Legal Developments

New Report Documents Erosion in New York State Compensation for Injured Workers

Worker benefits lag all neighboring states
2007 and 2017 “reforms” did little to help workers
While worker benefits fall, profits for workers’ comp insurance companies top $1 billion

New York—Despite its early history as a national leader in safeguarding the interests of workers injured on the job, the focus of workers’ compensation in New York has shifted from fairly compensating injured workers to minimizing employer costs, according to a new report from the Center for New York City Affairs at The New School.

The report, Time for a Real Look at How the New York State Workers’ Compensation System Treats Workers highlights the need for enhancing worker benefits, improving access for low-wage and non-English speakers and for investments to reduce workplace injuries and illnesses.

The report found that over 200,000 workers are injured annually in New York State. About 115,000 injuries resulted in time lost from work, and three-fourths occurred in low-wage industries. Fatal workplace injuries in New York, particularly in construction, have soared to their highest level in 20 years. The incidence of workplace fatalities has risen sharply in New York over the past decade while it has been flat nationally.

“This report sounds the alarm that there is a need for a real look at workers’ compensation in New York following years of eroding benefits, high rates of workplace injuries and fatalities and skyrocketing workers’ comp insurance profits,” said James A. Parrott, co-author of the report and Fiscal and Economic Policy Director at the Center for New York City Affairs at The New School.

Key findings

  • New York’s $150 minimum weekly benefit is less than half the $339 average for five neighboring states. Despite the fact that New York has the highest statewide average weekly wage, its maximum benefit of $871 in 2018 ranked 29th among all states.
  • The actual dollar amount of worker benefits fell 15 percent from 2014-17 while insurance profits rose 92 percent. Benefits paid to (indemnity benefits) or on behalf of workers (medical costs) were only 55 percent of workers’ comp premiums in 2017. In that year, insurance profits exceeded $1 billion.
  • While changes in 2007 increased the maximum indemnity benefit (to compensate injured workers for lost worktime), a cap on permanent partial disability payments wiped out that increase for most long-term partially disabled workers.
  • The 2017 two-and-a-half year cap on temporary disability payments reduced benefits for all workers not fully recovered within a few years.
  • At best, New York provides an indemnity benefit to injured workers that is a maximum of two-thirds of the worker’s average wage in the year before injury (capped at a maximum of two-thirds of the state’s average weekly wage) with no adjustment for inflation. National experts recommend that the wage base be adjusted annually to reflect a worker’s earnings potential rather than the pre-injury wage. This would include periodic wage increases, and promotions workers usually receive over the course of their careers.
  • Warehousing, nursing homes, food manufacturing, hotels, and hospitals have the highest incidence rates of lost workday injuries in the private sector. State and local government workers, particularly those in law enforcement, nursing homes, hospitals, and public schools have injury rates higher than the state’s overall rate. Retail trade accounts for the highest number of injuries with lost worktime.
  • Employer costs for workers’ compensation are a very small 0.7 percent share of total employee compensation. Eighteen states have higher employer costs than New York.

The report recommends that New York update income replacement benefit payments, improve access to benefits, particularly for low-wage workers, and ensure that businesses responsibly invest in enhancing workplace safety and assisting workers in safely return to work.

The complete report can be accessed here.

“Getting injured on the job should not push a worker into poverty. This report shows that the worker’s compensation benefit structure is broken and needs to be overhauled for all of New York’s workers,” said Charlene Obernauer, Exec. Director of the New York Committee on Safety and Health (NYCOSH).

"Frances Perkins, who played such a pivotal role in establishing New York's leadership role in workers' compensation benefits a century ago, would be aghast at the situation this report describes,” said Patricia Smith, Senior Counsel, National Employment Law Project and former Commissioner, NYS Department of Labor. “We need to ensure that all workers with work-related injuries and illnesses are provided the medical and wage replacement benefits they need. New York must do better in taking care of injured workers and their families."

“The findings in this study are disheartening, but certainly not surprising,” said William Turley, President of the Injured Workers’ Bar Association. “Why do we see record profits for insurance companies and, at the same time, a steady decline in benefits for injured workers? I hope that this will inspire our lawmakers to do more to protect the rights of the most vulnerable segment of our labor force.”

"The numbers in this report are one measure of the human cost of what happens when a worker is injured on the job,” said Deborah Williams, Director for Quality of Work Life and Organizing Director for District Council 37. “We see that every day in workers who can't meet the basic needs of their family on workers' compensation, or who come back to work while they're still injured. These are important problems that need to be addressed."

“32BJ applauds the Center for New York City Affairs for its groundbreaking work on the shortcomings of the workers’ compensation insurance system,” said Hector Figueroa, President of 32BJ SEIU, the largest property service union in the country with 80,000 members in New York. “When workers are safe on the job and adequately compensated if an accident does happen, those worker’s families and their entire communities are more stable. That should be the goal for New York.”

The report is available online at https://www.centernyc.org/real-look-nys-workers-comp.

The Center for New York City Affairs at The New School is an applied policy research institute, providing analysis and solutions that drive innovation in social policy. See: www.centernyc.org

For immediate release: Thursday May 30, 2019
Contact: James Parrott, parrottj@newschool.edu, 917-880-9931

WCB Announces Changes to the Section 32 Waiver Agreement Resolution Process

As of March 1, 2016, the Workers’ Compensation Board will use a desk review process to review and approve or disapprove Section 32 settlement agreements in certain circumstances. A Section 32 agreement is a negotiated agreement between the injured worker and the carrier to settle indemnity (money) and/or medical benefits on a claim. The Section 32 settlement is not binding unless it is approved by the Workers' 50Compensation Board. Prior to March 1, 2016, all Section 32 settlements required review and approval by a Law Judge at a hearing.

The change in the Section 32 settlement process allows for a desk review in cases where the claimant (other than a minor dependent) is waiving only their right to indemnity benefits, or when all parties to the agreement request desk review. The Board believes the use of the desk review process will reduce the time it takes to approve a Section 32 agreement and allow calendar time to be prioritized for cases with pressing issues. The Board will continue to review other Section 32 settlement agreements through the hearing process.

The Board created new and revised forms that must be used for all Section 32 settlement agreements as of March 1, 2016. In addition, the Board developed a video, entitled Settling Your Claim, to help educate injured workers about the nature of a Section 32 settlement agreement and the implications of settling their claim. The Board now requires that injured workers watch this video before they enter into a Section 32 settlement. Attorneys must inform their clients about the video as part of their review of the Section 32 settlement agreement.

The Board believes that the updated desk review process will benefit all parties and expedite the timeframe for approval. However, we believe there are several concerns with the new process. We meet with every client and go line by line through a Section 32 settlement agreement and answer all questions before signing and submitting the agreement to the Board. Not all attorneys follow this practice. A hearing in front of a Law Judge provides an injured worker with an opportunity to ask either their attorney or the Law Judge any final questions. The new desk review process denies an injured worker of this opportunity.

The desk review process also eliminates the opportunity for the parties to make any minor changes to the agreement requested by either party or the Board at the table. For example, a child support order may need to be corrected or updated to reflect the accurate amounts to be paid. In the desk review process, the written agreement will be rejected by the Board with a request that the agreement be revised and resubmitted for consideration, which will take more time. It remains to be seen whether the desk review process will actually result in faster time frames for decisions or simply delay the approval and payment of settlements.

WCB announces elimination of Walk in Stipulation Calendars

Unfortunately, the New York State Workers’ Compensation Board has announced that they are abandoning one of the most successful procedural devices adopted by the Board: Walk in Stipulation Calendars or W.I.S.K. Hearings.

A W.I.S.K. hearing was a walk in stipulation calendar (or kalendar) where the parties could prepare a written stipulation on specific issues and schedule a hearing almost immediately for approval of the stipulation by a law Judge on behalf of the Board. The Board would then issue a written Notice of Decision within three to five days and stipulations could not be appealed lending certainty and finality to the process.

The program was favored by litigants because issues could be resolved with almost immediate results instead of waiting for a month or more for the Board to schedule a hearing.

The program became so popular that the W.I.S.K. calendars were sometimes full and the parties had to wait an additional week to schedule a hearing, but still faster than waiting for the Board to schedule a hearing and take action. This was especially helpful when an injured worker was not getting paid or was being paid at a low rate and the parties agreed to an increased rate. It was also helpful when the parties were able to agree on issues such as permanency. The benefit was that the awards agreed to in the stipulation were payable as early as three weeks.

Now, the Board has advised that there will be no more W.I.S.K. hearings. In place of the W.I.S.K. hearings, the Board is offering to have the parties prepare a written stipulation and mail it to the Board for a desk review and approval. The Board has not revealed who will be reviewing the proposed stipulations (Judges or examiners), nor have they outlined a time line for approval other than a local official commenting that they expected (hope) to issue Notices of Decision within three weeks. The Board says this will save time and reduce hearings.

Our position is that the W.I.S.K. system was expeditious and effective with results within a week to two weeks. The Board’s change does not inspire confidence that results will be as quick. Past performance would suggest further delays. For example, the Board’s new phone service center no longer gets you to an examiner on your case instead you are told that someone will call or write you within the next ten business days.

In our opinion, the Board has eliminated one of the few things that attorneys on both sides of the table would agree was working well.