Webb Brown - October 23, 2008
Montana Chamber of Commerce
Work Comp Rates
If you ask small business people about their top financial concerns, you will undoubtedly hear about Montana’s high workers’ compensation rates. According to a national study, Montana has the 5th highest work comp premium rates in the entire country. These rates put us at a competitive disadvantage with our neighboring states, who have some of the lowest rates in the country. In some cases, small businesses are paying more in work comp premiums than they are in taxes.
This is simply unacceptable. If Montana wants its small businesses to stay competitive and provide the jobs Montana families need for tomorrow, we have to get our work comp system under control.
Over the past few years, experts have identified areas for improvement in our work comp system. For example, many small businesses have to get more serious about safety in the workplace. As a state, we injure more people in every industry sector compared to the national average. The Montana Chamber is taking a lead role in safety on the job.
One other issue has the potential to be a huge hit to our work comp system in Montana. It’s a court case called Satterlee that is currently being appealed to the Montana Supreme Court. In this case, the plaintiffs have asked the Court to throw out an important statute passed by the Legislature many, many years ago. The statute simply says that once a person has reached retirement age, they will no longer receive work comp wages.
There are a number of reasons the Legislature made this decision to close out work comp at retirement. First, the workers’ compensation system was set up to replace the income of people injured on the job. If people have reached retirement age, they should no longer look to the work comp system to replace their work income.
Second, overturning the statute would allow a “double-dipping” of sorts, where people receive both retirement benefits and work comp benefits. Since employers pay for both work comp insurance and retirement benefits, like social security, Montana small businesses will be on the hook twice for people who receive both.
A decision favoring the plaintiffs in the case would damage many Montana small businesses beyond repair. The costs to small businesses are estimated in the hundreds of millions of dollars. Not only that, but the state of Montana, which is responsible for the Old Fund, would have to pay out over one hundred million dollars in back payments to people who have reached retirement age. Needless to say, Montana small businesses are watching this case and hope the Montana Supreme Court will uphold the statute as passed by the Legislature and upheld by the lower court.
Two weeks ago, the State Chamber filed a motion to intervene in the Satterlee case. Last week the Montana Supreme Court granted the motion, which will allow the Chamber to file a “friend of the Court” brief explaining why the statute should be upheld, and how this case could have a detrimental impact to many Montana small businesses.
In addition, the Montana Chamber will push for the introduction of legislation in the next legislative session to reform Montana’s work comp system. We want safe workplaces, a fair work comp system, and incentives for injured workers to return to their jobs.
If Montana wants to see long-term, sustainable growth of the economy, where regular Montanans can find good-paying careers in their towns, we must deal with the issues that affect small businesses.
That is why we have put together a package of pro-active ideas called the Montana Prosperity Plan. The plan proposes ideas in a variety of different issues, including energy development, health care, tax simplification, affordable workforce housing, quality education, legal reform, work comp and government reform.
To see the Montana Chamber’s Prosperity Plan, visit our website: www.montanachamber.com. We look forward to this next legislative session, when we will bring forward these ideas to push for long-term sustainable growth of our state’s economy.
Montana’s small businesses are facing uncertain times in coming months, they don’t need an adverse ruling on Satterlee to put them over the edge.
This is Webb Brown, President/CEO of the Montana Chamber of Commerce asking you to keep up the good work.
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