Report: California Has Highest Workers’ Compensation Costs in U.S.

California has the highest workers' compensation costs in the country, according to a new report, the Sacramento Business Journal reports.

The Workers' Compensation Premium Rate Ranking Summary was conducted by Oregon's Department of Consumer and Business Services.

Findings

The report found that California businesses spend $3.48 for every $100 of payroll on expenses related to workers' compensation. In comparison, businesses in North Dakota -- the state with the lowest costs -- spend 88 cents out of every $100.

The median cost for all 50 states was $1.85, making California's costs about 188% of the median.

Costs on the Rise

According to the Business Journal, workers' compensation costs are on the rise in California, with the state ranking fifth-highest in 2010 and third-highest in 2012 (Bridges, Sacramento Business Journal, 10/24).

Jerry Azevedo, spokesperson for the Workers' Compensation Action Network in California, said that workers' compensation premiums have increased by 41% since 2009.

Reaction

Azevedo said workers and their employers do not benefit much from the program. Instead, he said much of the money is paid to lawyers, brokers and other administrative costs.

Azevedo said, "California's workers' compensation system is incredibly inefficient," adding, "For as much as employers pay, they don't get a lot out of it."

Meanwhile, Christine Baker, director of the California Department of Industrial Relations, said the findings are skewed because the variety of industries and other factors are not comparable to the "reality" of workers' compensation in California (Smith, San Gabriel Valley Tribune, 10/22).