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The following resolution was passed at the 55th annual convention of the Building & Construction Trades Department of the AFL-CIO.

RESOLUTION NO. 46

Referred To: Organizational Committee

Submitted By: Governing Board of Presidents, Building & Construction Trades Dept. – AFL-CIO

RE: Workers’ Compensation in Collective Bargaining

Today the workers’ compensation premium is the second largest labor cost in construction. The rate of increase in workers’ compensation costs has by far outstripped the rate of growth in wage or health and welfare contributions. The average workers’ compensation premium for three types of construction – structural ironwork, carpentry and masonry – is currently 28% of payroll.

Until about 1980, workers’ compensation costs were modest and of no great concern to employers. They were considered a minor cost of doing business. As these costs increased, however, employers began to think of them as labor costs and thus began to incorporate them into their collective bargaining strategies even though these costs rarely were put on the table directly.

However, some building trades unions, local and state councils and state governments anticipated the trend and moved the issue directly to the bargaining table. States workers’ compensation laws have been amended in Massachusetts, California, Florida, Maine, Hawaii, Kentucky, Missouri and New York.

In cooperation with the Department and its affiliates, Union Labor Life Insurance Company established a workers’ compensation product to provide such insurance under conditions defined in collective bargaining agreements. Because of its unique approach, the Florida Workers’ Compensation Board awarded a 15% reduction in premium rates to a collectively bargained program; a major water project in southern California incorporates workers’ compensation in the project agreement and many other construction projects are moving in this direction.

Early results from collective bargaining agreements on workers’ compensation in Massachusetts, Florida and California demonstrate the viability of this approach. the Pioneer Valley Congregation Project, which was the first to adopt this approach, resulted in an 82% decline in serious injuries, an elimination of legal disputes, better benefits that provided for workers who were injured and a 57% reduction in costs. Union leaders have expressed great satisfaction with the results.

The Department should promote this concept in every way possible while always preserving the maximum protection for our members. The Department and its affiliated unions should continue to seek changes in the laws of all states to accomodate collective bargaining for the Building Trades.

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