{"id":4774,"date":"2026-05-28T06:01:39","date_gmt":"2026-05-28T06:01:39","guid":{"rendered":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/28\/should-states-workers-comp-be-fixed-or-is-that-a-wrecking-ball-to-a-safety-net\/"},"modified":"2026-05-28T06:01:39","modified_gmt":"2026-05-28T06:01:39","slug":"should-states-workers-comp-be-fixed-or-is-that-a-wrecking-ball-to-a-safety-net","status":"publish","type":"post","link":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/28\/should-states-workers-comp-be-fixed-or-is-that-a-wrecking-ball-to-a-safety-net\/","title":{"rendered":"Should state\u2019s workers\u2019 comp be fixed? Or is that a \u2018wrecking ball to a safety net\u2019?"},"content":{"rendered":"
<\/p>\n

A once little-known corner of the workers\u2019 compensation system is facing a pivotal moment.<\/p>\n

Read more DUI, license checkpoint to be held in eastern Sacramento County, CHP says<\/a><\/p>\n

<\/p>\n

With soaring projected costs and a surge in claims that shows no sign of slowing, California Gov. Gavin Newsom is pressing to overhaul the program through a budget trailer bill \u2014 a move critics say is too sweeping a change to push through without full legislative debate.<\/p>\n

<\/p>\n

Proponents counter that the reforms are long overdue.<\/p>\n

<\/p>\n

At the center of the fight is the Subsequent Injuries Benefit Trust Fund, or SIBTF, which began as a narrowly focused program to encourage employers to hire injured war veterans.<\/p>\n

<\/p>\n

\u201c(The fund) was established in 1945 to help World War II veterans with severe disabilities, such as missing limbs, return to the workforce at a time when employers avoided hiring them,\u201d said Crystal Young, deputy secretary of communications for the state\u2019s Labor & Workforce Development Agency. \u201c…(It has) exponentially grown beyond its original scope in ways that strain both the severely injured workers it is meant to help and the employers, including public entities, who fund it.\u201d<\/p>\n

<\/p>\n

Those advocating for a fundamental reset \u2014 including Newsom, businesses, cities and counties \u2014 say a cottage industry of consultants and attorneys have morphed the claim process to include common ailments such as high blood pressure and toenail fungus. According to a July 2025 report by the Legislative Analyst\u2019s Office, nearly all SIBTF claimants receive the state\u2019s most generous disability benefit \u2014 $1,700 per week for life \u2014 which the LAO called \u201ca rarity in standard workers\u2019 compensation.\u201d Those payments can add up to millions of dollars, with attorneys who work on contingency, paid around 10% of the total award.<\/p>\n

<\/p>\n

According to the LAO, employer contributions to fund SIBTF have grown from $35 million in 2014-15 to $850 million last year. The LAO noted that the costs fall not just on private businesses but on cities, counties and school districts, which pay their SIBTF assessments directly out of operating budgets.<\/p>\n

<\/p>\n

This is not the first attempt at reform of the SIBTF process. Last year, AB 1329, sponsored by Assemblywoman Liz Ortega, D-San Leandro, included some of the reform measures in the current budget trailer bill and the backing of the Applicant Attorney\u2019s Association, which represents worker\u2019s compensation attorneys.<\/p>\n

<\/p>\n

Ortega\u2019s legislation passed the legislature, but Newsom vetoed it saying it did not go far enough. Newsom also said in his veto message that he was ordering DIR to come up with a more comprehensive reform proposal, setting up this year\u2019s showdown<\/p>\n

<\/p>\n

The current trailer bill tightens who qualifies for SIBTF benefits, narrows which pre-existing conditions count toward eligibility and strengthens oversight of the medical evaluation process. According to testimony from DIR officials before the Assembly Budget Subcommittee in March, the reforms would also cut down on the years long backlog of cases.<\/p>\n

<\/p>\n

Opponents of the trailer bill \u2014 including a former attorney general \u2014 say about 30,000 permanently disabled workers, many of whom have waited years to have their cases adjudicated, would see their in-process claims effectively canceled under Newsom\u2019s plan.<\/p>\n

<\/p>\n

The coalition opposing the bill, which includes firms with a financial stake in the outcome, has published constituent letters making the human case against reform.<\/p>\n

<\/p>\n

Moral issue?<\/h2>\n

<\/p>\n

\u201cWhile I understand that reform may be necessary, disallowing or restricting these claims will have real and lasting consequences for deserving individuals \u2014 particularly first responders,\u201d Drew Whyte, a retired San Jose firefighter, wrote to State Sen. Dave Cortese, D-San Jose. \u201c\u2026.These benefits are not a windfall; they are a lifeline for those whose bodies paid the price for service.\u201d<\/p>\n

<\/p>\n

Former State Attorney General Bill Lockyer, who served from 1999 to 2007, is now lobbying against the bill on behalf of the California Coalition for Injured Workers. \u201cThis is far too important an issue to make wholesale changes through an obscure trailer bill,\u201d he said in an interview.<\/p>\n

<\/p>\n

Lockyer, who served during the administrations of governors Gray Davis and Arnold Schwarzenegger, said the fight against the bill is not only for the benefit of affected workers, but a moral issue. \u201cWhy do you want to bring a wrecking ball to the safety net for disabled workers, just to address a few cases that you think are unmeritorious?\u201d he said.<\/p>\n

<\/p>\n

Lockyer said he is a registered lobbyist for the CCIW. A review of financial filings showed that the coalition was founded by Steve Chamberlain, the founder of two companies that assist attorneys in SIBTF cases and perform medical evaluations.<\/p>\n

<\/p>\n

Through April 30, the coalition has spent $100,000 on lobbying. Funding has come almost exclusively from contributions of $1,000 to $12,000 from physicians who work for medical evaluation companies. The coalition said it has also formed a nonprofit, though no public filings have occurred to date.<\/p>\n

<\/p>\n

An opposing view comes from industry advocates backing the governor\u2019s proposal. A letter supporting the trailer bill, authored by the California Chamber of Commerce and signed by dozens of industry associations, states: \u201cThe financial burden to finance this out-of-control system works as a tax on jobs because it is paid by employers as an assessment on their workers\u2019 compensation premiums. The massive expansion in cost is weighing down small and large employers alike in the private sector, and is burdening stressed state and local budgets as California struggles to backfill federal funding cuts.\u201d<\/p>\n

Read more Becerra up, optimism down: 3 takeaways from a new poll of California voters<\/a><\/p>\n

<\/p>\n

How did we get here?<\/h2>\n

<\/p>\n

A 2014 California Supreme Court decision expanded what can be considered an SIBTF pre-existing condition, creating a flood of claims.<\/p>\n

<\/p>\n

The ruling, Todd v. Contra Costa County,<\/i> broadened how pre-existing disabilities are defined and counted. Before Todd, applicants generally needed a single substantial pre-existing disability to qualify. According to the Department of Industrial Relations, which administers the fund, smaller pre-existing conditions include hypertension, sleep apnea, arthritis, diabetes, headaches, acid reflux, asthma, allergies and sexual dysfunction.<\/p>\n

<\/p>\n

The rise in claims following Todd has been dramatic. According to DIR, between 2010 and 2014, about 850 new SIBTF applications were filed per year. In 2025, DIR received 5,379 applications \u2014 more than a sixfold increase.<\/p>\n

<\/p>\n

Even rejected claims, which are rare, come with little risk. The fund still pays doctors for their assessments and covers other legal expenses. For law firms, an approved claim means a share of the benefits paid out weekly for the life of the client. Doctors who evaluate claims get paid whether the claim is approved or not.<\/p>\n

<\/p>\n

The push to reform the SIBTF process has been brewing for several years.<\/p>\n

<\/p>\n

, commissioned by DIR for $750,000, concluded that \u201cSIBTF rules have motivated claimants, their representatives, and vendors to make more frequent claims for injuries which in past decades might have yielded smaller benefits or might not have led to any benefits at all.\u201d<\/p>\n

<\/p>\n

A prominent federal prosecution has added to the push for reform. In January, an elected judge and former prosecutor pleaded guilty to felony fraud charges. Israel Claustro. He was an Orange County prosecutor who was later elected to the Orange County Superior Court and ran a side business \u2014 Liberty Medical Group, a Rancho Cucamonga-based medical corporation. Liberty was paid millions of dollars by the SIBTF system.<\/p>\n

<\/p>\n

One of Liberty\u2019s employees was Dr. Kevin Tien Do, a physician who had served a one-year federal prison sentence after being convicted in 2003 of felony health care fraud and was subsequently suspended from participating in California\u2019s workers\u2019 compensation program. In January, Claustro pleaded guilty to federal mail fraud and resigned from the bench.<\/p>\n

<\/p>\n

Stuart Girard, a member of the California Coalition for Injured Workers, called the Claustro case an \u201coutlier.\u201d Girard, who has worked as an executive for two companies that manage SIBTF cases, said the fraud uncovered in the Claustro case has no bearing on the trailer bill.<\/p>\n

<\/p>\n

\u201cThe proposed trailer bill doesn\u2019t just change policy \u2014 it risks pulling the rug out from under those who have relied on the law as written, including workers with pending claims and the professionals who serve them,\u201d he said. \u201cReforms of this magnitude should be done transparently, thoughtfully, and through the proper legislative process.\u201d<\/p>\n

<\/p>\n

What would the trailer bill do?<\/h2>\n

<\/p>\n

The trailer bill covers several parts.<\/p>\n

<\/p>\n