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Union groups fight TN workers' comp overhaul

7:50 AM, Apr 9, 2013   |    comments
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By Nate Rau, The Tennessean

Union groups on Monday blasted Gov. Bill Haslam's plan to create a new workers' compensation office and place it under the troubled Department of Labor and Workforce Development.

The Haslam administration is pushing legislation to overhaul worker's comp and effectively create a new division of state government, which would share administrative services with the Department of Labor. Critics say the proposal comes at a bad time, because the labor department is already struggling to carry out one of its core functions - distributing unemployment benefits.

An audit released last month showed the department had issued $73 million in overpayments in recent years and failed to monitor fraud and abuse of unemployment benefits. The stressed unemployment system has seen its customer service dip to a recent low with thousands of out-of-work Tennesseans waiting months for their initial unemployment checks, according to the audit.

"We are calling on the governor to put the brakes on moving such a vital process for injured Tennessee workers into the most dysfunctional department in the state," the Tennessee AFL-CIO Labor Council said in a statement. "This audit showed problems in multiple divisions of the department, not just in the Unemployment Insurance division."

The bill, which has already cleared the Senate and is progressing in the House, would completely overhaul the workers' comp program by moving claims out of the courts and into a new administrative system that would be under the labor department's umbrella.

According to the bill, the new review positions would be a separate functioning division under the Department of Labor except for administrative matters.

State Rep. Glen Casada, R-Franklin, said critics were overstating the labor department's role. The bill calls for adding administrative law judges and other positions to operate the program. The new program would largely be covered by revenue generated by higher fees charged to those making claims.

The labor groups "may not understand what we're setting up," Casada said. "The Department of Labor would not oversee what we're going to put in place. There would be judges, ombudsmen appointed to handle the workers' comp reform. Those who are employed in the Department of Labor would not be overseeing it."

Fix said to be in works

The labor department, which has seen several of its top officials resign in recent weeks, said in its response to the Comptroller's audit that it would offer a plan to fix its problems in the next 90 days.

Haslam spokesman Dave Smith said the proposal to move the workers' compensation program and the problems in the labor department were unrelated.

"The (labor) department self-reported the issues and, as the release on the audit noted, is currently working to correct them," Smith said.

The new system, which would take workers' comp claims out of the court system so they could instead be considered by administrators appointed by the governor, would cost the state more than $1.5 million annually to administer, which would be offset by higher fee revenues, according to the measure's fiscal note.

Labor groups have pushed back against the program, which they say would hurt workers injured on the job. State Rep. Mike Turner, D-Old Hickory, said the proposal is part of a pattern by Republican leadership to push bills that are unfriendly to workers.

Mary Mancini, executive director of Tennessee Citizen Action, a nonpartisan consumer advocacy group, said that at the very least, the Haslam administration should hold off moving workers' comp under the department until its existing problems are addressed.

"They're talking about adding another multimillion-dollar division that's paid for by taxpayer money into a division that's already rife with mismanagement and problems," she said.

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