House Republicans Hear Business Complaints on Workers’ Comp, Unemployment Benefits

Republican lawmakers are expected to address the state’s workers’ compensation system next year and revisit the issue of extended unemployment benefits, based on a meeting of the GOP’s House small business task force in Nashville on Wednesday.

The task force heard anecdotal evidence of people who are currently accepting unemployment benefits but are not willing to apply for jobs. Democrats lobbied hard for an extension of unemployment benefits in the waning hours of negotiations on the state’s $30.8 billion budget passed in May.

But Democrats are not members of the House group that met Wednesday. The task force is comprised entirely of Republicans, who have a 64-34-1 majority in the House. The task force heard from several small business operators from across the state.

Workers’ compensation issues have come up frequently at business roundtables held by Gov. Bill Haslam, and the governor has said the matter should be addressed. Several people spoke of the workers’ comp issue at Wednesday’s meeting of legislators.

“We’re not (going) to get in front of the governor,” Rep. Jimmy Matlock, R-Lenoir City, chairman of the task force, said after the meeting. “We’re working hand in hand with them. What you’ll see come from this committee is recommendations back to the Assembly of what we heard today, what we’ve found out through our investigations.”

When asked if Tennesseans could expect to see workers’ comp legislation surface when the General Assembly convenes in January, Matlock said, “I think we will.”

Rep. Pat Marsh, R-Shelbyville, who is in the trucking business, said workers’ compensation insurance is one of the problems his business faces. Marsh introduced Raymond Farmer, vice president of the American Insurance Association, a trade group based in Atlanta, as an expert.

Farmer told the group his organization analyzes the insurance environment in different states and that Tennessee is a business-friendly state but that it should focus on workers’ compensation. Farmer said the state should reform its adjudication process, moving from a court-based approach to an administrative format.

“Tennessee is one of only three states, the others being Alabama and Oklahoma, with a cumbersome court-based approach to adjudicating workers’ comp claims,” Farmer said. “Although administrative systems can, and do, have their own shortcomings, eliminating a court-based approach is a significant step in the right direction for a system not based on fault, as is the court system.

“Tennessee should adopt a purely administrative system.”

Farmer said Tennessee currently reimburses based on multiple conversion factors that undermine the system by politicizing physician reimbursements and increasing medical costs, including pharmaceutical expenses. Farmer also said Tennessee should modernize its funding of the compensation system.

Wyatt Owens, a contractor from Paris, Tenn., said trouble with workers’ compensation is the biggest complaint he and other contractors have.

“The really biggest problem I have with it is Owens Construction has to be the policeman,” Owens said. “Every sub we hire, we’ve got to make sure they’ve got their paperwork right. We’ve got to make sure they pay their dues, they pay their whatever. And if we don’t do that, we’re penalized.”

Owens said he believes there should be workers’ compensation but that rules and auditors keep changing.

House Majority Leader Gerald McCormick formed the task force in July, saying the state needs to identify regulations that impede job growth. McCormick sat in the audience through much of Wednesday’s meeting, as did House Majority Caucus Leader Debra Maggart, who spoke briefly to the task force.

After the meeting, Matlock said there seems to be a common theme in the group’s work, including workers’ comp, unemployment benefits and job creation.

“We’ve got to get people incentivized to get back out and want to get back in the workplace,” Matlock said.

“What these business owners are telling us is, ‘Folks, there are some barriers out here. There are some things that are causing us not to take risk, not to get out and look for employees, because there is this overwhelming data that shows us we’ve got too many pages of issues we’ve got to compile, too many things we’ve got to, as business owners, be responsible for.’

“And at the end of the day it’s all about job creation. It’s all about seeing our communities grow.”

Matlock said he opposed extension of unemployment benefits this year but emphasized that he is just one member of the Legislature. Rep. Steve McManus, R-Cordova, said he voted for it.

“There really are an awful lot of people out there that are just trying so hard to work,” McManus said. “Yet today it was so interesting that we heard that people are turning work down when they’re unemployed.”

McManus said he believes the group’s homework is just beginning. He said there is a need to distinguish between state regulations and federal regulations and then get specific with state regulations that are hurting businesses.

“We write an awful lot of legislation up here. It’s time to rescind some of this legislation, too,” McManus said.