PIA strongly opposes a proposal that would expand federal oversight to potentially include state workers’ compensation programs.

Recently, the House Education and Labor Committee, chaired by Rep. Bobby Scott (D-VA) passed the labor portions of the administration’s pending budget reconciliation package. It includes an allocation of $121 million to dramatically expand federal authority over the Department of Labor’s Office of Workers’ Compensation Programs (OWCP). The appropriated funds would be used to carry out the tasks of the OWCP, which, according to the proposal, would include monitoring state workers’ compensation programs. Historically, the OWCP has overseen federal workers’ compensation programs but not workers’ compensation programs operating at the state level.

The rationale offered for this increase in federal oversight of state-run workers’ compensation programs is a purported decline in the sufficiency of benefits given to injured workers pursuant to state workers’ compensation programs and commensurate increase in the demand for federal workers’ compensation benefits, the “growth of the gig economy,” and the alleged misclassification of independent contractors. This change would permit the OWCP to monitor state workers’ compensation programs indefinitely. The scope of the OWCP’s new mandate is ambiguous and would likely be established by the OWCP itself.

State workers’ compensation programs are already monitored by numerous regulatory agencies, including the National Association of Insurance Commissioners, the International Association of Industrial Accident Boards and Commissions (IAIABC), the National Council on Compensation Insurance (NCCI), and countless state insurance departments, ratings bureaus, and workers’ compensation agencies. They are adequately regulated at the state level and should not be subject to federal oversight.

PIA will continue to actively oppose proposals that would subject state workers’ compensation programs to oversight by the federal OWCP.