(March 6, 2007)
comp reform bill is approved by the Legislature
Council hails the Governor, Senator Bruno,
Speaker Silver, and others for closing the deal
Governor Eliot Spitzer's workers' compensation reform bill has passed the state Legislature, following years of advocacy by The Business Council and 12 weeks of intensive negotiations involving the Spitzer administration, legislative leaders, Business Council President Kenneth Adams, and the state AFL-CIO.
"This is a historic step forward toward improving New York's business climate," Adams said. "The reform package provides support to New York State's business owners and workers alike. It is also a significant achievement for The Business Council—one that we have been seeking for years."
The reform package includes new limits on the duration of benefits in "permanent partial disability" cases, which have driven New York's workers' comp costs to a level that has been some 80 percent above the national average. It also increases the maximum weekly benefits available to injured workers.
Speaking at a press conference last week, Governor Spitzer said the reform deal should cut employers' costs by 10 to 15 percent at the start with more savings to follow.
Adams praised the collaboration and determination of all parties at the table.
"This achievement is a credit to Governor Spitzer, to Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver and their colleagues in the state Legislature, and Denis Hughes and his staff at the AFL-CIO. We look forward to collaborating with them and with our friends in organized labor to address many other policy challenges that are holding back the growth of jobs and businesses in New York State."
The new law was also hailed by leaders of New York's business community on The Business Council's Board of Directors.
"This achievement reflects many years of effort by The Business Council's leadership and staff, and we salute Governor Spitzer, Senator Bruno, Speaker Silver, and Kenneth Adams and the Business Council staff for closing this deal," said Kirk Gregg, executive vice president and chief administrative officer at Corning Incorporated and co-chairman of The Business Council's Board of Directors.
"This package of workers' compensation reforms will be especially beneficial to New York's manufacturing sector, which Governor Spitzer has rightly recognized as a vital sector of the innovation-driven economy that is New York's best hope for future prosperity," said Linda Sanford, a senior vice president at IBM and co-chairman of The Business Council's Board of Directors.
Greg Harden, president and CEO of Harden Furniture Company in McConnellsville, Oneida County, and a long-time member of the Council's Board of Directors, said, "This agreement will help my company compete by significantly reducing a key cost of doing business, and I know many other Upstate businesses will also find that this significantly enhances their competitiveness. It's great to see years of effort by The Business Council help produce such a noteworthy legislative achievement."
The new law:
- Limits the number of years during which benefits would be available in permanent partial disability cases, which now account for a high percentage of costs in New York's comp system. The previous law allowed lifetime payment of cash benefits in all such cases. Now, based on current caseloads, it is estimated that benefits will be capped at eight years or less for more than 90 percent of cases, and that the average PPD claimant will get 344 weeks of benefits upon classification.
- Increases the maximum weekly benefit for injured workers from $400 to $600 over three years. In the fourth year, the maximum weekly benefit will become two-thirds of the average weekly wage in New York, with the maximum thereafter adjusted annually beginning in the fifth year.
- Creates new programs designed to help injured workers get workers prompt medical treatment and return to gainful employment.
- Creates strong new anti-fraud measures.
- Eliminates the Second Injury Fund, which has forced significant recent increases in surcharges that are added to all employers' workers' compensation bills.
- Continues medical services for workers whose benefits in PPD cases expire would continue.
- Provides a "safety net" would be established for cases determined to involve extreme hardship.
In addition, Governor Spitzer has directed the state superintendent of insurance to pursue other key reforms administratively, including the design of an expedited hearing process, implementation of factual medical guidelines to determine accurately the degree of disability in comp cases, the design of new treatment guidelines, the design of new return-to-work initiatives to help injured workers, and new training for administrative law judges who hear workers' comp cases.