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Business lobby blasts workers’ comp rate hike

in Statewide/Top Headlines by

The state’s business groups are saying “we told you so” over the cost of workers’ compensation insurance.

The National Council on Compensation Insurance (NCCI) has asked the state to consider a 17 percent rate hike in the cost of workers’ comp to employers. Workers’ comp is mandated by states to pay workers who get hurt on the job.

The council submitted its filing to the Office of Insurance Regulation on Friday. If approved, it would take effect Aug. 1.

That would collectively cost Florida businesses roughly $623 million and make the Sunshine State the costliest in the southeast part of the country to buy such insurance, according to the NCCI’s news release.

The organization directly attributed the increase to a Florida Supreme Court decision, Castellanos v. Next Door Company, which struck down Florida’s workers’ compensation law’s legal fee schedule as unconstitutional.

Its 5-2 decision noted that the plaintiff’s lawyer was only paid the equivalent of $1.53 an hour for working on his workers’ comp case.

The schedule basically amounted to caps on how much lawyers could make: For instance, twenty percent of the first $5,000; 15 percent of the next $5,000 and 10 percent of the remaining amount of benefits they helped secure.

After the Castellanos decision came out on April 28, business interests and others cried foul on social media.

Tamela Perdue, general counsel of the Associated Industries of Florida business lobby, tweeted that workers’ compensation “rates will be significantly impacted by this ruling.” She sits on the state’s Workers’ Compensation Panel.

Friday’s filing serves as critics’ chickens-coming-home-to-roost moment.

The Florida Chamber of Commerce quickly sent out a statement “encourag(ing) the Florida Legislature to put small businesses and injured workers before personal injury trial lawyers through whatever means necessary.”

“We’ve led efforts for more than 10 years to help lower workers’ comp rates by almost 60 percent, and now that personal injury trial lawyers and an activist court are forcing rates to likely skyrocket, we’re not about to back down,” Mark Wilson, the Chamber’s president and CEO, said.

“The Florida Chamber will lead the charge to ensure small businesses aren’t crushed under the weight of increased workers’ comp rates, and that workers’ have access to quality health care so they can return quickly back to work,” he added.

Meantime, Associated Industries said the rate hike was “a threat to Florida’s continued economic growth (that) will quickly tarnish the state’s successful business climate.”

“Today’s workers’ compensation rate increase filing by NCCI comes as no surprise,” AIF president & CEO Tom Feeney said. “We warned that the unbridled hourly rate attorney fees the decision permitted would trigger a significant increase that directly hurts all Florida employers and will hamper continued job creation.”

The group also announced a “Helping Florida Work” town hall tour in Jacksonville, Tampa and Miami in June-July. The goal: “To foster ideas and initiatives that tackle the threats now facing Florida’s workers’ compensation system,” Feeney said.

Before joining Florida Politics, journalist and attorney James Rosica was state government reporter for The Tampa Tribune. He attended journalism school in Washington, D.C., working at dailies and weekly papers in Philadelphia after graduation. Rosica joined the Tallahassee Democrat in 1997, later moving to the courts beat, where he reported on the 2000 presidential recount. In 2005, Rosica left journalism to attend law school in Philadelphia, afterwards working part time for a public-interest law firm. Returning to writing, he covered three legislative sessions in Tallahassee for The Associated Press, before joining the Tribune’s re-opened Tallahassee bureau in 2013. He can be reached at jim@floridapolitics.com.

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