Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
JULY 17, 2025
Subject
SUBJECT: WORKERS’ COMPENSATION TEMPORARY STAFFING SERVICES BENCH
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute Modification No. 1 to the Workers’ Compensation Temporary Staffing Services Bench Contract No. PS48678001 with Lancesoft, Inc. and Contract No. PS48678002 with The Best Claims Solutions in an amount Not-To-Exceed (NTE) $1,000,000, increasing the cumulative contract value from $500,000 to $1,500,000.
Issue
ISSUE
In November 2023, Metro established the Workers’ Compensation Temporary Staffing Services Bench (Bench) for an amount NTE $500,000 for a five-year term with two temporary staffing agencies. The Bench successfully provided qualified temporary workers’ compensation staff to fill vacancies due to unexpected, prolonged absences by full-time employees of the Workers’ Compensation (WC) division of the Risk Management Department and high claim caseloads.
To date, 11 task orders have been issued under the Bench, for a total cumulative value of $475,104, leaving $24,896 in available contract authority.
The unexpected increase in the Bench utilization is due to the rise in unforeseen vacancies resulting from extended leaves of absence attributed to illnesses, disabilities, attrition, and promotions. An increase in the cumulative Bench contract value will ensure that the WC division can continue to administer workers’ compensation benefits on time and provide injured employees the medical care they need without disruption.
Background
BACKGROUND
Metro’s workforce of 11,283 employees reports an average of 1,500 WC claims annually. Metro’s current open WC claims are approximately 2,100. The WC division administers the following benefits as provided under the law:
• Medical Care - To help an employee recover from an injury or illness caused by work. This includes doctor visits and other treatment services, tests, medicines, equipment, and travel costs reasonably necessary to treat the injury.
• Temporary Disability Benefits - Payments if the employee loses wages because the injury prevents them from doing their usual job while recovering.
• Permanent Disability Benefits - Payments if the employee doesn’t recover completely and their injury causes a permanent loss of physical or mental function that a doctor can measure.
• Death Benefits - Payments to the employee’s spouse, children, or other dependents if the employee dies from a job injury or illness.
• Supplemental Job Displacement Benefit - A voucher* to help pay for retraining or skill enhancement.
*Vouchers pay for retraining or skill enhancement if the employee is eligible to receive permanent disability benefits or the employee does not return to work for the employer.
The Workers’ Compensation division, which consists of 33 FTE’s, assists employees injured on the job and processes benefits due to them. It also provides quality customer service in claims handling, processes medical bills in a timely manner, and reviews all incoming legal and medical mail under the California Labor Code, which mandates strict timelines for compliance.
Discussion
DISCUSSION
The WC Temporary Staffing Services bench contracts were intended for a five-year term so that if the WC division experienced vacancies longer than 30 days, it could avail itself of industry professionals provided by temporary staffing agencies. Doing so would ensure that injured Metro employees receive the medical care and assistance needed. Maintaining staffing levels also allows Metro to comply with the Labor Code and avoid unnecessary penalties for noncompliance.
In California, the Labor Code governs the workers’ compensation system and establishes a structure aimed at balancing the rights and responsibilities of both employers and injured employees. In order to receive WC benefits, injured workers must report an injury and file a claim. Meanwhile, employers must administer the benefits outlined above in accordance with prescribed timelines or face fines or penalties. For example, employers who unreasonably delay temporary disability payments may owe a 10% self-imposed penalty, and potentially a 25% penalty under Labor Code §5814 for unreasonable delays in any benefit.
To date, the division has already expended $475,104 (95%) of the cumulative NTE Bench contracts value of $500,000. Since the Bench contracts’ inception, the WC division has experienced thirteen vacancies attributed to retirement, promotions, resignations, or long-term leave due to disability. The average duration of each vacancy was four months.
In partnership with the Chief People Office, the WC division has made great strides to fill vacant positions. Currently, the division has three vacancies and one position occupied by an employee on extended leave.
The requested increase of $1,000,000 in Bench contract value is sufficient to provide, if needed, temporary support for one Senior Workers’ Compensation Analyst and the equivalent of one and a half Assistant Workers’ Compensation Analysts to last through November 2028, the end of the five-year contract term. This represents an analysis comparing the current burn rate of the contract and considering future resource allocation strategies. Additionally, the division is evaluating current caseload distribution and will be making adjustments to maximize capacity. Staff further expect that reliance on the contract will be offset by the addition of a Workers’ Compensation Analyst position that was approved with the FY26 budget cycle. As with every budget cycle, staff will continue to assess its personnel needs and submit FTE requests as needed.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Receiving timely medical care is critical to injured employees. Approval of this item will support the Workers’ Compensation division’s ability to administer benefits promptly despite unforeseen vacancies.
Financial_Impact
FINANCIAL IMPACT
The FY26 Budget includes $2,367,500 for Professional and Technical Services under cost center 0531 (Non-Departmental - Operations Risk Management), Project 100004, PRMA - Workers’ Compensation, which will be sufficient to cover this request.
Since this is a multi-year contract, the cost center manager and the Interim Chief Transit Safety Officer will be accountable for budgeting the cost in future years.
Impact to Budget
The sources of funding for this action will come from federal, state and local resources that are eligible for bus and rail operations.
Equity_Platform
EQUITY PLATFORM
The benefits administered by the Workers’ Compensation division assist Metro employees in recovering from work-related injuries. The majority of WC claims are filed by frontline employees, of which 62% are filed by Bus Operators. Providing the necessary medical care more promptly returns injured employees to work and allows Metro to continue to provide transportation services and benefits to customers.
Vehicle_Miles_Traveled_Outcome
VEHICLE MILES TRAVELED OUTCOME
Vehicle Miles Traveled (VMT) and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
While this item does not directly promote transit use, ridesharing, or active transportation, it plays a crucial role in Metro operations by sustaining the temporary staffing contract for Workers' Compensation administration. Ensuring timely benefits distribution and uninterrupted medical care for injured employees helps maintain workforce stability and operational efficiency. A well-supported workforce contributes to reliable transit services, indirectly aligning with Metro’s agency-wide VMT Reduction Target by enabling continued public transportation access and minimizing disruptions that could lead to increased vehicle miles traveled. Therefore, this item is consistent with the broader goals of reducing VMT.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendation supports the strategic plan Goal 1, “Provide high-quality mobility options that enable people to spend less time traveling.” As well as Goal 1.2. Approval of the temporary staffing services contract supports Metro’s goal to invest in a world-class bus system that is reliable, convenient, and attractive to more users for more trips. Metro’s bus network is the foundation of its public transport system and carries over 70% of its transit passengers. Ensuring injured employees receive the care they need supports Metro’s ability to maintain an adequate workforce to provide reliable service.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board may choose not to approve the recommendation. However, this is not recommended since the existing Bench contract authority is estimated to be exhausted by September 2025. Without additional authority, the Workers’ Compensation division cannot rely on temporary staffing during vacancies, which may impact the quality of service and the timely receipt of benefits that injured employees are entitled to.
Next_Steps
NEXT STEPS
Upon Board approval of this action, staff will execute Modification No. 1 to the Workers’ Compensation Temporary Staffing Services Bench Contract Nos. PS48678001 and PS48678002, and continue to compete and award individual task orders for workers’ compensation temporary staffing services.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Contract Modification/Change Order Log
Attachment C - DEOD Summary
Prepared_by
Prepared by: Claudia Castillo del Muro, Executive Officer, Risk Management, (213) 922-4518
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer, (213) 922-4471
Reviewed_By
Reviewed by: Kenneth Hernandez, Interim Chief Risk, Corporate Safety, and Asset Management Officer, (213) 922-2990
