To The Point
by Caren Cowan
The Bad News …
The state’s workers’ comp exemption has been ruled unconstitutional. In a ruling issued by the New Mexico Court of Appeals on June 22, 2015, all of agriculture is now subject to purchasing workers compensation insurance for its’ workers. In an action that can only be considered as punitive, the ruling is retroactive to March 20, 2012.
Clearly one cannot go back and purchase this insurance for the past three years, so ranchers and farmers are open to the liability of any claims going back that far. There is no way to tell how many claims there might be. Under the prevailing law until June 22, agriculture was exempt and any claims that were filed were rejected. No one can guess how many might be filed now. This is one of those take-a-deep-seat-and-a-far-away-look moments that Daddy talked about.
Agricultural trade organizations have been working on this issue for several years in the Legislature and have been successful in fending off legislative changes. When that didn’t work, those trying to change the law moved to the courts. The way the litigation that brought us here was filed, there wasn’t ever a day in court for those being who will pay the price, quite literally, for it.
There appears to be only two options open at the present time. The first is to appeal the ruling to the New Mexico Supreme Court in an attempt to have all or part of it overturned. The deadline for filing for writ with that court is July 22, 2015. Work is being done now to file before that date. A stay of implementation of the Appeals Court ruling will be requested, but there is no guarantee that it will be granted. If granted, a stay would prohibit action on the June 22 ruling until the state Supreme Court has ruled on the case.
The second option is to work on legislation, which many legislators are willing to do. We just need to come up with the proper fix. That cannot take place until the Legislature in 2016.
Additionally, the trade groups are looking into potential insurance options. There are several self-insured groups in the state as well as commercial insurance. There is a clause in the workers comp statute that says workers comp is required only for those employers who have three or more employees. However, the courts have muddied that issue to the point that we don’t even know what three might be.
Bottom line, you need to be looking at coverage now. Then you might ask, how in the heck did we get here?
Since the creation of the state’s workers’ compensation system in 1929, New Mexico, like numerous other states, has exempted agriculture from paying workers compensation insurance. When New Mexico’s entire workers comp system was overhauled by the New Mexico Legislature in the early 1990’s, the body still saw the reasoning behind and the need for the exemption and retained it.
It has long been the policy in this nation to maintain a cheap, yet wholesome, food supply. That policy has resulted in the favorable treatment of agriculture in economic matters. The agricultural sales system is like few others. Food is a commodity. When it is ready to go to market, ranchers and farmers are forced to take the price that is offered on that day. There is no warehouse to stack calves in until the price meets your needs and desires.
This is a hard concept to explain to someone who has always gotten their food at the grocery store or at restaurants without getting their hands dirty or taken any risk other than driving to these establishments. After dealing with the press on the issue recently, I certainly need to improve on the explanation. It is like I am speaking Greek … with all due respect to anyone who speaks Greek, is Greek or comes from Greek heritage or who is likely to become offended by this long-used expression.
A group called The New Mexico Center on Law & Poverty (Center) hit New Mexico agriculture’s radar within the last decade. According to its website, it “is dedicated to advancing economic and social justice through education, advocacy and litigation. We work with low-income New Mexicans to improve living conditions, increase opportunities and protect the rights of people living in poverty.”
Sounds laudable, but what that has really meant is that Center has taken direct aim at agriculture in the guise of people in poverty. The group has made it clear from the beginning that it is after “big” dairies and row croppers. Unfortunately ranchers are acceptable collateral damage.
As stated previously, the Center first went to the Legislature and the Workers Compensation Advisory Council. There were many ugly battles and lots of theater. Although they did eventually gain the support of the Advisory Council, the Legislature saw through their tactics.
There was a working group mandated by the Legislature that ag representatives participate in for two years to no avail. Some ranchers and farmers already carry workers comp insurance to protect themselves.
Others rely on their liability insurance to cover workers’ health and well being. Not to mention the amenities that many ranches and farms provide that may include housing, utilities, transportation, beef or groceries, and even telephone. Until the Affordable Care Act, some of these family operations provided health insurance for their employees.
When all of this was explained to the Center by the most reasonable members among us, the response was “Then open up your books to us.” Clearly, that wasn’t/isn’t happening.
In about 2009 the Center filed a suit (Griego) on behalf of injured ag workers in Bernalillo District Court. There was theater with that as well complete with a march on the court house in downtown Albuquerque. There were interesting comments from the marchers if you understood Spanish. (Again with the disclaimer of all due respect to anyone who speaks Spanish, is Spanish or Hispanic and so on…)
At that point in time the Richardson Administration advised the Workers Compensation Administration (WCA) that the defense of the case would be handled by the Office of the Attorney General, then Gary King. Despite the fact that the case was filed in the wrong venue – WCA has its own judicial system set form by the 1990s reform legislation, the AG’s office didn’t file a motion to dismiss the case.
Rather, without consulting ANYONE in agriculture, not even the Attorney General himself, the AG’s office stipulated to some 372 “facts” about agriculture and workers comp insurance. Those “facts” included one that said the insurance would cost ranchers and farmers only one percent of their payroll cost and another that said that agriculture had routinely abused its’ workers for more than 100 years.
With no defense at all the Bernalillo Court found in favor of Griego AND took it one step further. The judge ruled that the agricultural workers comp exemption was unconstitutional. That wasn’t within the purview of that court, but none the less the ruling was made.
By this time Richardson was gone. The Martinez Administration allowed the WCA to represent itself. WCA appealed to the Court of Appeals, but choose not to appeal the constitutionality part of the ruling.
In late 2013 the Appeals Court offered a decision on Griego. Most of the case had been settled and had become moot, but the Court noted that there had been no challenge to the constitutionality question and that it thus remained open.
Along the way the Center filed another case (Rodriquez) with the Workers Comp Court, the correct court. Because of the exemption, the case was denied. The Center then filed an appeal with the state Court of Appeals. That is the case that generated the adverse ruling this past June.
Like taxation without representation, ranchers and farmers have never had their day in court to defend themselves.
The reality is that the National Council on Compensation Insurance (NCCI) estimates that for ranchers the cost of insurance should be between 17 and 19 percent of payroll. However, when ranchers have tried to purchase the insurance the cost was more like 25 percent of payroll with some companies providing estimates as high as 35 percent. The rates are lower for other ag operations, but still will probably be 10 percent or higher. Nowhere near the one percent the Center claimed and the AG’s office agreed to.
The NCCI rates are a nation number for established insurance pools. There will have to be pools developed in New Mexico over as much as a five-year period based on “experience ratings” before rates here will even approach the national numbers. In small groups, just one accident can drive the cost of the insurance up for everyone involved dramatically.
Other business groups offer trainings to their members that may aide in reducing costs and workplace accidents. Those are being explored by agricultural groups.
Another thing to remember is that under workers comp, you can no longer take an injured employee to the doctor and/or hospital and pay directly for the required care. ALL claims must be filed with the WCA.
This is a long story but it is not over yet. Please watch the New Mexico Cattle Growers’ Association website at www.nmagriculture.org , the Facebook page and future issues of the Stockman for more information.
Sorry…there is no room for any good news this month.