CALPASC Views Workers' Comp Reform As "Dodging A Bullet" In Battle Against The Underground Economy

SACRAMENTO, Calif., Sept. 19, 2012 /PRNewswire/ -- The Governor's signature on Senate Bill 863 (SB 863) caps off an enormous effort by employers and labor groups, including the California Professional Association of Specialty Contractors (CALPASC), who watched nervously as the bill moved through the Legislature. During the last day of the legislative session, SB 863, co-authored by Senator Kevin de Leon and Assemblymember Jose Solorio, moved through the Assembly Insurance Committee, passed out of the Assembly, moved to the Senate Labor and Industrial Relations Committee and passed out of the Senate just two hours before the deadline, making its way to the Governor's desk. Had the bill not been signed by the Governor, law-abiding construction contractors would have seen their insurance premiums skyrocket while being forced to compete with illegitimate contractors in the underground economy.

The bill includes increased benefits to injured workers and lower than expected workers' compensation premium costs for California employers, if they engage their brokers to aggressively work with insurers. Some employers facing renewals in October 2012 were quoted as much as a 50 percent increase in premium costs, before this reform. CALPASC coordinated and participated in visits between employers and legislators and their staff and also provided background analysis and information about the bill.

CALPASC's Director of Risk Management, Bruce Wick stated:

"The Governor's signature on SB 863 is a tremendous victory! Had this reform not come to fruition, the underground economy would have seen a real boost! 

"Without the passage of SB 863, employees would not receive the benefits they deserve, and lawful contractors would see an astronomical increase in workers' compensation premium costs with no end in sight.

"Meanwhile, contractors who scam the workers' compensation system by not paying their insurance premiums would continue to bid lower on construction projects, resulting in legitimate contractors losing the projects. 

"Fighting the underground economy takes tremendous focus and multiple tactics. CALPASC has repeatedly called for a level playing field for contractors who abide by the law. This reform package creates a more level playing field.

"We are grateful to the co-authors of SB 863, Senator Kevin de Leon and Assemblymember Jose Solorio, for successfully carrying this monumental bill through the Legislature.

"This legislation took months to craft. We acknowledge the Governor and his administration for supporting this effort and particularly appreciate the California Department of Industrial Relations Director, Christine Baker for keeping the two most important parties in mind, namely California employees and employers."

SOURCE California Professional Association of Specialty Contractors (CALPASC)