HOUSE BILL REPORT

HB 1574

BYRepresentatives Wang, R. King, Cole, Belcher, Fisher, Sayan, Patrick, Heavey and Anderson

Revising schedule for payment of workers' compensation.

House Committe on Commerce & Labor

Majority Report:  Do pass.  (7)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien and Sayan.

Minority Report:  Do not pass.  (4)

      Signed by Representatives Patrick, Sanders, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR FEBRUARY 5, 1988

BACKGROUND:

The amount of basic workers' compensation disability and death benefits paid monthly to workers or beneficiaries is based on a schedule that varies depending on the marital status of the worker and the number of children.  The amount is limited by statute to seventy-five percent of the state average monthly wage.  Minimum amounts are also established in the dependent schedule.

The disability benefits received by an injured worker are based on the worker's monthly wages at the time of injury. The law excludes tips, as well as overtime pay and gratuities, from the calculation of the worker's monthly wages.

In addition to monthly payments, surviving spouses or other qualified relatives of a deceased worker receive a lump sum of $1,600 at the death of the worker.  Upon remarriage the monthly pension ceases, but a surviving spouse may settle his or her remaining benefit claim by receiving either: (1) a lump sum of $7,500;  or (2) 50 percent of the value of the remaining pension annuity, whichever is less.

Compensation for an occupational disease claim is based on the payment schedule that was in effect at the time the worker contracted the disease or was last exposed to injurious substances.  For many occupational diseases, the disease does not manifest itself for many years after the date that the worker was last exposed to the injurious substance. 

If a worker is awarded a permanent partial disability award based on a back injury that does not have marked objective clinical findings, the award is automatically reduced by twenty-five percent.

SUMMARY:

The schedule is deleted that bases workers' compensation disability and death benefits and minimum benefits on the number of dependents of the injured worker.  The basic disability or death benefit monthly payment to an injured worker or surviving spouse is established at 70 percent of the injured worker's wages at the time of injury. The minimum benefit is established at 50 percent of the state average monthly wage (SAMW) or 50 percent of the worker's monthly wage at injury if the worker's monthly wage is less than SAMW.  The maximum monthly benefit payable is increased from 75 percent of SAMW to 100 percent of SAMW beginning July 1, 1988, to 150 percent of SAMW beginning July 1, 1990 and to 200 percent of SAMW, beginning July 1, 1992.

The lump sum payment to a surviving spouse or other qualified relatives is changed from $1,600 to an amount equal to the workers' monthly wage.  One of the settlement options provided for a surviving spouse is changed from $7,500 to an amount equal to 24 times the monthly pension.

Beginning with wages paid on or after January 1, 1988, the definition of "wages" for the purpose of determining the monthly wages on which to compute an injured worker's industrial insurance benefits is amended to include tips, to the extent that tips are reported to the employer for federal income tax purposes. The inclusion of board, housing, fuel and other similar consideration in the definition of wages is clarified by adding that these must be received from the employer as part of the contract of hire.

The rate of compensation for occupational disease claims filed on or after July 1, 1987, is established as of the date that the disease requires medical treatment or becomes disabling, whichever occurs first, without regard to the date on which the disease was contracted or the date the claim was filed.

The reduction in the permanent partial disability award for back injuries that do not have marked objective clinical findings is deleted.

Technical changes are made to remove references to the compensation payable for children, in conformity with the deletion of the dependent schedule. The lien authority of the Department of Social and Health Services to attach benefit payments for the purposes of child support enforcement is amended to allow attachment of 2 percent of temporary and total disability payments for each child of the worker and 40 percent of the partial disability payment made to the worker.  It is clarified that death benefit payments made on behalf of a child of a deceased worker are to be made to the person having legal custody of the child.

Fiscal Note:      Requested February 1, 1988.

House Committee ‑ Testified For:    Larry Kenney, Washington State Labor Council; Joe Albo, Washington State Trial Lawyers;  and Gail Mayes and Bob Sevart, Injured Workers Awareness Coalition (with concerns).

House Committee - Testified Against:      Clif Finch, Association of Washington Business; and Marlin Sande, Washington Self Insurers Association.

House Committee - Testimony For:    The industrial insurance trust funds have reached solvency, in part because of benefit reductions in recent years.  The current benefit structure for injured workers is inequitable because highly paid workers are penalized.  The bill includes provisions that were recommended to the states by a national workers' compensation commission in 1972.

House Committee - Testimony Against:      Any increases in injured worker benefits should be balanced by measures that will reduce the administrative costs of the workers' compensation system.