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