(SCIF) has officially cancelled the layoff plan it announced
State Compensation Insurance Fund (SCIF) has officially cancelled the layoff plan it announced last fall, State Fund officials confirm. In 2010 State Fund began a major restructuring of its operations and announced layoffs the following year. According to an email sent out by president and CEO Tom Rowe and obtained by Workers’ Comp Executive, the carrier was able, through other means, to reduce enough staff that it made the layoff of 1,500 to 1,800 employees unnecessary. The email reads in pertinent part:
“The combined impact of access to SROA [State Restriction of Appointments] and Surplus status, job fairs, job search, resume writing classes, and transition payments (a first in civil service), have resulted in more than 1,300 employees transitioning out of State Fund.
The number of positions that remain in the restructure plan is now small enough that we have decided to cancel the layoff. This allows all of us to refocus on the future, and avoid the disruption associated with bumping, demotions, and retraining that are the routine elements of a layoff process in California’s civil service structure,” the email reads.
Back in October State Fund announced that it planned to layoff between 1,500 and 1,800 employees in the May-June 2012 timeframe. At the time State Fund said the planned layoffs were the result of industry comparisons and internal reviews that affected the need for staff. State Fund said the layoffs would result in an annual savings of $150 million. This was on top of the already $200 million annual estimated savings from the overall restructuring plan it announced in 2010 where State Fund closed and consolidated offices requiring almost 1,400 employees to relocate.
Since announcing the layoffs last year, almost 1,000 employees took State Fund up on its transition packages. And in 2012 transfers have really accelerated, says State Fund spokeswoman Jennifer Vargen. SROA status, which gives employees targeted for layoffs in their classes a hiring preference with other state agencies, has helped get employees other jobs in state government.
“Since the beginning of the year about 300 employees have found work at other state agencies. We believe attrition will get us to our staffing target,” Vargen says, adding that there are no plans for another layoff, although the second half of State Fund’s restructuring plan will begin this fall. It’s expected there will be more attrition from that.
Vargen says State Fund is looking at a staffing target of around 4,300 by the end of the year.
SEIU 1000, the union that represents State Fund employees, has been publicly critical of both State Fund’s restructuring and the layoffs when they were announced. SEIU was unable to provide an official statement by deadline.
But sources that asked not to be quoted tell Workers’ Comp Executive that State Fund cut too much and it began to affect essential policyholder services. “They had to admit enough was enough. They made cuts with a future in mind that didn’t exist and probably never will,” says one individual familiar with the layoff situation.
The federal workers’ compensation system would get its biggest makeover in almost 40 years
The federal workers’ compensation system would get its biggest makeover in almost 40 years under postal reform legislation the Senate passed 62-37 Wednesday.
The bill would cut workers’ comp benefits to half of pre-injury pay for most recipients once they reach retirement age. Under existing rules, recipients without a spouse or dependents typically collect two-thirds of their normal salaries, while others receive 75 percent, and those benefits are tax-free.
The bill is intended to reduce benefits so recipients will opt to take retirement benefits when they become eligible. Currently, workers’ comp benefits sometimes exceed what most feds would receive through retirement plans, so some feds receive workers’ comp benefits until their death.
Retirement-age workers’ comp beneficiaries already in the program would be grandfathered in, as would totally disabled beneficiaries of any age, according to Sen. Susan Collins, R-Maine, the leading advocate for the changes.
Other recipients would not see any changes to their workers’ comp benefits for three years.
The workers’ comp program, run by the Labor Department, provides tax-free pay and medical benefits to employees injured on the job. Forty-three percent of recipients in 2010 were U.S. Postal Service employees, according to a February Government Accountability Office report. More than 2,000 Postal Service employees on workers’ comp are beyond the age of 70, while six federal employees on the program are age 100 or older, Collins, said Tuesday during floor debate on the postal bill.
“These individuals are not coming back to work,” Collins said in arguing successfully against an amendment by Sen. Daniel Akaka, D-Hawaii, that would essentially have left the status quo in place. “We are trying to focus this program, as it should be, on returning injured workers to work.”
Federal labor unions staunchly oppose the proposed benefit cuts. “It is disappointing to see the Senate bill include language that is harmful to injured employees,” National Treasury Employees Union President Colleen Kelley said in a statement after the vote.
The bill now goes to the House. If signed into law, the changes would save $1.2 billion over 10 years, Collins spokeswoman E.R. Anderson said Wednesday and would mark the first major reworking of the system since 1974.
In 2010, about 307,000 federal employees received workers’ comp benefits at some point, according to the GAO report. Almost 32,000 were long-term, full-time beneficiaries. Of that group, about 10,900 were at full retirement age, but collected more than half of the $1.9 billion in cash payouts that year, GAO said.
