District employers, angered by the passage of a new city workers' compensation measure that would force them to pay higher benefits, began yesterday to seek ways to challenge the bill either through legal or administrative means.
The legislation, which Mayor Marion S. Barry is expected to sign, would improve benefits to workers injured on the job, and in the view of employers unnecessarily raises costs at a time when many companies can ill afford it.
Patrick Kenny of the Greater Washington Board of Trade said his group is "extremely distressed" that the bill passed, and charged that "this legislation will have an adverse impact on the cost of operating a business in the greater Washington region."
According to the Board of Trade, workers compensation costs in the city are already sharply higher -- 100 percent to 200 percent in some job categories -- than in Maryland and Virginia, and the new bill would boost costs in the District by another 11.3 percent.
Workers compensation is insurance that employers must provide to cover medical costs, lost wages and other costs for employees who are injured on the job. During the late 1970s, the District's benefits were widely regarded as out of line with those of surrounding jurisdictions and a burden on employers in the District. The city's law was rewritten at that time over the objections of labor, which has been working hard since then to restore the benefits.
"We have worked nonstop for the last 3 1/2 years," said Ron Richardson of the Hotel and Restaurant Workers Union. " ... We are ecstatic."
While the bill was modified considerably to meet business objections, it still contains provisions the Board of Trade and others argue will be very costly. Among them:
The bill extends the reach of the District's law to more workers who do not work full time in the city. Currently, an employee must work more than half his or her time in the city to qualify for benefits under the District law. The new law would allow any worker injured on the job while in the city to qualify for benefits. And because D.C. benefit scales are more generous than those of the surrounding suburbs, this provision is expected to boost costs of suburban, as well as D.C., employers.
It would require employers to pay for medical insurance for up to 52 weeks while a worker is off the job because of injury.
It would fix the wage-replacement formula at two-thirds of the average pay for the type of job the worker was doing, and where the worker cannot return to his or her former job but can do a lesser-paying one, it indexes the wage-replacement formula.
Other provisions allow workers to choose their own doctors, instead of selecting from a pool, and impose penalties on insurers that are slow to pay or that disallow claims in bad faith.
The Board of Trade is considering a court challenge to the medical insurance requirement on the grounds that federal law preempts such local measures. Other cost-cutting possibilities include seeking to curb increases in insurance premiums and taking advantage of a provision allowing special reviews of whether certain kinds of treatment are necessary. If these measures are successful, officials are hopeful that they can hold the cost increase to "single digits."
The hotel workers' Richardson said that the arguments that led the City Council to cut benefits years ago were "phony baloney" and that if the Board of Trade "spent one-tenth as much money trying to bring new business and tourists to Washington" as in fighting such laws as this, "we'd all be better off."