Farm safety has commanded a lot of attention recently. Regulatory devices such as Senate Bill 198, industrial safety orders, and the new EPA worker protection standard, some major attention getters, are designed to help prevent occupational injuries and illnesses. Despite them, however, people do sometimes get hurt or sick in connection with employment, and it is our public policy to look after them.
The main vehicle for doing so, in all the United States as in other industrialized nations, is the workers' compensation (WC) system. It operates on a "no fault" basis and is set up to be the full and exclusive remedy for workplace injuries. Employers have to have WC insurance, but it protects them from uncertain liability, as it also protects workers from costs of remedial care and foregone income while disabled. Workers' compensation insurance has been compulsory in California since 1914, and farm workers are covered by it in some 40 states. For most farmers in California, the WC insurance premium is the largest single indirect labor cost.
As their premium rates were going higher faster in the 1980s, agricultural employers, like others, increasingly came to the conclusion that something was wrong with the system. In many states with similar experience, attempts were then under way to bring rising costs under control. By the time reform discussions began in earnest here, the number of claims, expense of related medical payments, and costs of litigation had grown dramatically, and our legislators were hearing the sirens. One of the evident problems was fraud and abuse of the system - people filing claims to get benefits they did not deserve, and others helping them for a piece of the action. The legislature's first move was an anti-fraud bill effective January 1992.
More comprehensive reform was enacted in a package of seven bills last summer. Its provisions have various effective dates, only a few of which have already been reached, and they require development of many implementing regulations and procedures. There remains considerable uncertainty about the rules, no less how people will respond to them.
Unlike abundant labor laws that directly touch agricultural employers, the WC reform legislation does not key on additional mandates and prohibitions for them. Instead, it affects farmers by profoundly changing an important part of their business environment. The obligation to provide employees with WC insurance remains the same, but the legal demands on and opportunities for their insurance carriers are quite altered. The new requirements, limits, and incentives will translate into a different insurance market for farmers. For now they form a complicated picture that is worth trying to comprehend.
As employers prepare to make their choices under the new WC structure, they need to understand basic elements of the reform statutes, development of regulations, and adjustments being made by insurance carriers. Because the WC system affects every agricultural employer and worker, this issue of Labor Management Decisions is devoted to a closer examination of the reforms enacted in 1993 and their implications.
People from a variety of perspectives who are knowledgeable about the emerging changes present their views in these pages. We invite readers to contribute, for publication in subsequent issues, additional thoughts and accounts of experience with the unfolding realities of WC reform.
Editors of this special report are Howard R. Rosenberg, Norman J. Hetland,
and Betsey H. Tabraham.