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farmworkers be covered on the same basis as all other employees." And yet, as of January 1979, only fourteen states have achieved such coverage. Seventeen states do not prescribe any coverage for farmworkers and twenty-one states carry limitations for agricultural employment which is not applicable to other covered employees. The following table illustrates those states with large numbers of agricultural workers, and no required coverage for those workers:

States which do not insure coverage for migratory and seasonal farmworkers' and dependents

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1 Source.-An Estimate of the Number of Migrant and Seasonal Farmworkers in the United States and the Commonwealth of Puerto Rico, Lillisel, Kravitz and McClellan.

Limitations on agricultural coverage by state laws oftentimes give the appearance of providing a fair amount of coverage, when in fact coverage is almost nonexistent according to the National Commission.

The present state of coverage is far from adequate or satisfactory. Because of numerous exclusions, exemptions, and loopholes present in those state compensation laws which treat farmworkers, by no means should these states be thought of as providing coverage for every farmworker. . .

Several states have ambiguous provisions which give the appearance of coverage but in reality are so qualified that only a small segment of the agricultural workforce is covered. (Supplemental Studies, p. 139).

In those states which provide for limited coverage, the exclusions are oftentimes convoluted and coverage is difficult to discern. For example, in Florida, coverage is provided to: Agricultural workers, except those performing agricultural labor on a farm in the employ of a bona fide farmer or association of farmers, employing 5 or less regular employees and who employs less than 12 other employees at one time for seasonal employment in less than 30 days, provided and seasonal employment 2 does not exceed 45 days in the same calendar year.

1

Maryland's limitations are more straightforward-migratory laborers are simply exempt from any coverage.

Appendix A attached to these comments provides a table illustrating the limitations placed on coverage of agricultural employment by current state laws. The exclusion of some farmworkers from coverage offered by S. 420 will lead to misunderstanding by workers, and manipulation by agricultural employers. Crop seasons do not coincide with occupational accidents and illnesses do occur, farmworkers, whose income is at best marginal, have an even greater need than other workers for the benefits provided under Workers' Compensation.

U.S. DEPARTMENT OF LABOR,
EMPLOYMENT STANDARDS ADMINISTRATION,

DIVISION OF STATE WORKERS' COMPENSATION STANDARDS,

Washington, D.C. January 1, 1979.

TABLE 3. COVERAGE FOR AGRICULTURAL WORKERS

The National Commission on State Workmen's Compensation Laws, in its 1972 Report, proposed in part, that . . . “as of July 1, 1975, farmworkers be covered on

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the same basis as all other employees." Fourteen States' cover agricultural workers in accordance with this recommendation.

Twenty-one of the remaining States carry limitations for agricultural employment which is not applicable to other covered employees, as is shown in the following table.

Those jurisdictions not listed herein permit agricultural employers to secure coverage voluntarily, although such provisions are not statutorily prescribed.

STATES IN WHICH WORKERS' COMPENSATION LAWS APPLY TO FARMWORKERS

State

Farmworkers covered

Type of coverage

Numerical exemptions

None

Alaska..

Delaware..

Florida

Illinois........

lowa

Maine

Maryland..

Michigan....

Minnesota.

Agriculture employees, except those employed on a part-time Compulsory.
basis.

Agricultural employees whose employer insures the payment of Elective.
compensation for such workers. Family members are includ-

ed if they are bona fide employees and are named in the
employers contract for insurance.

Agricultural workers, except those performing agricultural labor Compulsory..
on a farm in the employ of a bona fide farmer or
association of farmers, employing 5 or less regular employ-
ees and who employs less than 12 other employees at one
time for seasonal employment in less than 30 days,
provided such seasonal employment does not exceed 45
days in the same calendar year.

All agricultural workers except those working for an employer do..
who employs less than 500 man days of agricultural labor
per three months during the preceding calendar year
exclusive of the employer's spouse and other members of
his immediate family residing with him.

Agricultural employees covered if the farm employer's total do..
cash wage payments during the preceding year amount to
at least $1,000.

Agricultural workers, except seasonal or casual. However, an do..
employer of 4 or less farmworkers may secure the payment
of compensation by obtaining an employer's liability insur-
ance policy (total limit not less than $25,000 and medical
payment coverage of not less than $1,000).
Agricultural employees covered if the farm employer has 3 or do..
more full-time employees or a yearly payroll for his full-
time employees of $15,000. Non-machine-operating migra-
tory laborers and office workers exempt from coverage.
(a) Farmworkers working for an employer who regularly do..
employs 3 or more employees at one time;.

(b) Farmworkers working for an employer who regularly
employes less than 3 employees if at least one of them has
been regularly employed by that employer for 35 or more
hours per week for 13 or more weeks during the preceding
52 weeks.

Farm laborers who do not work for a "family farm". Defines do..
"family farm" as any farm operation which pays less than
$4,000 in cash wages, exclusive of machine hire, to farm

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laborers for services rendered during the preceding calendar
year..

Missouri.

Requires compulsory coverage of farm laborers whose employ- do..
ers' annual payroll is in excess of $2,500.

6 employees

New York

None

Requires workers' compensation coverage of farm laborers for do..
12 months from April 1, if the farmer's total cash wage
payments during the preceding calendar year amount to
$1,200 or more; farmworkers supplied to farmer by a farm
labor contractor would be deemed to be employees
farmer.

the

'Arizona, California, Colorado, Connecticut, Hawaii, Louisiana, Massachusetts, Michigan. Montana, New Hampshire, New Jersey, Ohio, Oregon, and Puerto Rico.

STATES IN WHICH WORKERS' COMPENSATION LAWS APPLY TO FARMWORKERS-Continued

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2 employees.

State

Oklahoma...

Pennsylvania..

South Dakota....

Utah

Vermont.

Virginia...

Washington........

West Virginia.

Farmworkers covered

All workers employed in agriculture or horticulture by an do.
employer who had a gross annual payroll, including money
paid to independent contractors, in the preceding calendar
year of $25,000 or more.

All agricultural workers if employer pays one agricultural do.
worker wages of $150 or more or furnishes employment to

one employee in agriculture labor on 20 or more days
during a calendar year..

Workers engaged commercially in the operation of threshing do..
machines, grain combines, corn shellers, corn huskers,
shredders, silage cutters, and seed hullers for profit.

All agricultural workers except: employees who are family do.
members; employers whose cash payments to one or more
employees amounted to less than $2,500 during the
preceding calendar year; or employers who do not employ
at least four persons for 40 hours or more per week per
each employee for 13 consecutive weeks during any part of
the preceding 12 months.

All agricultural workers except those working for an employer do...
whose aggregate payroll is less than $1,000 in a calendar
year.

Agricultural workers working for an employer who during the do.
previous calendar year has developed a payroll of $15,000
or more per year, or who regularly employs more than 4
full-time employees.

All agricultural employees except those who earn less than Compulsory.
$150 per calendar year from one employer, or any child

under 18 employed by his parents in agricultural activities
on the family farm.

Employees of an employer who has 6 or more workers in do...
agricultural service.

None

None

None

None

3 employees.

None

See column 2.

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Hon. HARRISON A. WILLIAMS, Jr.,
Chairman, Senate Committee on Labor and Human Resources,
U.S. Senate, Washington, D.C.

DEAR SENATOR WILLIAMS: On behalf of The National Council of Self-Insurers, I am submitting the Council's statement on Senate Bill S. 420. We would appreciate this statement being made part of the official record of proceedings concerning the bill. If our Association may be of further assistance, we are happy to do so.

Very truly yours,

GEORGE G. NEMETH,
General Counsel.

PREPARED STATEMENT OF THE NATIONAL COUNCIL OF SELF-INSURERS The National Council of Self-Insurers is an association whose company members self-insure their workers' compensation liability under the provisions of one or more of the 50 states or under the provisions of an existing Federal program. We have the

distinction of being the only National Association representing exclusively selfinsurers and those interested in self-insurance. We have appeared before your committee and given testimony on each of the predecessor bills to S. 420 and have witnessed the evolution of this proposed legislation to its present form.

Each one of the Federal Workers' Compensation Standards bills which this committee has considered and rejected over the last several years has been motivated by the belief that the best and most desirable way of improving the state Workers Compensation system is through the enactment of some degree of federalization. The degree and type of federalization proposed has varied, but the underlying philosophy of federalization as the cure has been constant in each proposal, including S. 420. Numerous witnesses appearing before this committee have repeatedly urged consideration of an alternative-an alternative suggested by the National Commission on State Workmen's Compensation Laws:

"We urge the President immediately to appoint a Federal Workers' Compensation Commission to provide encouragement and technical assistance to the States” (at page 126 of the Commission's report).

The only response this urging ever received was a half-hearted one-the appointment of an inadequately funded and understaffed Interdepartmental Task Force on Workers' Compensation. The work of the Task Force went, for the most part, unrecognized and its recommendations unheeded. Assuming, arguendo, that the 19 Essential Recommendations are desirable goals for state compensation laws to achieve, it is the unalterable opinion of our association that the imposition of Federal Standards is the least desirable way of achieving those goals.

The mechanisms provided by S. 420 for enforcing and administering its minimum standards only confirms our belief that Federalization is not the answer. Section 8 of S. 420 provides that an aggrieved claimant may file a petition for review with the Benefits Review Board which was created by Section 21 of the Longshoremen's and Harbor Workers' Compensation Act. The Board will then decide the appeal or refer it to either the Office of Workers' Compensation Programs or to an administrative law judge for further hearings and development of evidence. Quite simply, what this means is the establishment of a second administrative labyrinth superimposed upon state procedures: new hearings, new findings of fact, new conclusions of law, additional attorneys' fees, and an endless proliferation of federal bureaucracy. All at what cost?

Using Illinois as an example, last year approximately 73,000 Workers' Compensation cases were decided. Nearly all of those cases would involve supplemental benefit hearings under the provisions of S. 420. Extend these figures nationwide and it is obvious that no existing federal agency could handle the case load. Given the documented failure of the Office of Workers' Compensation Programs to be able to administer even the programs presently under its authority, we must view any extension of its jurisdiction as certain disaster. We give specific mention to the problems of OWČP only because they are most widely known. That is not to say that another department or agency would be any less objectionable. No federal administrative agency has shown itself to be nearly as capable of dealing with the problems of workers' compensation as are the various state agencies. The determination of a workers' compensation case should begin and end at the state level. In addition to our belief that no part of the administration of workers' compensation should come within the Federal domain, we also maintain that S. 420 misorders priorities and will deter the states from improving their systems. To illustrate, we offer just two examples:

1. The spendable income concept

The National Commission recommended that as soon as feasible, the state should use the 80 percent of spendable income formula as the measure of the employee's benefit level. The Commission stressed that the 80 percent formula should be used when maximum benefit levels exceeded 100 percent of the state's average weekly wage. S. 420 increases the maximum to 150 percent of the state's average weekly wage and yet it chooses 66% percent of the employee's average weekly wage as the desirable benefit level. The bill merely gives passing acknowledgement that the 80 percent of spendable income formula is a permissible alternative. In taking this approach, S. 420 gives priority to a formula which the National Commission found to be emphatically less desirable.

2. Off-setting overlapping benefit programs

This area is of crucial concern in dealing with cost containment and avoiding duplicate benefit payments. The National Commission devoted considerable attention to this problem and recommended that benefit systems be integrated to eliminate overlapping payments. The Commission acknowledged that there are a myriad

of benefit programs available to injured workers and their families, only one of which is the Social Security system. Despite this, under Section 4 of S. 420, the only offset allowed is for Social Security death payments, and even this offset is limited. The effect of S.420 would be to bring to an absolute halt any additional attempts by the states to modify their workers' compensation systems in order to deal with the problem of duplicate and overlapping benefits.

Although we consider the points raised in this statement to be compelling reasons why S. 420 should not be enacted, we do not intend our remarks to be exhaustive of the problems inherent in S. 420 or, indeed, in any federal standards bill. What we wish to emphasize by citing the spendable income and social security offset examples is simply this-there is much room in the field of workers' compensation for innovation and variation. A federal standards bill, no matter how well motivated, will only serve to stifle the states' own attempts to improve their systems. The states require flexibility, unfettered by "minimum standards" which will undoubtedly become the maximum level of performance in most states.

We believe that needed improvement in state workers' compensation can and will be accomplished when the philosophy that federalization is the way to accomplish it is abandoned. In the hope that our urgings will this time be heard, we repeat our previous recommendations: Establish a program of aid and technical assistance to encourage the states to make needed improvements in ways best suited to them.

Hon. HARRISON A. WILLIAMS, Jr.,

STERLING L. HILEN,
ATTORNEY AT LAW,

San Francisco, Calif., April 11, 1979.

United States Senate, Russell Senate Office Building, Room 352,
Washington, D.C. 20510

DEAR SENATOR WILLIAMS: Thank you for your letter indicating that although the committee's schedule did not permit time for the Federation of Insurance Counsel to testify at the recent hearings, you would keep the record open until April 17th for the filing of statements.

Enclosed find a short statement on behalf of the Federation of Insurance Counsel in opposition to S. 420. It would be appreciated if this could be included in the record.

Not being entirely certain of the protocol in these matters, I am taking the liberty of sending a copy to each member of the Senate Labor & Human Resources Committee.

Sincerely yours,

Enclosure.

STERLING L. HILEN

STATEMENT BY STERLING L. HILEN On Behalf of thE FEDERATION OF INSURANCE COUNSEL

This statement is offered by the Federation of Insurance Counsel, a nationwide group of approximately 1,000 attorneys who provide legal representation to the insurance industry. However, these comments are offered solely on behalf of the Federation of Insurance Counsel and may, or may not, reflect the views of individual insurance companies or any particular insurance association.

The Federation has followed with growing concern the national debate over federal legislation in the field or workers' compensation since the first bill was introduced in 1972. Whatever justification may have existed for federal intervention at that time has long since ceased to exist. S. 420 is an idea whose time has passed. Whatever deficiencies may still exist in benefit levels and scope of coverage are rapidly being corrected. Š. 420 is a totally inappropriate vehicle to correct the remaining problems.

Proponents of federal legislation invariably rely on the 1972 Report of the National Commission on State Workmen's Compensation Laws and particularly the socalled "19 essential" recommendations. Frequently overlooked in the ensuing controversy is that the National Commission did not even address two of the more urgent problems in the workers' compensation system: awards for permanent partial disability (the largest single component in the benefit dollar) and a delivery system which, in some states, encourages a proliferation of unnecessary litigation. S. 420, of course, addresses neither. A sound workers' compensation system requires a balancing of various interests. This can only be accomplishing at the state level. By mandating the infusion of additional enormous sums of money, S. 420 will

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