Sheet Metal Contractors and Workers Urge Additional Reductions in Workers' Compensation Premiums.

Business Editors/Real Estate Writers

OAKLAND, Calif.--(BUSINESS WIRE)--Dec. 17, 2003

SMACNA/SMWIA Local 104 Voice Concern That High Cost of Doing

Business Will Undermine Quality of Building Construction

The Bay Area Chapter of the Sheet Metal & Air Conditioning Contractors' National Association (SMACNA) and the Sheet Metal Workers International Association (SMWIA) Local 104 are jointly urging Governor Schwarzenegger to make additional reductions in workers' compensation premiums, which have tripled in the last three years. The SMACNA/SMWIA partnership has a longstanding tradition of establishing high safety and training standards that result in safer, more cost-effective commercial, industrial and residential construction. The partnership asserts that while union contractors struggle to pay skyrocketing workers' compensation premiums that threaten companies' survival and their employees' jobs, construction projects will fall to unskilled, non-union laborers willing to work for less, resulting in more on-the-job accidents and inferior construction.

The current workers' compensation crisis is taking its toll on all California businesses, which have seen workers' compensation insurance costs rise from $9 to $29 million since 2000, a 322-percent increase. The system, which was originally designed to protect the health and income of workers injured on the job and limit employer liability for lawsuits, is cutting into employers' bottom lines and encouraging some to leave the state or lay off workers. While recent reform legislation has reduced premiums by an average of 3.6 percent, including a 2.9 percent reduction by the State Compensation Insurance Fund, the SMACNA/SMWIA partnership urges Governor Schwarzenegger to take swift action for further reductions.

"Union contractors who maintain higher employment and safety standards are being squeezed out of business by rising workers' compensation insurance costs," said Garland Self, president of the Bay Area SMACNA Chapter. "The SMACNA/SMWIA partnership has worked hard to establish and maintain labor and safety standards that reduce job-related accidents and lower disability claims. Companies shouldn't have to pay what amounts to a penalty tax for maintaining higher labor standards, which is why we are appealing to Sacramento."

No matter how much they focus on safety, individual employers, including contractors, can't completely control their workers' compensation costs because insurance companies use industry standards to establish rates. In the construction industry, inexperienced or unethical contractors who cut costs by using unskilled laborers and taking shortcuts on regulated safety procedures lower these standards. The result is an increase in the number of on-the-job accidents and construction of more substandard buildings, which increases the health risk from toxic mold and other problems. Substandard training and safety not only raise workers' compensation rates for the entire construction industry, but also impact the taxpayer when uninsured workers and others seek state-funded medical treatment for their injuries. That's the impetus behind the SMACNA/SMWIA partnership -- to promote safety and training standards.

While government intervention is necessary to reign in premium rates, there is a lot employers can do to keep costs down. Studies show that the majority of workplace accidents are a result of inadequate employee training. The SMACNA/SMWIA partnership offers a program that provides apprentices with five years of classroom study and supervised on-the-job training before they become fully skilled journey people. Apprentices learn how to identify and correct ergonomic problems, spot physical hazards and detect the presence or release of hazardous chemicals among other safety skills. Continuing education for experienced journey people is also available to keep workers informed of new processes and changes in technology. As a result, union sheet metal workers have fewer work-related accidents, reducing the direct and indirect costs of workers' compensation, including job shutdowns and retraining of injured workers.

"Safety and worker's compensation costs go hand in hand," said Joe Maraccini, financial secretary and treasurer of SMWIA Local 104. "The SMACNA/SMWIA partnership is doing its part to ensure that it meets and exceeds Cal-OSHA safety standards through extensive employee training, which reduces compensation claims. The governor needs to do his part by ensuring that premiums are lowered so union shops that maintain higher standards can compete cost-effectively rather than allowing sub-standard contractors to co-opt the system."

About the Partnership: SMACNA and SMWIA

The Bay Area Chapter of the Sheet Metal & Air Conditioning Contractors' National Association (SMACNA) and the Sheet Metal Workers International Association (SMWIA) Local 104 have recently joined forces to create an official partnership to champion standards for quality and safety in sheet metal construction. Working in tandem, sheet metal management and labor have a 100-year legacy of championing industry standards for construction quality and safety. Under the common banner of "Standards Set, Standards Met," the partnership is currently leveraging dual programs for training, education, advocacy, and research to demonstrate the value of working with union contractors and workers.

Sample sheet metal projects include:

-- Ventilation systems

-- Skylights

-- High tech clean rooms

-- Decking and siding

-- Kitchen equipment

-- Metal roofs