The Commission on Health and Safety and Workers’ Compensation (CHSWC) has released its twenty-first Annual Report of its activities to improve vital programs affecting nearly all Californians. The 313 page 2015 Annual Report presents information about the health and safety and workers’ compensation systems in California and makes recommendations to improve their operations. CHSWC, created by the workers’ compensation reform legislation of 1993, is charged with examining the health and safety and workers’ compensation systems in California and recommending administrative or legislative modifications to improve its operations.

Senate Bill (SB) 863, the workers’ compensation reform legislation passed in 2012, incorporated many of CHSWC’s previous recommendations for statutory improvements in the workers’ compensation system, and the Division of Workers’ Compensation (DWC) is carrying out many of the commission’s recommendations for administrative improvements.

But not all of past CHSWC recommendations have had success. Suggestions have been made to integrate workers’ compensation medical care with the general medical care provided to patients by group health insurers in order to improve the quality and coordination of care, reduce overall medical expenditure and administrative costs, and derive other efficiencies in care. Research also supports the contention that an integrated 24-hour care system has the potential to create medical cost savings as well as shorten the duration of disability for workers. So far this ongoing annual suggestion has been a non-starter.

CHSWC continues to report unrelenting systemic fraud. By misreporting payroll costs, some employers avoid the higher premiums they would incur with accurate reporting of their payroll. Employers can also misreport total payroll or the number of workers in specific high-risk, high-premium occupation classifications by reporting them in lower-risk, lower-premium occupations. An earlier study by CHSWC found that between $15 billion and $68 billion of payroll is underreported annually.

Although most California businesses comply with laws regarding health, safety, and workers’ compensation, some businesses do not and thus operate in the “underground economy.” Such businesses may not have all their employees on the official company payroll or may not report wages paid to employees that reflect their real job duties. The underground economy costs the state economy an estimated $8.5 billion to $10 billion in tax revenues every year.

CHSWC identified an ongoing problem with the definition of first aid. Injuries that do not require treatment beyond first aid do not necessitate an employer report of injury for worker’s compensation or a Cal/OSHA log. The definitions of first aid for those two purposes are different, however, leading to some uncertainty about when a minor injury is reportable. Even criminal evasion of workers’ compensation obligations can hide behind that uncertainty. Employers have identified the conflicting definitions as a barrier to compliance, and prosecutors have identified the conflicting definitions as a barrier to prosecution of willful violations. The definition of first aid is pertinent only to reporting requirements, so a change in the definition would not change an injured workers’ right to receive treatment.

Information about CHSWC and the 2015 Annual Report is available on the CHSWC website.