Workers’ Comp Rate Goes Into Effect
By: Florida Chamber of Commerce
Total Costs Resulting From Court Rulings to Top $1.5 Billion
Today, December 1, 2016, workers’ compensation rates will increase by 14.5 percent for all new and renewal policies, an increase which equates essentially to a $1.5 billion transfer of wealth from Florida businesses to trial lawyers the Florida Chamber of Commerce said.
“Today, job creators across Florida are opening their doors and facing a $1.5 billion tab that is not about employee safety or protecting workers, but about increasing compensation for plaintiff trial lawyers,” said CAROLYN JOHNSON, Director of Business, Economic Development & Innovation Policy for the Florida Chamber of Commerce.
Prior to the Thanksgiving holiday, a Leon Circuit Court judge voided the 14.5 percent rate increase under the grounds that the National Council on Compensation Insurance and the Office of Insurance Regulation did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, meaning the rate increase will take effect today.
“Many businesses are telling us they will be forced to delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” said JOHNSON. “A rate like this puts Florida’s competitiveness and job creation directly at risk.”
According to research from a Florida Chamber Workers’ Compensation Task Force survey, of the businesses impacted by the rate increase, 90 percent said the impact is significant. An overwhelming 96 percent of those surveyed believe that the Florida Legislature should take action to remedy the Supreme Court decisions that resulted in a 14.5 percent increase.
This $1.5 billion increase is the result of two Florida Supreme Court decisions earlier this year declaring portions of Florida’s workers’ comp system unconstitutional. In one case in particular, the plaintiff argued that the plaintiff trial lawyer should receive $38,000 in attorney fees for a case in which the injured worker was awarded only $800. That’s $800 for the injured worker and $38,000 for the trial lawyer. This accounts for nearly two-thirds of the rate increase. And although the rate officially increases today, since the decision in April, the number of lawsuits and trial lawyer pay-days have already increased.
The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. As a result, workers’ comp rates were lowered by more than 60 percent in the last 13 years, and injured workers returned to work 10 days faster. Those efforts continue today with the Florida Chamber’s Workers’ Compensation Task Force, which is working to secure a legislative fix.
In Case You Missed It:
- Let’s Fix Workers’ Comp in Florida, (Tampa Bay Times, September 30, 2016)
- Florida’s Supreme Court Rulings Are Wrecking Workers’ Comp System (Bradenton Herald, October 8, 2016)
- Rising Workers’ comp Rates Hurt Businesses (Florida Politics, October 10, 2016)
- Judge voids 14.5 percent workers’ comp rate increase (Florida Politics, November 23, 2016)
- Senator Bill Galvano and Representative Kathleen Passidomo Discuss Workers’ Comp (Florida Chamber’s Bottom Line, September 29, 2016)