JEFFERSON CITY -- Sen. John Loudon, R-West St. Louis County, will host a town meeting to address the issues of workers' compensation reform and unemployment compensation reform at 9:30 a.m. on Tuesday, Dec. 2, in the UAW Hall at the Ford Motor Company Assembly Plant in Hazelwood, 6250 N. Lindbergh.

Loudon, who serves as chairman of the Senate Committee on Small Businesses, Insurance and Industrial Relations, plans to file legislation that will make a variety of changes to Missouri's complicated and outdated workers' compensation and unemployment laws.

"Missouri's workers' compensation laws simply do not work anymore, they do not benefit workers or employers," said Loudon. "It's imperative that we make changes to these laws in the upcoming session since workers' compensation laws have been identified as one of the reasons Missouri has lost so many jobs. Furthermore, the unemployment fund is broke and will have to borrow an additional $100 million this year to pay our debt."

During the 2003 legislative session, Loudon sponsored legislation that workers' compensation awards would be reserved for those whom work was "the dominant" factor and not simply "a" factor, as the law presently reads. As a practical matter, it would have excluded from workers' compensation claims personal health conditions, injury from idiopathic causes and preexisting conditions.

Only an injury that took place while a worker performed his job would be covered by workers' compensation. Awards would be reduced by the amount of permanent partial disability determined to be preexisting.

"No one wants to take away compensation from employees who have been injured on the job," Loudon said. "However, over the years judges have expanded workers' comp laws to cover almost any kind of injury or illness."

Last session Loudon passed Senate Bill 2, which would have given the state an alternative to borrowing from the federal government to cover shortfalls in the unemployment insurance fund. Gov. Bob Holden vetoed the measure.

"Federal law requires this coverage, which is financed by employer-paid premiums," said Loudon. "If state reserves become depleted, the federal government lends revenue to the state, which is repaid by a 30 percent surcharge on employer premiums. The bonding provision gives us an alternative."

The federal government charges approximately 6 percent interest on these loans. The rate on the bonds is estimated at between 2.5 and 3.5 percent.

According to Loudon, by using the bonding approach interest costs would drop by half, sparing consumers and businesses the additional expense the employer surcharge would entail.

"SB 2 would have reduced some of our more liberal payouts," Loudon said. "A worker fired for misconduct would have to get another job in order to be eligible for benefits in the future. This brings us in line with 40 other states. Our current system provides for a minimal penalty and then these problem employees are entitled to benefits."

It was estimated that the measure would have saved the system $50 to $100 million annually.

"During a fiscal crisis, the state has to save money whenever possible," said Loudon. "Unemployment compensation reform just makes good sense."

For further information, contact Loudon at (573) 751-9763.