OLYMPIA – An agreement on offering settlements to injured workers could remove one of the main obstacles to the Legislature passing a budget for the next two years.
Gov. Chris Gregoire and the leaders of both parties in both chambers said Sunday evening they had hammered out a deal on a major overhaul of the state’s workers’ compensation system that will save $500 million in 2012 and $1.1 billion through 2015.
Key to the agreement was a plan to offer “structured settlements” to seriously injured workers age 55 and older. Those workers would be able to negotiate settlements to be paid over time through a formula tied to average state wages; in exchange, they would forgo pensions and state-funded retraining programs now available.
The age limit would be dropped to 53 in 2015 and 50 in 2016.
“It’s not an annuity,” Gregoire stressed. Injured workers would not be able to sell their settlement to someone else for a lump sum payment; companies that try to coerce an injured worker into accepting a settlement would face penalties.
Senate Majority Leader Lisa Brown, D-Spokane, called it the largest reform in history to the 100-year-old workers’ compensation system that maintains protections for workers.
“This is a fair deal for everyone involved,” said House Speaker Frank Chopp, D-Seattle.
State Sen. Janéa Holmquist Newbry, of Moses Lake, a leader for Senate Republicans in negotiations, called it a “baby step towards real reform” and said she wished it went farther to bring down costs.
The bill also contains a one-year freeze on cost-of-living adjustments on pensions and changes to the way pensions are calculated for workers who previously received disability benefits. The changes would avoid 12 percent rate hikes facing employers this year as well as another double-digit increase in 2012.
Gregoire called it one of the most “contentious, complex and difficult issues” of the session.
It kept leaders at the bargaining table for hours.
“The last three days were the most intense of my life,” said Senate Minority Leader Mike Hewitt, R-Walla Walla. Chopp and other House Democrats had resisted lump-sum payments that were part of earlier proposals. But a majority of members of both parties, in both chambers, are expected to vote for the proposal, which could come to a vote in the House early today and a Senate vote this evening. Details of a budget agreement also could be announced today.
Organized labor opposes settlements and believes that businesses will still find ways to pressure workers into accepting amounts less than they would receive under the state’s current system. The state’s voters rejected changes to the workers’ compensation system last year, union leaders said.
The Association of Washington Business called the agreement good news for businesses facing rate increases, but saw it as only a partial solution.
“Voluntary settlements will provide some systemic relief, but this agreement cannot be the last step in the journey toward reform,” Don Brunell, association president, said in a prepared statement.