The Costs of Doing Business

Several more workers comp bills were considered this week. I went to the table in opposition to two of them specifically.

The first, AB 511, came up on Monday in Assembly Commerce and Labor. This bill would allow employees to sue their employer for “bad faith” claims outside of the workers comp system. Current law specifies that the workers comp system is the “exclusive remedy” for employees and does not allow lawsuits for bad faith.

The second bill, SB 366, was heard in Senate Commerce and Labor today. Committee Chair Maggie Carlton amended the original bill so that it does not seem nearly as onerous as the original, which would have required employers to prove that an accident did not happen at work. Current law requires the employee to prove that it did. Unless an employer has video cameras that cover every inch of his property and they are running 24/7, there is no way for him to definitively prove that something did not happen.

Of course, any time you introduce the potential for increased and frivolous lawsuits into the system, costs WILL go up. Just as the med-mal discussion below, these lawsuits would be factored into the costs of workers comp policies and will have to be paid for by all Nevada employers.

Unlike health insurance coverage, employers are required to have workers comp insurance. The increased cost will have to come from somewhere. That may mean that a small employer can no longer afford health insurance for his employees, or those employees will have to pay more for their health coverage, or those employees may not have a place to work anymore!

To use a cliché, these bills and the med-mal issue seem to throw the baby out with the bath water. They try to attack the problem of bad actors by punishing everybody in the system. If there are a few insurance companies who are not treating workers comp claims with the seriousness that they deserve, then we should beef up our regulatory agencies to ensure that they do.

We must find a way to punish the bad folks, without sinking everybody else.

Once concern that several of the business lobbyists in the building have is that there is no holistic view of bills and issues that could negatively affect business.

We are dealing with health care coverage mandates, workers comp, med-mal, and whatever potential tax package is being cooked up. Each bill by itself may not be that bad, but all of the bills taken cumulatively spell trouble.

I have started making the same point each time I testify on one of these issues: Our members cannot take much more. Please do not put each of these bills into a separate bubble. We must look at all of these issues as a whole and ensure that we do not do more harm than good.