STA OPPOSES WORKERS COMP LEGISLATION MAKING INSURANCE MORE EXPENSIVE
Among the hundreds if not thousands of pieces of legislation passed by the Assembly and Senate in Albany this year, the STA and other industry associations are standing together in opposition to S.768/A.1118. This bill, which is making its way to the desk of Governor Kathy Hochul, would change the way that temporary partial disability is structured by allowing for benefits at the temporary total disability rate for employees with mild or moderate partial disabilities unless the employer can provide light duty work.
In its letter of opposition to Governor Hochul regarding this legislation, the STA pointed to three undesirable consequences from the bill:
- The bill would significantly drive up the costs of Workers’ Compensation insurance in the State of New York;
- It will lead to an explosion in related litigation; and
- The bill upends a reasonable compromise from 2007 that was endorsed by both employer groups and organized labor.
In our letter of opposition, the STA makes the point that this bill will result in a dramatic increase in costs to the Workers’ Compensation system and will be greatly injurious to small employers, especially at a time where many of these businesses are suffering the effects of state mandated costs related to the COVID 19 pandemic, such as mandated COVID leave. With the current downturn in construction activity in New York, there will likely be an increase in new disability claims and this bill will make those costs untenable for construction contractors.
Recognizing the unfriendly legal climate in New York for small businesses such as our member subcontractors, with the influx of claims likely to occur as a result of this legislation, lawyers will have a “field day” in new opportunities of costly system litigation. Lawyers will exploit the provisions under this legislation, attempting to prove that their clients qualify for the new “temporary total disability” standard under the bill, that an injured worker was not able to do exactly what they had been doing previously on the job.
Finally, in 2007, then Governor Elliot Spitzer enacted significant Workers’ Compensation reforms that had the backing of both management and labor. These reforms allowed for significant increases in disability in exchange for capping some of the most expensive aspects of the payout system. These reforms seemed to work well. However, if as proposed under this legislation, workers no longer have an incentive to accept alternative work and can collect more money in so doing, the entire guardrails and cost structure of the Workers’ Compensation system will be upended.
The STA will continue to work with our sister associations both in construction and general business, in opposition to this legislation. We will keep you informed on this matter as future events warrant.