Alabama Workers' Comp Blawg

In the Race for WC Reform, Georgia is the Hare and Alabama is the Tortoise

In May of 2017, we reported that an Alabama Circuit Court Judge issued an Order declaring the entire Alabama Workers’ Compensation Act unconstitutional.  In June of 2017, we reported on what needed to happen to fix the Alabama Workers’ Compensation Act.  In November of 2017, we reported that the Alabama State Bar Association had appointed a task force to review the Act and make recommendations on how to fix it.  In April of last year, we reported on the types of changes the task force was looking at making.  On October 17, 2018, the task force unanimously approved a proposed bill that would make substantial changes to the Act.  Unfortunately, the Alabama Council of Association Workers’ Compensation Self Insurance Funds was not invited to participate on the task force.  This was an oversight as the Council represents self-insurance funds providing workers' compensation coverage for 16,200 Alabama businesses employing 375,000 people. The Council voted against the proposed bill primarily because it raises legal fees for plaintiff attorneys by one-third and does nothing in the short run to reign in hospital, doctor, and other medical costs. It also more than doubles the cap on certain disability payments to injured workers and adds an inflationary adjustment. Although it voted no to the proposed bill as drafted, it did state that it was open to discussing change. 

The Alabama legislature began its regular session this month. Although our Governor called a special session to tackle Alabama’s “crumbling infrastructure,” nothing has been introduced regarding the workers compensation system.  Some would argue that the Alabama House and Senate have many new faces this year and, therefore, it would be difficult, if not impossible, to quickly effectuate any major change to the Workers’ Compensation Act.  But then it would be difficult to explain how a 55% gas tax hike that was largely unpopular with the electorate was rushed through the legislature and signed into law in just 5 days.

Despite forming the task force, the Alabama Bar Association is prohibited from throwing its support behind any proposed legislation. Therefore, there is no organization pushing for immediate change at this time.  According to the Alabama Department of Labor, it is a state regulatory agency tasked with the responsibility of following and enforcing the laws put in place by the legislature.  As the regulator, it typically does not comment on proposed legislation.  However, it acknowledges that the current workers’ compensation laws are not ideal and that amendments are needed that benefit both injured workers and employers.  It will follow and enforce any changes that are made, if any. 

Meanwhile, our neighbor to the east has wasted no time pushing for change. During its 2019 legislative session, the Georgia Senate unanimously passed a bill that would raise the maximum weekly benefit for temporary total and permanent partial disability.  If approved by the House and signed by the governor, it would mark the largest increase to the caps in decades.  Is this change in response to a Georgia court recently declaring the entire Georgia Workers’ Compensation Act unconstitutional?  No.  Rather, it is the result of all interested parties progressively working together to effectuate needed change.  The last time that happened in Alabama was 1992.

What Happens Now?

Unless something is done legislatively, it is inevitable that another circuit court judge will, again, address the constitutionality of the Act. Since nothing is going to be introduced or passed during this legislative session, at a bare minimum a committee comprised of all interested parties needs to be formed that can make recommendations for change.  The 1992 reforms were passed as the result of the Department of Industrial Relations (now Department of Labor) initiating discussions between the interested parties.  Informal discussions resulted in a reform bill being introduced in 1991.  The bill easily passed the House but was not voted on by the Senate.  Negotiations continued through the remainder of 1991 and into 1992.  Prior to the next legislative session (special session in January), Governor Hunt called for formal negotiations.  Still no consensus was reached.   Negotiations and lobbying continued and a revised bill was finally passed in the regular session a few months later.   If history is any indicator, negotiations need to begin now if there is to be any chance of change in 2020.

About the Author

This blog submission was prepared by Mike Fish, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish by e-mailing him at mfish@fishnelson.com or by calling him directly at 205-332-1448.