, Muskogee, OK


November 27, 2012

Workers’ comp needs scrutiny

Oklahoma Labor Commissioner Mark Costello makes a good point that the state’s workers’ compensation system is costly.

Oklahoma’s index rate of $2.77 workers’ comp premiums for every $100 spent in payroll is the highest in our region.

That’s true, according to the Oregon Department of Consumer & Business Services. Oklahoma is 89 cents higher than any state that touches our borders.

Costello says that is because we have an adversarial system of workers’ comp, which basically means that both employer and employee need lawyers to settle whether a worker deserves workers’ compensation for an on-job injury.

Costello boils the workers’ comp reform issue down to one slogan: “It’s workers’ comp, not lawyers’ comp.”

That’s catchy, but there are no guarantees what Costello is selling is worth buying

Costello says workers’ comp costs make Oklahoma less desirable to out-of-state employers.

That’s debatable.

There are so many more factors that a good business owner would consider in factoring the cost of business in any state.

Shovel-ready property, a skilled and ready workforce, and a good business environment at both local and state levels are just three of the factors business owners consider.

What we find most interesting in the argument to switch to an administrative system is that Oklahoma and Nebraska are the only two states in the union that have an adversarial workers’ comp system. And Nebraska’s workers’ comp index is substantially lower than Oklahoma’s.

Either we are innovative leaders in workers’ comp or we trail miserably behind the 48 states that have a different system.

The state should try to find out why business owners must pay more in workers’ comp premiums than our neighbors.

We should also listen to business owners to determine whether lower premiums would mean more jobs.

A company with a $2 million payroll would save approximately $18,000 per year in premiums if the state’s workers’ comp index dropped to that of New Mexico. That’s not enough to fund one additional job.

Business owners go where they can make the most money. Workers’ comp is one part of the equation.

But it is a part that should be made more economically efficient.

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