Governor Signs Bill Overhauling Workers' Comp

By GINGER ADAMS OTIS

The state Workers' Compensation system is poised for a radical overhaul now that Governor Spitzer has enacted legislation that will, among other things, raise the maximum weekly benefit from $400 to $500 later this year, progressing to $650 by 2009.

GOVERNOR SPITZER: 'Better protects workers.'

The Governor signed the landmark bill into law March 13, less than three weeks after the State Legislature hammered out a final version, putting an end to eight years of negotiating among elected officials, union leaders and business groups.

Good for Both Sides

For the first time in more than a decade, the benefits for injured workers will increase, and employer costs will decrease by 10 to 15 percent. The state's Workers' Compensation premiums have been among the highest in the nation, despite relatively low weekly benefits for injured workers.

"Workers' Compensation reform is a critical component of restoring the state's competitiveness," Governor Spitzer said in a written statement. "[We] are reversing a trend that hampered business growth for years and we are better protecting workers in the event of job-related injury."

DENIS HUGHES: 'An historic day.'

He also announced that he's asked the state's Acting Superintendent of Insurance, Eric Dinallo, to ensure that savings in the Workers' Compensation system are translated into reductions in insurance premiums.

This would require the Superintendent, with assistance from Commissioner of Labor Patricia Smith and Workers' Compensation Board Chair Donna Ferrara, 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, and develop training materials that will assist Administrative Law Judges in making consistent case determinations.

Law's Drawbacks

Some critics of the reform package have blasted lawmakers and union officials for settling for a deal that won't do anything to help those already receiving Workers' Compensation, whose maximum weekly benefit will remain $400. Also, the reforms have drawn the ire of some workers who are currently collecting permanent partial disability benefits, because the law sharply curtails the length of time that such employees can claim their "reduced earnings" benefits.

Denis Hughes, president of the State AFL-CIO, issued a written statement after Governor Spitzer signed the bill calling it an "historic day."

It makes "injured workers, the business community and all New Yorkers winners," he added.

A State AFL-CIO spokesman confirmed that "the legislation applies only to newly injured workers: those injured from the day of the billsigning and moving forward. Those already on Workers' Compensation will not reap the benefit increase; however, they will also not have their benefits capped. They will continue to receive their current benefits forever."

According to the new legislation, savings worth hundreds of millions of dollars will be achieved by capping the number of years that a "small population of claimants" classified as permanently partially disabled can receive cash benefits. The maximum time benefits can be collected will be based on the degree of disability.

Medical services will continue, the legislation says, and a safety net will be established to help these workers return to gainful employment and to "intervene in cases of extreme hardship."

Other key elements of the reform package include an increase of the minimum weekly benefit from $40 to $100; the creation of new programs to get workers prompt medical treatment and to help them return to work; and stronger anti-fraud measures, 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.

The legislation also closed the Special Disability Fund that was set up to help injured workers but was used by some insurance carriers to transfer claim costs to the entire industry.