STAFF CONTACT :
BILL
SUBJECT
DATE
This bill would amend the state workers' compensation law and increase the maximum statutory disability benefit to $380 per week on July 1, 2007 and to $440 per week on July 1, 2008. The Business Council opposes this bill.
Higher Maximum Benefits are already possible
New
York State is one of only five states in the country that has a statutory
disability insurance requirement. So, the vast majority of employers
in the country are able to deal with income
replacement for short term absences voluntarily. Although the last
increase in the maximum
statutory disability benefit was enacted in 1989 to $170 per week,
it has been and remains
possible for employers to purchase disability insurance policies or
institute salary continuation
programs far above the current $170 per week maximum or the 50% of
average weekly wage
level. Disability benefits are one of a range of fringe benefit arrangements
that comprise an
employer's total benefit package. Employers and their employees
or collective bargaining
representatives are best left to determine the proper level of benefits
for a particular employer
and employee group based on industry, location and affordability.
Higher benefits bring higher costs
Increasing
the maximum disability benefit will, as a simple economic issue, increase
the amount of benefits paid and, in turn, increase costs for everyone's
disability insurance. This is especially
significant since the maximum benefit amount is increasing by 123%
in 2007 and then another
16% in 2008. With no system reforms to balance the increased costs
with increased savings, this
additional cost will be recouped by either increasing the cost of the
goods or services provided by
the business to its customers or by reducing the level of other existing
or anticipated employee
fringe benefits. It is puzzling that no fiscal implications were noted
on the sponsor's memo.
System reforms are needed
For several years,
The Business Council has supported a package of workers' compensation
system reforms that have included increases to the maximum statutory disability
benefit. The
-over-
need for system reform is greater than ever and we would like to see a change
in the maximum
disability benefit remain a part of an overall reform package. Certainly, it
is easier to simply peel
off the disability benefit portion and move on it but we need system reform.
We re-issue our
challenge to take the tougher road and improve the whole workers' compensation
system.
For these reasons, The Business Council opposes this legislation and respectfully urges that it not be enacted.