Workers' Comp Costs Skyrocket for Nondurable Goods

Claim costs are rising for California workers injured on the job in nondurable goods manufacturing, a new analysis has found.

The average amount paid on lost-time workers’ compensation claims for these workers increased 38 percent to $12,583 in 2007 from a low in 2005 of $9,140 following workers’ comp system reforms. That’s according to the California Workers’ Compensation Institute, an Oakland research organization backed by the insurance industry and self-insured employers.

The institute released results this week of its review of claims experience between 2000 and 2008 of workers who make “soft goods” items, such as clothes, food, cleaning products and plastic goods. The study looked at 136,742 job injury claims, totalling almost $1.78 billion.

The average amount paid on workers’ comp lost-time claims in the nondurable goods manufacturing sector declined briefly after major system reforms, but average payments are heading back up, the organization reported.

Workers in nondurable goods manufacturing made up 6.7 percent of all on-the-job injuries in the Golden State and 6.1 percent of paid losses between 2000 and 2008, the institute said. But the sector’s share of workers’ comp claims shrank toward the end of the review period, given that the manufacturing job base in California has been declining. In 2002 the sector represented 7.2 percent of claims and 7.7 percent of workers’ compensation loss payments. By 2008, the proportion dwindled to 4.4 percent of the claims and 3.8 percent of paid losses, the institute reported.

All the data reflects the year that claims occurred instead of employers’ policy year.