IWA Note: This page is no longer at AOI's site. It had been last updated by them on May 4,1998. Lisa Trussell is a member of MLAC as of September 2002.

Associated Oregon Industries

Oregon Public Policy Issues: Workers' Compensation

Lisa%20Trussell%20MLAC.jpg Lisa Trussell

Legislative Represenative

e-mail: lisa@aoi.org

Oregon State Workers' Comp. Division (WCD)

Current Issues

How can we continue to protect and preserve the workers’ compensation system? Stability and predictability are key elements in any successful workers’ compensation system. Oregon’s system is now at or near the national median for awards for the first time in history, while providing affordable rates to employers. The greatest challenge now is to preserve and protect the system from those special interests that can benefit change.

How can we continue to take advantage of opportunities through the use of the Management-Labor Advisory Committee (MLAC)? This statutory committee was developed as a key piece of the 1990 Mahonia Hall package, and is designed to act as a clearinghouse for proposals to modify Oregon’s system. Similar groups function in other states, most notably Wisconsin, and have a stabilizing effect on the system, by acting as a gate-keeper, thereby limiting change to those proposals upon which there is management and labor agreement. AOI staff member Lisa Trussell is a member of this committee appointed by the Governor.

What issues are currently being faced by MLAC? What has MLAC done to date? All sunset provisions have been reviewed with agreement to lift the sunset language for all but two of the provisions. Still under discussion are the provisions of exclusive remedy for denied claims and the stay of compensation pending appeal. Co-Chairs of the MLAC presented a preliminary report on MLAC's activities to a joint legislative task force Chaired by Representative Steve Harper (R-Klamath Falls) on January 27, 1998.

ORS 656 Sunset Clauses

ORS 656 (Full Text)

What process is MLAC using to perform its work? A list of items that go beyond the sunsets was developed by MLAC during discussions on the sunset issues. That list is being referred to as the "Parking Lot". These items will be addressed in a priority order throughout 1998. AOI's Workers' Compensation Policy Committee has met and discussed the issues as to their importance to the business community.

A copy of the report to Representative Harper's committee and the "Parking Lot" issues can be obtained through AOI.

MLAC Subcommittees, and Issues

MLAC 1998 Schedule

How can AOI Members contribute to the process? AOI members are encouraged to participate by becoming involved in the AOI Workers’ Compensation Policy Committee where many ideas will be discussed. Further participation is encouraged in the MLAC process by attending and participating in those meetings.

Please contact Lisa Trussell to offer your assistance, share ideas, or ask questions.


Oregon's Workers' Compensation system has a long and increasingly complex history. In 1913 the Legislature formed a commission of three individuals to handle virtually all aspects of Oregon's fledgling system. Today, the Workers' Compensation Division, Workers' Compensation Board, OR-OSHA, and the Workers' Compensation Ombudsman's Office all play significant roles in what has become an enormous and costly process. Two significant reform packages passed in the 90s have brought Workers' Compensation costs under control.

Oregon's Workers' Compensation system evolved from the original State Industrial Accident Commission (SIAC), which was created by the Oregon Legislature in 1913. Originally, SIAC was comprised of three commissioners who had authority to make, enforce, and administer rules and regulations needed to ensure safety in the workplace.

An Industrial Accident Fund was created to provide compensation to injured workers or their survivors. Employers in hazardous occupations had the option of paying into the Fund and thereby be immune to lawsuits arising out of workplace injuries. Employers opting out of the Fund were subject to unlimited liability under the Employer's Liability Act. (Employers in non-hazardous industries could voluntarily elect to participate in the Fund and receive its protections.) Unlike current law, both employers and workers were required to contribute to this self-supporting fund.

From 1913 to 1965 the responsibilities of the SIAC remained relatively constant with some notable changes, including:

  • 1929 -- the records of the Commission were declared to be open to public inspection except for information related to payrolls and confidential reports.
  • 1935 -- SIAC was given the additional responsibility for the Unemployment Compensation Commission, created in a special legislative session that same year.
  • 1943 -- the scope of the law was increased to include occupational diseases, create a medical review board to resolve disputed final orders, and give the commission the responsibility to investigate and enforce safety statutes, order compliance, and halt work operations for failure to comply with safety statutes.
  • 1959 -- SIAC was given the responsibility to require annual and periodic inspections of places of employment, as well as jurisdiction for enforcing safety codes relating to motor vehicles used to transport workers to and from places of employment.
  • In 1965 the functions and responsibilities of the commission were split into two agencies, the Workers' Compensation Board (WCB) and the State Compensation Department. Their respective responsibilities were allocated as follows:
  • The Workers' Compensation Board was charged with general supervision of accident prevention, rehabilitation, providing compensation, and enforcement of the Oregon Safe Employment Act and Oregon's Workers' Compensation Law. The Board, in concert with the Insurance Commissioner, had power to establish an Assigned Risk Pool and to establish reasonable rates for reimbursement for medical services provided to injured workers.
  • The State Compensation Department assumed the duties and responsibilities relating to insurance coverage, actuarial determinations, claims processing and payment, contribution collection, safety, accounting and other powers as insurers.
  • The 1965 law made workers' compensation coverage mandatory for all but a very limited group of employers. Additionally, employers could now self-insure for the purposes of workers' compensation. Under the three-way system, employers can discharge their obligation in any of three ways:
    1. obtain insurance from the State Compensation Department;
    2. buy insurance coverage from a licensed workers' compensation carrier; or
    3. by being self-insured
  • In 1969, the State Compensation Department was renamed the State Accident Insurance Fund (SAIF). Two years later, SAIF began operation as a competitive workers' compensation carrier authorized to buy, sell, lease, construct, furnish, rent, own, an d manage real property in its own name for offices and to pay for such property out of the Industrial Accident Fund, as well as to pay administrative costs out of the Fund.
  • In 1977, the Legislature created the Workers' Compensation Department, consisting of a Board and a Director. The Director was vested with authority in the areas of administrative, regulatory and rule-making duties, except those specifically reserved to the Workers' Compensation Board.
  • In 1979, the Legislature established SAIF as a public corporation, with a Board of five directors appointed by the Governor.
  • In 1990, Oregon's workers' compensation system had reached a state of crisis. Employer premiums were among the highest in the nation, yet worker benefits were low (see chart). Litigation costs were making Oregon an uncompetitive place in which to do business. Clearly, something had to be done.

In a dramatic moment, Democratic Governor Neil Goldschmidt, convened the two parties for which the workers' compensation system was originally designed-- Labor and Management -- and charged them with reforming Oregon's crippled system. By eliminating all other special interests from the discussions, Goldschmidt's fourteen member Mahonia Hall team, seven named by the AFL-CIO and seven named by AOI, managed in a few short months to virtually rewrite Oregon's workers' compensation law. The product of their work, SB 1197, was passed in a one-day legislative session in May of that year.

The results of the Mahonia Hall Compromise had immediate impact on Oregon's rates and benefits. Starting in 1991, Oregon rates have fallen each year for a total of 52.4% -- reflecting how far out of balance the system had been, as well as the significance and scope of the reforms. And employee benefits, which were once ranked among the worst in the nation, are now at or above the national median.

Oregon Workers' Compensation Premium Rate Changes (by year)


The 1995 Legislature revisited the subject of Workers' Compensation through an omnibus legislative package, SB 369. The bill, which was signed into law by Governor Kitzhaber in the final days of the session, increased injury awards to their highest level in history, while addressing several court decisions, which had threatened to reverse Oregon's progressive position. That legislation is scheduled to be revisited in the 1999 legislative session due to sunset provisions.


Last Updated May 4,1998

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