March 13, 2007
With strong praise for the Council, Spitzer signs workers' comp reforms into law
With strong praise for the work of The Business Council's leaders in crafting a new workers' compensation reform agreement, Governor Eliot Spitzer Tuesday signed the reform package into law.
"Workers' compensation reform is a critical component of restoring the state's competitiveness," said Governor Spitzer said at the bill-signing ceremony at the state Capitol. "Today, New York is reversing a trend that hampered business growth for years and we are better protecting workers in the event of job-related injury."
The Governor also released a letter sent Tuesday to three leaders of state agencies, directing them to initiate a series of additional regulatory reforms to augment the reforms contained in the agreement. The letter was sent to: Eric Dinallo, acting superintendent of the state Department of Insurance; Patricia Smith, commissioner of the state Department of Labor; and Donna Ferrara, chairman of the state Workers' Compensation Board.
The Governor was joined at the ceremony by Senate Majority Leader Joseph Bruno, Assembly Speaker Sheldon Silver, Senate Minority Leader Malcolm Smith, Assembly Minority Leader James Tedisco, Business Council President Kenneth Adams, and Denis Hughes, president of the state AFL-CIO.
The Governor and the other legislative leaders had strong praise for the efforts of Adams and Hughes and their staff members in the negotiations.
Governor Spitzer said Adams has been "extraordinarily productive" in just his first few months as president of The Business Council.
"He came to this job with renewed vigor," the Governor said. "This [agreement] is the fruit of how successful he has been, and will continue to be, in the job.
"Ken has really been spectacular throughout this process, and I am thrilled that you are here," Governor Spitzer added.
Adams and Hughes both thanked Business Council staffers Ed Reinfurt and Elliott Shaw for their efforts, and Hughes said the agreement shows a new commitment of business and labor to work together to make New York more competitive.
"The message is that labor and business can come together to make this state competitive," Hughes said. "We are all committed to getting this economy moving forward so that we have an economy that we can all be proud of."
The legislation, which Governor Spitzer made a top priority in his new administration, will increase benefits for injured workers for the first time in more than a decade, while reducing employer costs by 10 to 15 percent. New York State's workers' compensation premiums have been among the highest in the nation, despite low weekly benefits for injured workers.
In his letter to the three state agency heads, the Governor asked the agencies to:
- Collect and assess data relating to worker-related injuries and claims.
- Streamline the claims review process.
- Design new diagnostic and treatment protocols for medical professionals.
- Develop training materials that will assist administrative law judges in making consistent case determinations.
"This reform package is welcome news for employers and workers alike throughout New York State," Adams said. "Employers will see their costs come down while injured workers will get better benefits. In the end, it's a vital step toward making New York a more attractive place to launch or grow a business."
Scott Stevens, president of Dimension Fabricators, a Schenectady-based manufacturer of steel products and a long-time Council member, also participated in the ceremony.
"As a New York manufacturer, we've had workers' compensation as one of our great burdens for years," Stevens said. "Even with a good safety record, this cost is right behind health insurance in our expense column. These reforms will reduce one of New York's historically high business costs, helping us compete with our rivals in other states and countries."
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 maxed 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 indemnity benefits in PPD cases expire.
- Provides a "safety net" would be established for PPD cases determined to involve extreme hardship.