Governor Spitzer’s Workers’ Comp Reform Passes

Jul 26, 2007

Governor Eliot Spitzer’s workers’ compensation reform bill recently passed the state Legislature, following years of advocacy by The Business Council and 12 weeks of intensive negotiations involving the Spitzer administration, legislative leaders, Business Council President Kenneth Adams, and the state AFL-CIO.

“This is an historic step forward toward improving New York’s business climate,” Adams said.  “The reform package provides support to New York State’s business owners and workers alike. It is also a significant achievement for The Business Council - one that we have been seeking for years.”

“Over the years, the Chamber and its Legislative Committee have discussed and advocated for reforms to workers’ comp,” stated Rick Henry, Chair of the Chamber’s Legislative Committee. It is encouraging to see such efforts being moved forward at the state level.”

The reform package includes new limits on the duration of benefits in “permanent partial disability” cases, which have driven New York’s workers’ comp costs to a level that has been some 80 percent above the national average. It also increases the maximum weekly benefits available to injured workers. The new law:

Limits the number of years during which benefits would be available in permanent partial disability cases, which now account for a high percentage of costs in New York’s comp system. The previous law allowed lifetime payment of cash benefits in all such cases. Now, based on current caseloads, it is estimated that benefits will be capped at eight years or less for more than 90 percent of cases. And that the average PPD claimant will get 344 weeks of benefits upon classification.

Increase the maximum weekly benefit for injured workers from $400 to $600 over three years. In the fourth year, the maximum weekly benefit will become two-thirds of the average weekly wage in New York, with the maximum thereafter adjusted annually beginning in the fifth year.

Creates new program designed to help injured workers get workers prompt medical treatment and return to gainful employment.

Creates strong new anti-fraud measures.

Eliminates the Second Injury Fund, which has forces significant recent increases in surcharges that are added to all employers’ workers’ compensation bills.

Continues medical services for workers whose benefits in PPD cases expire would continue.

Provides a “safety net” would be established for cases determined to involve extreme hardship.

In addition, Governor Spitzer has directed the state superintendent of insurance to pursue other key reforms administratively, including the design of an expedited hearing process, implementation of factual medical guidelines to determine accurately the degree of disability in comp cases, the design of new treatment guidelines, the design of new return-to-work initiatives to help injured workers, and new training for administrative law judges who hear workers’ comp cases.

A summary of the law’s key provisions is available at