The Labor Lows: Struggling With Workers’ Compensation

Small-business owners across the nation share the same
concerns when it comes to the welfare of their
business, and one of those concerns is the cost of
workers’ compensation. The latest edition of the NFIB
Small-Business Problems and Priorities report shows
that issues related to workers’ compensation are the
third biggest problem facing small-business owners
today, topped only by the cost of health insurance and
the cost and availability of liability insurance. But
it hasn’t always been that way.

In the last Problems and Priorities report, which was
released in 2001, workers’ compensation ranked as the
seventh highest concern facing small-business owners,
with only 21 percent of respondents calling it a
critical problem. In this year’s survey, the percentage
of respondents calling workers’ compensation a critical
problem jumped to 32.8 percent.

While every state has a different system, the concern
across the nation remains the same: premiums for
workers’ compensation are spiraling out of control.
California boasts the highest workers’ compensation
premiums, with businesses there paying almost three
times the national average for workers’ compensation
premiums. The New York Times recently told the story of
a local California grocer, which, after more than 70
years in business, had to shut down because workers’
compensation premiums were too much to bear. In 2003,
the cost to cover Pioneer Super Market’s 68 employees
was $240,000, a 400 percent increase over its premium
in 2000.

While workers’ compensation doesn’t get more expensive
than in California, states like Florida and Hawaii,
which boast the second and third highest rates in the
country, and Washington and New York, are not far
behind.

So why are premiums so high? Driving up the cost of
workers’ compensation insurance are increased medical
costs, increased claims — as well as fraudulent injury
claims that often end up in court — the cost of
litigation and exorbitant administrative costs.

With so many factors contributing to the third biggest
problem facing small business, it makes reforming
workers’ compensation a more difficult battle to wage,
but it doesn’t make it an impossible fight. NFIB is
representing small business in the capitals of all 50
states, but we need your help.

Be Heard.
Contact your lawmakers as well as your state workers’
compensation agency and tell them that small business
needs workers’ compensation reform and lower premiums
in order to stay in business.

Also, NFIB is always looking for small-business members
to testify before legislative committees and other
policymakers on behalf of Main Street. If you are
interested in testifying on how workers’ compensation
system in your state affects your business, contact
your NFIB state director.

Be Connected.

Get more ideas and solutions for workers’ compensation
all week on NFIB.com.

To read this and other related articles online, visit:
http://www.nfib.com/object/IO_17851.html