Workers’ comp costs going
up–Chamber
to action
By Heather Milo
Acorn Staff Writer

The Thousand Oaks/Westlake Regional Chamber of Commerce Government Relations Committee (GRC) issued a call to action recently regarding workers’ compensation reform and healthcare legislation.

To pay for soaring workers’ compensation costs, businesses throughout California have been forced to cut back, which means fewer jobs and slower economic recovery.

"Everybody’s workers’ comp is going to go up," said the GRC’s Jan Smith. Since Oct. 12 is the last day for Gov. Gray Davis to sign bills, Smith predicted that certain bills will be pushed through quickly.

But the call for reform on workers’ comp needs to happen now—before Oct. 12, Smith said.

At a recent forum on workers’ compensation, local business owner Mary Troness said that even having one employee requires a workers’ compensation program. The problem is that there’s no flexibility with workers’ compensation. Troness’ cleaning business, for example, is categorized the same as janitorial services. Those companies have employees who climb ladders and go into rafters.

"We’re (just) handling vacuum cleaners," she said. But the rate for workers’ compensation among janitorial services can be as high as 30 percent, according to Troness.

"You, the customer—you’re going to be paying the bill."

In some cases, the costs of doing business are skyrocketing as much as 400 percent. Many small businesses just can’t afford it.

Ironically, in the last six to 10 years, major businesses in California have been financing the most liberal candidates of the Democratic Party—those who’ve supported small businesses the least.

Of $1.5 million in campaign contributions given by big businesses in the state, 92 percent of those contributions went to Davis for his reelection campaign last November. AT&T gave $180,000 to Davis and nothing to the campaign of his Republican challenger, Bill Simon. Walt Disney gave $125,000 to Davis and nothing to Simon. SBC gave $65,000 to Davis, none to Simon.

Sacramento small business lobbyist Robert Giovati said that most businesses didn’t previously pay a flat rate in workers’ compensation costs. Discounts were available for offering such benefits as a health plan. "A $4 base rate could be reduced to $2.75 with discounts. Now that rates have gone up, they didn’t go from $4 to $11.30; they went from $2.75 to $11.30, so the pain is more."

Not only can business owners ill afford workers’ comp, the state legislature’s view of business openings and closures overlooks the stagnant economy and layoffs, Giovati said.

Lyn Perry, a director and later chairman of the Westlake Chamber of Commerce, said that small entrepreneurs make up 98 percent of businesses in California. He owns Wilshire Home Entertainment.

Health costs are also a sticky issue for small business owners who face their employees every day, whereas big businesses reveal their insurance issues on a quarterly basis in printed reports.

"Healthcare is a good thing. But it’s mandated at this point," said Smith, adding that some people can’t afford to provide healthcare right now while very small companies are being inundated with regulations. "I think most people want to provide healthcare," she said.

One GRC member reported that half of small businesses locally have 14 employees or less and healthcare legislation forces them to stand pat and avoid expansion because they can’t afford it. Consumers will have to pay higher prices so businesses can stay in business.

The Chamber believes that these financial pressures are driving people away from California. "More people are leaving than coming in," Smith said.

Local business owners are urged to become more involved in the legislative process by sending letters to state senators and Assembly members. For sample letters, call the Sacramento Chamber of Commerce at (916) 444-6670 or see the Internet Website at www.calchamber.com.

The Thousand Oaks/Westlake Chamber has already sent letters to committee members. Smith emphasized it was critical for individuals to send out letters, too, and to send copies to Gov. Davis.