Workers’ Comp Reform Will Save Employers Millions

Reforms will also increase benefits to workers
March 2, 2007

I have long advocated reforms that improve state government, create jobs and enhance the economic climate in Upstate New York. In line with these goals, I am pleased to announce that this week the governor and Legislature came to a historic agreement to revamp the workers’ compensation system; a move that stands to increase benefits for workers and lower costs to employers by hundreds of millions of dollars.

As it stands today, our workers’ compensation system has high premiums for business and low benefits for employees. Many of the measures in this reform package, originating from my legislation and conference’s proposals, work to address that. Over the last few years, I have traveled the state as Chairman of the Assembly Minority Manufacturing Task Force. I listened to local leaders who have seen jobs leave our communities, small business owners who have been stretched thin from burdensome premiums, and workers that see very little benefit payout. It was evident that Albany must restructure the entire system.

Cost saving measures to help business and increasing the injured workers’ benefit to improve their quality of life became the focal point of the reforms needed. This week’s agreement brings those changes to fruition. The current maximum weekly benefit rate for injured workers will first increase from $400 to $500, and then increase over a period of four years to two-thirds of the state’s average weekly wage. Furthermore, the benefit for injured workers will be annually indexed to provide further increases to counter the effect of inflation and increased cost-of-living; this will keep benefits in tune with reality and provide meaningful help to injured workers.

Other measures in the agreement provide cost savings to businesses by capping permanent partial disability benefits, while continuing medical care and establishing a safety net to assist injured workers’ return to employment and intervene during cases of severe hardship. We also will see new stronger anti-fraud measures put into effect, along with new practices that will improve the collection of data on premiums and losses. Our hope is that adding transparency will bring additional cost-savings and make for good common-sense government. Lastly the workers’ compensation system will include new measures to expedite the compensation hearing process thereby streamlining the course of treatment and return to work.

This week’s agreement is a good one, but our job is not done yet. We can further help upstate employers by updating New York’s antiquated Scaffold Act (Labor Law Sections 240-241). As it is now, this law requires contractors to assume total liability for employee injuries regardless of fault or work conditions. No other state provides a cause of action for construction-related injuries without some recognition of employee negligence. New York’s total liability standard has dramatically increased liability insurance rates for contractors, contributed to non-renewal of liability insurance policies, and resulted in the cancellation of insurance for builders working in New York. I assure you that as the legislative session continues, I will be pushing to reform the Scaffold Act this year.