New York finally has a workers’ compensation agreement that both employees and employers can be excited about. This week the Legislature and Governor Spitzer announced a monumental agreement to reform New York State’s workers’ compensation system, one that not only increases benefits for injured workers but also reduces costs for employers by 10 to 15 percent.

Workers Compensation has long been a major issue that hurt economic development efforts here in Central New York. The fact is employers in New York State have some of the highest workers compensation costs in the nation. Current workers’ compensation gives low benefits and requires high premiums. An agreement was needed that would help injured workers better make ends meet, without forcing small businesses to close their doors. This agreement will accomplish both.

This agreement was the product of not only state officials, but also business leaders and labor unions. The state Business Council has argued for years that that the current workers’ compensation system was putting New York at a disadvantage, while the AFL-CIO has been fighting for much needed increases in benefit checks for injured workers. Both groups worked together with the Legislature and Governor to craft an agreement that offers real solutions to the New York’s problem of high cost with low benefits.

Under the new agreement, the maximum benefit rate for injured workers is increased over a four year period from $400 to two-thirds of the average weekly wage in New York. In year 1, the rate is raised to $500; in year 2, to $550; and in year 3, to $600. In year 4, the rate will be indexed to the average weekly wage. In addition, the minimum weekly benefit will increase from $40 to $100.

The agreement will also provide hundreds of millions of dollars in cost savings by:

• setting the maximum number of years that a small population of claimants can receive cash benefits. Medical services will continue, however, and a safety net will be established to help get these workers to return to gainful employment and to intervene in cases of extreme hardship;
• creating innovative programs to get workers prompt medical treatment and to help them return to gainful employment; and
• creating strong anti-fraud measures, including the ability to stop work on a job site where a company has failed to purchase workers’ compensation insurance for its workers and higher criminal penalties for violators.

For the first time in more than a decade, workers will see benefits raised and businesses will be able to keep insurance costs down. It is a win-win agreement which benefits everyone, and strengthens New York’s economic competitiveness. Reforming the workers’ compensation system in a bi-partisan fashion is another example of how the legislature in Albany is working together to produce real results for the people of Central New York.