frederica Wilson and Xavier Becerra.

The Labor Department said in a statement that it was reviewing the letter but shared the members’ concerns.

“Every year injured workers and their families are bearing more and more of the cost of workplace injuries and illnesses,” the department said. “American workers and their families deserve the peace of mind that comes with knowing a workplace injury won’t knock them out of the middle class, and we look forward to working with stakeholders to find real solutions.”

As the minority party in Congress, Democratic lawmakers have had little success getting attention for their proposals. But in the last year, the Obama administration has used its authority aggressively on a range of workplace issues, including overtime, paid sick leave and the misclassification of employees as independent contractors.

In an interview, Scott, the ranking member on the House education and workforce committee, said the cost shifting to federal programs underscores that “there is a strong federal interest in making sure the workers’ comp programs pay appropriate benefits."

Scott said he was struck by harsh restrictions in the benefit plans of some companies that had opted out of workers’ comp, particularly one that requires employees to report an injury by the end of their shift or lose their benefits.

“A lot of people have injuries and they go home and think it will go away and it turns out to be a much more serious injury than they thought, “ he said. “So you have a person that has no benefits at all if we allow some of these things to continue.”

The lawmakers’ letter marks the most significant interest that Congress has shown in workers’ comp since the Labor Department stopped monitoring state laws in 2004. And it comes as Congress debates the solvency of the Social Security Disability trust fund, which is projected to run short of money next year as an increasing number of people receive federal assistance.

Workers’ comp — the nation’s system for dealing with workplace injuries — arose in the early 20th century as tragedies like the Triangle Shirtwaist Factory fire brought home the grisly consequences of industrialization. As a compact between labor and industry, workers gave up their right to sue their employers in exchange for a guarantee of prompt medical care and enough of their wages to get by while they recovered.

In 1972, a presidential commission created by the Occupational Safety and Health Act recommended a series of minimum standards that state workers’ comp programs should meet. Fearing that Congress would mandate the standards, nearly every state passed laws to improve their benefits.

For decades, the Labor Department kept track of states’ compliance with the federal recommendations — even though it lacked the authority to take action against states that did not comply. But budget cuts ended that.

ProPublica and NPR’s investigation found that, over the years, states had developed disparate methods for how employers must compensate injured workers and their families. The hodgepodge nature of workers’ comp has resulted in some startling discrepancies. Workers who lose limbs in similar accidents, for example, may receive dramatically different compensation based on which state they work in.

In the letter, the Democratic lawmakers said they “would welcome a report” from the Labor Department on how it would “reinstitute oversight” of state programs. They also said they would work with the Obama administration if it needs additional legislative authority to “better ensure that the interests of injured workers and taxpayers are protected.”

Several recent studies have estimated that workers’ comp covers only a fraction of the costs of workplace injuries and illnesses as government programs like Social Security Disability Insurance, Medicare and Medicaid pay about $30 billion a year for medical care and lost wages not covered by workers’ comp.

“An accumulating body of evidence shows that at least part of the growth in SSDI benefit payments is attributable to the program’s subsidy for work injuries and illnesses,” the federal Occupational Safety and Health Administration said in a March report.

In a study to be released later today, the Center for Economic and Policy Research, a left-leaning think tank, estimates that more than 20 percent of the rise in federal disability rolls can be explained by cuts to workers’ comp programs.

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