Workers’ Comp Gives Nev. Business Incentives

A study by the state of Oregon finds that Nevada’s workers’ compensation system is a selling point for attracting businesses to locate in Nevada. Premium-related rates have increased in Nevada only once in the past five years, and the state has gone from the 11th most expensive in 2002 to No. 26 in 2004 in that category, according to the study and National Council of Compensation Insurance. On average, rates Nevada employers were paying for workers’ compensation premiums went down more than 12 percent between 2002 and 2004, the study found. “That is one of the bigger declines,” said Derek Reinke, research analyst of the Oregon Department of Consumer and Business Services. “It has been good for the state, good for its workers, good for business and been very good for us for economic diversification for companies to come here that are good companies,” said Gov. Kenny Guinn. “That’s one of primary reasons we are doing so well in economic development and diversification right now.” Nevada’s workers’ comp system is privatized, which allowed the state to move off its ledger sheet an unfunded liability of $1.6 to $2 billion with the private sector taking over responsibility for it, Guinn said. Also, the state was able to reduce its payroll by about 800 workers through retirements, employees joining the privatized company or taking other state jobs, he said. Andrew Barbano, editor of NevadaLabor.com and a union member, said, “Workers’ comp is almost as difficult as applying for welfare. The system is designed to jump you through lots of hoops (so) that it will frustrate you to the point where it will reduce claims.” Guinn said that “to make sure that we are protective of our workers,” Nevada retained responsibility for arbitrating cases when it privatized the system. “We handle that, so that’s protection for individuals and the companies. We have a staff of people who actually hear those cases,” Guinn said. The governor also noted that privatization of workers’ comp in Nevada also ensured that permanently disabled workers received a greater percentage of their normal salary. The Oregon study shows that California’s workers’ comp premium rates are the nation’s highest at $6.08 per $100 of payroll compared with Nevada’s $2.58.