Alesi: Landmark Agreement Reached On Workers’ Comp

James S. Alesi

January 13, 2009

Senator Jim Alesi (R-Perinton) joined Governor Eliot Spitzer and legislative leaders to announce an agreement on workers’ compensation reform that will greatly reduce costs to businesses and increase benefits for workers in New York State. Senator Alesi has carried the ‘Unshackle Upstate’ workers’ compensation reform bill for years as Chairman of the Senate Committee on Commerce, Economic Development and Small Business.

"The agreement announced today was largely based on a package put forth by 'Unshackle Upstate,’" Senator Alesi said. "This was a compromise effort by the business and labor communities along with the energized leadership of the Governor and the persistent leadership of Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver. I would like to especially acknowledge the efforts of Assemblyman Joseph Morelle who has carried this legislation for many years. I would also like to acknowledge Senator George Maziarz and Assemblywoman Susan John who chair the Labor Committees in their respective Houses. For all of New York this is a strong and powerful move forward for job retention and creation and for the entire world, it is a message that New York means business."


Under the agreement, benefits for injured workers will be increased for the first time in more than a decade, and employer costs, which are among the highest in the nation, will be reduced by 10 to 15 percent with savings to grow over time. The agreement was hailed by business and labor advocates statewide.

"I couldn't be more pleased with the way our local delegation pulled together to champion this goal as put forth by Unshackle Upstate," said Sandy Parker, president and CEO of the Rochester Business Alliance, which has been a leader in the Unshackle Upstate coalition. "Our legislators clearly understood that the workers' compensation reforms we were seeking are essential to revitalizing our region's economy, and will benefit both business and workers."

Key elements of the comprehensive reform package include:

>The maximum weekly benefit for workers will be increased from $400 to $500 in the first year, $550 in the second year, $600 in the third year, and to two-thirds of the average weekly wage in New York in the fourth year. Once the maximum benefit reaches two-thirds of the average weekly wage, the maximum benefit will be indexed annually;


>The minimum weekly benefit will be increased from $40 to $100;


>Cost savings worth hundreds of millions of dollars will be acheived by setting 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 these workers return to gainful employment and to intervene in cases of extreme hardship;


>Innovative programs are being established to get workers prompt medical treatment and to help them return to work;


>Strong anti-fraud measures will be in place, including the ability to stop work on a job site where a company has failed to purchase workers’ compensation insurance for its workers, higher criminal penalties for violators and debarment provisions;


>An expensive fund known as Second Injury Fund that is now financed by assessments passed through to employers will be closed. The fund was initially set up to help injured World War II veterans, but is now used instead by some insurance carriers as a costly loophole to avoid paying claims; and


>The Compensation Insurance Rating Board, which helps determine workers’ compensation costs for employers, will sunset as of February 1, 2008. The Superintendent of Insurance will make a recommendation to the State Legislature in September 2007 as to what, if anything, should replace it.