Provides for the enrollment of a surviving spouse, a surviving domestic partner, a dependent child or children, or any other person entitled to a death benefit in direct deposit for compensation payments.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7558
SPONSOR: Reyes TITLE OF BILL:
An act to amend the workers' compensation law, in relation to providing
for the enrollment of certain persons in direct deposit for compensation
payments
PURPOSE OF BILL:
To ensure that all dependents entitled to death benefits under the Work-
ers' compensation law receive those benefits by direct deposit if they
so choose
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends paragraphs a and b of subdivision 9 of section 25 of
the workers' compensation law to clarify that those persons entitled
to'direct deposit payments of death benefits upon request include a
surviving spouse, a surviving domestic partner, a dependent child or
dependent children, and any other person entitled to a death benefit
under section sixteen of the workers' compensation law, and to authorize
the workers' compensation board to issue regulations as necessary to
administer the direct deposit of payments to these persons.
This section also adds paragraph e to subdivision 9 of section 25 of the
workers' compensation law to provide for a penalty against an employer
or insurance carrier who fails to enroll an eligible person in direct
deposit within twenty-five days after a request has been made.
Section 2 establishes the effective date.
JUSTIFICATION:
Chapter 253 of the laws of 2020(S7210/A7579) mandated that insurance
carriers provide direct deposit for compensation payments upon the writ-
ten request of an injured worker or a person entitled to death benefits
under the workers' compensation law. The legislation also required that
such personS be given notice of the direct deposit option and the means
necessary to enroll.
Chapter 9 of the laws of 2021 (S1298/A1251) made technical changes to
effectuate the intent of the law. The implementing regulation makes
clear that all carriers, self-insured employers, third-party administra-
tors and special funds must comply with the requirement to offer the
direct deposit option to injured workers and to those eligible for death
benefits.1
Since the law took effect in July of 2021, persons receiving workers'
compensation death benefits from the city of New York have been advised
by city officials, despite what appears to be the plain language of the
current law, that they are not entitled to receive payments by direct
deposit. Despite years of trying to enroll in direct deposit with the
city of New York, dependents have not been allowed to do so, but have
continued to receive payments by mail, leading to delayed and missed
payments. According to the Consumer Financial Protection Bureau, "direct
deposit is usually safer and faster than getting a paper check."2 Those
persons denied the opportunity to receive payments by direct deposit are
subject to the heightened risk that their payments may be lost or
stolen.
This bill makes clear that any dependent receiving death benefits under
workers' compensation law shall have the option to receive those bene-
fits by direct deposit and that those benefits shall be provided through
direct deposit upon request of the dependent.
PRIOR LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS:
To be determined
EFFECTIVE DATE:
This act shall take effect immediately.
1 12 NYCRR 300.26.
2 Consumer Financial Protection Bureau, Should I enroll in direct depos-
it?, available at https://www.consumerfinance.gov
/ask-cfpb/should-i-enroll-indirect-deposit-en-1027/; see also TSA agent
charged with stealing $22K check mailed to NYC defense lawyer, Daily
News, April 17, 2024 available at
https://www.nydailynews.com/2024/04/16/tsa-agent-charged-with-stealing
-22kcheck-mailed-to-nyc-defense-lawyer/
STATE OF NEW YORK
________________________________________________________________________
7558
2025-2026 Regular Sessions
IN ASSEMBLY
April 1, 2025
___________
Introduced by M. of A. REYES -- read once and referred to the Committee
on Labor
AN ACT to amend the workers' compensation law, in relation to providing
for the enrollment of certain persons in direct deposit for compen-
sation payments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraphs (a) and (b) of subdivision 9 of section 25 of
2 the workers' compensation law, as amended by chapter 9 of the laws of
3 2021, are amended and a new paragraph (e) is added to read as follows:
4 (a) Compensation payments shall be required, upon the written request
5 from an injured worker or a person entitled to a death benefit provided
6 by this chapter, to be deposited directly in a bank for any purpose to
7 an account in the name of such injured worker or person entitled to
8 death benefits, and duly filed in accordance with such regulations. Each
9 person eligible to receive payment of compensation or death benefits
10 under this section shall be notified of the option to receive such
11 payment in the form of direct deposit from the carrier or self-insured
12 employer, such notice to be promulgated by the board. Such eligible
13 person shall also be provided the means necessary to enroll in direct
14 deposit pursuant to this paragraph in a manner specified by regulations
15 of the board at the same time as notice is given pursuant to this para-
16 graph. Persons entitled to a death benefit who are eligible to receive
17 compensation payments by direct deposit upon written request pursuant to
18 this subdivision shall include:
19 (i) a surviving spouse;
20 (ii) a surviving domestic partner as defined in section four of this
21 chapter;
22 (iii) a dependent child or children; or
23 (iv) any other person entitled to a death benefit under section
24 sixteen of this article.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08432-01-5
A. 7558 2
1 (b) The board is hereby authorized to promulgate reasonable rules and
2 regulations, as may be necessary, to administer the direct deposit of
3 compensation payments, including payments to a surviving spouse, a
4 surviving domestic partner as defined in section four of this chapter, a
5 dependent child or children, or any other person entitled to a death
6 benefit under section sixteen of this article. Such regulations shall
7 permit the deposit of compensation payments to be split between multiple
8 accounts by either a dollar amount or exact percentage, provided, howev-
9 er, such regulations may establish a minimum dollar amount and may limit
10 the maximum number of partial deposits allowed.
11 (e) (i) If an employer or insurance carrier fails to enroll an eligi-
12 ble person in direct deposit within twenty-five days after a request has
13 been made pursuant to paragraph (a) of this subdivision, there shall be,
14 paid by the employer or, if insured, the insurance carrier, a penalty of
15 twenty percent of the compensation due per pay period, which shall
16 accrue for the benefit of the injured worker or such worker's surviving
17 spouse or dependents, and an additional penalty of three hundred
18 dollars. Such penalties shall be paid to such eligible person.
19 (ii) The board may, upon request by an employer or insurer, excuse
20 such employer or insurer from such penalty if such person could not be
21 enrolled in direct deposit due to circumstances outside of the control
22 of such employer or insurer.
23 § 2. This act shall take effect immediately.
