Comp Deal Done

Comp deal done

Passage of insurance bill would be big win for Arnold

By David M. Drucker
Sacramento Bureau - LA Daily News

SACRAMENTO -- Gov. Arnold Schwarzenegger and legislative leaders cut a tentative deal Wednesday on workers' compensation reform and worked into the night on details of the landmark plan designed to save California businesses billions of dollars a year.


"Comp" is a shortening of "compensation" - a shortening that would only be used in a context that would make it clear what was being discussed. We refer to 'worker's comp', and might say "This was a business lunch, so my company will comp the bill".

"to do a deal" is the same as "to make a deal" or "to come to an agreement (that is often financial in nature)".

For further clarification, Oristar, Workers' Compensation (which i believe it fair to say, is a department of the bureaucracy in every one of the fifty states) compensates workers who are injured while working. Jack London once wrote to the effect that an injury is the rock upon which the working man's barque is wrecked. What he meant was that when someone in the working class, who has few or no savings, is injured, the money will soon run out, and the worker and family will be left with no means of support.

Beginning in the 1930's, states in the United States began to establish Workers' Compensation agencies. There are several classification tables which describe the types of work one may do, and assign a premium rate to that particular classification. The employer is obliged to pay into an insurance fund (run by the state, and not by a private insurance company) which will, as do traditional insurance companies, invest the money so that there will be fund growth to cover the expenses of injured workers. How much a worker will recieve varies from state to state. As an example, i am a business manager of a low-voltage security company. My job is classified as "Clerical Office Staff, with Outside duties, NOS (Not Otherwise Classified)." This refers to the fact that the majority of my work is done in an office. It also refers to the fact that i have duties outside the office (i deliver equipment and materials to job locations); NOS means that there is not a more specific description of my duties. Our employees install closed circuit television surveillance systems, and "access control" systems (electro-mechanical door control devices which will only unlock doors under specific circumstances). As there is not a classification system for low-voltage security (a relatively new field), our employees are classified as "Electrical Wiring within Buildings."

Therefore, twice a year, we submit to the Bureau of Workers' Compensation a report of wages paid. Working in an office, even with outside duties, is a relatively risk-free employment, so my employer is required to pay $0.85 for every $100.00 of gross pay (pay before taxes are deducted). Electrical Wiring with Buildings is also fairly risk-free, but the consequences of an error would be great (the assumption is that 110 volts or 220 volts are involved--which is not true of low-volatage work, at 24 or 12 volts, but there isn't a separate classification for that work), so my employer must pay in excess of $5.60 for each $100.00 of gross pay paid to workers in that classification.

If an employee is injured on the job, the BWC (Bureau of Workers' Compensation) pays the medical costs, and if the worker is temporarily disabled (not able to work), the BWC in some states will pay a weekly check to the worker to meet basic needs (not generous, but considered enough for basic living expenses).

California, where Schwartzenager is Governor, has a population of more than 30,000,000 people. That means lots of workers, and lots of potential costs. Workers' Compensation funds have also been, traditionally, the target of "raids" by the Legislature of a state which needs money, and sees the BWC fund as "just sitting there doing nothing." When the U.S. economy went bad in 2001, the return on investments for BWC funds fell rapidly. In many states, those where the Legislature had been raiding the funds, they now found themselves obliged to pay Workers' Compensation costs out of general revenues. So it has become a crucial budget issue, especially in a state with a population as large as California.

Additionally, there have been in the last 20 years, many allegations of abuse of the BWC funds by employees and fund managers. Where i live, in Ohio, the straw that broke the camel's back was the discovery of huge payouts to two BWC lawyers who alleged back injuries, and when investigated, it was discovered that they had reported sustaining injuries when lifting their golf clubs into the back of the car, on a day they spent at the golf course instead of working. This lead to a major scandal, and an overhaul of the BWC and its fund management. For the last six years in Ohio, the BWC gave a 75% discount on all premium payments. Both because the economy was doing well for most of that time, and because cleaning up corruption had yeilded a huge net gain, we were spared the usual high costs. Now, however, with the economy not doing as well (it is improving), the full premium is due. In the case of our company, the premium for each employee averages about $2000.00 a year. We had been paying only $500.00 per year when the fund was doing well. Now, we are back to paying the full amount. There continue to be allegations of corruption and fund mismanagement in many states. Since the money comes from employers, and not from general revenues, fiddling with the BWC funds can be politically dangerous. Therefore, in California, which is having severe budget problems, it was necessary to "do a deal," that is, go through a difficult negotiation process, because if you take people's money and don't deliver what you promise, especially when their livelihoods are at stake, you could be in real political trouble.

Hi Eos and Setanta,

An abbreviation that is made in this way and is not adopted by any dictionary is utterly new to me.

Setanta, I've printed out your long reply for the convenience of reading it "off comp"/off computer. I'd see you later.

Hi Setanta, I cannot tell you how cool your reply was. With the help of the reply, I could begin to penetrate the connotations of the proper noun "comp deal".
Still, there is a few questions that I didn't get them very clearly.

(1) a low-voltage security company = a company that manufactures/sells low-voltage security products and offers relative services, such as electrical creepage protector, closed circuit television surveillance systems?

(2) who alleged back injuries = who alleged that they have been injured in their back?

(3) it was discovered that they had reported sustaining injuries...

I guess that is "they had been reported" but the report also had been ignored. If they had reported themselves that they were not injuried at the working time, they should, generally speaking, be discovered soon that they didn't have the right to enjoy the BWC funds and therefore no scandal happened afterwards.

1-I believe you've got this right, and that they also install this equipment (Set?)

2-I think you've got that correct.

Yes, Wilso has got that right, although we don't manufacture the equipment.

He has #2 correct as well.

The report was not ignored, they got their money--but there was no review of the claim, which would have revealed that it was a false claim, and an instance of flagrant corruption. This incident was only discoverd after a citizens group won a court order to open the BWC records to their review. The entire system had become so corrupt, that these individuals were the ones reviewing their own cases.

BTW, if i understand correctly, these two were repeating a scam which had been done earlier in another state--Kansas, i believe.

The red tape of bureaucracy of some states of the US also stank as China. I think the situation is worse in China, however.