Senator Farley Reports Nys Legislature To Reform Workers Compensation

Hugh T. Farley

March 02, 2007

I recently met with several local small business leaders, including a
Schenectady businessman who is this year’s Chairman of the Leadership
Council of the National Federation of Independent Business. During our
meeting, we discussed two of the biggest concerns of small businesses
today, which are health insurance costs and workers’ compensation costs.
I am pleased to report that, a couple of days after this meeting,
agreement was reached on reforming New York’s workers’ compensation laws.
This has long been a priority of mine. Our system has been broken: high
premiums have cost businesses jobs, while low benefits have failed to
adequately assist many injured workers.
With input from both business and labor leaders, the New York State
Senate worked with the Assembly and Governor in coming up with an agreement
on workers’ compensation reform that will reduce premiums and save
businesses a billion dollars, while also increasing benefits for injured
workers for the first time in over a decade.
Most of the reforms reflect proposals that have been included in
bills passed by the Senate over the past decade, as well as initiatives
raised at workers’ compensation roundtables held by the Senate which
brought business and labor together to work out a very complicated issue.
The reforms will reduce workers’ compensation premiums by at least 10
to 15 percent. Much of the savings ($822 million) result from a new
schedule for permanent partial disability (PPD) benefits. This area
affects a relatively small number of workers, but accounts for the vast
majority of costs of the workers’ comp system. The agreement will, for the
first time, place a time limit on receiving PPD wage benefits, ranging from
about 4 to 10 years instead of the current lifetime benefit. However,
these employees will continue to be eligible for necessary medical
Employers will be able to receive credits on their workers’ comp
premiums by creating one or more of the following: a program to help
injured employees get back to work; a worker safety program; or a drug and
alcohol program.
The maximum workers’ compensation benefits will increase for the
first time in 15 years, with the cap being raised from the current $400 per
week level to an amount equal to two-thirds of the average weekly wage in
New York State. The increase will be implemented over a four-year period,
after which time the maximum level will be tied to an annual indexing of
the average weekly wage in the State. A safety net will be created for
disabled workers to help them get back to work, and more assistance will be
available for those persons who are classified as more than 80 percent
Penalties and sanctions will be increased for workers’ compensation
fraud, whether it is committed by businesses or by employees.