February 8, 2023
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Business community criticizes workers’ compensation legislation

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ALBANY — Legislation that supporters say is intended to benefit injured workers is facing stiff opposition from the business community, which is arguing small businesses would be pushed to the brink by the change to a tenet of the once-heralded 2007 workers’ compensation reforms passed under former Gov. Eliot Spitzer.

If Gov. Kathy Hochul signs the bill, which passed the Senate in May and the Assembly on the final day of the legislative session, the new legislation would define “temporary total disability” as an inability to perform the job. The new legislation’s supporters say the previous law was being interpreted too narrowly.

Typically, under existing law, an employee who is found to have a total disability due to a workplace injury would get two-thirds of their weekly pay while a partial disability would lead to less than that. The new law, if signed by Hochul, would mandate that anyone having a partial disability would receive the full amount for as long as they have any workplace injury unless the employer provides feasible light-duty work. They also would not be required to look for another job that they could perform with a partial disability.  

Employment attorneys believe it also would be a workaround for the 10-year cap on disability compensation, which was part of the sweeping 2007 workers’ compensation package to remedy high costs to employers and low pay to injured workers. 

“It’s fundamentally unfair because it undoes one of the cornerstones of the reforms from (2007), which has been relied upon to keep a somewhat level playing field,” Lev Ginsburg, general counsel for the New York State Business Council, said in an interview. 

Peter J. Walsh, an Albany attorney who specializes in workers’ compensation and labor law, railed against the bill, which he said would cause “absolute skyrocketing premiums” that will “crush mid-level and small businesses across the board.”

“In my 33 years, this is the worst bill I’ve ever seen,” Walsh said. 

The Business Council issued a memo of opposition to the bill in May, but direct lobbying efforts from the business community were relatively quiet compared to the efforts by the Workers Compensation Alliance, according to available lobbying records. The alliance’s board is generally made up of attorneys who represent workers. 

“Our real mission is to make sure injured workers are treated in a dignified manner and the laws come true on the promise of workers’ compensation,” said William W. Crossett IV, chair of the alliance and a Syracuse-based workers’ compensation attorney.

The alliance is the lone entity that lobbied lawmakers on the bill throughout the legislative session.

Crossett said the legislation has been a top priority of his since taking over as chair prior to the pandemic. The bill was introduced in 2020.

He rejected the position of critics that the legislation would enrich him and his fellow attorneys representing workers with the higher fees and greater amount of claims they could bring for their clients.

“It’s a misnomer,” Crossett said. “It’s a red herring that we will get bigger fees.”

Critics, though, are steadfast that the bill serves a straightforward purpose, which is for the economic benefit of workers’ compensation attorneys.

“There’s not a community of screaming, sick, troubled workers’ comp claimants that need this,” Ginsburg said. “This is an opportunity for the claimants’ bar to go to former clients and say, ‘Let’s try to get you more.’ I just don’t think it’s as advertised.”

Walsh put it this way: “The Workers Compensation Alliance is being intellectually dishonest in every sense of the word.”

State Sen. Andrew Gounardes, D-Brooklyn, the bill’s sponsor, said he pushed the legislation because of concerns he heard from the workers’ compensation community contending the law on partial disability was being interpreted too narrowly.

“There’s no more ambiguity,” Gounardes said. “Everyone knows up front exactly what’s at stake, which I think helps the overall efficacy of the system.”

For an employer to not be on the hook for the full disability payment even for those with a partial disability, they would have to provide light duty that the worker could do with their injury. Employees who have a partial disability may be eligible to receive a 100 percent disability payment — even if they could work in another job. 

The sponsor in the lower house, Assemblyman Harry B. Brosnon, D-Rochester, said on the floor there is “not a current statutory definition” of partial total disability. The bill adds 31 words to specifically define partial total disability. It was passed on party lines with nearly no debate on the floor. 

Gounardes, during an interview with the Times Union, said it was the first he had heard of any opposition to the bill. He said he always has an open door to hear criticisms of potential legislation, but in this case, only heard support for it. 

“I would expect that the business community, who employs armies of lobbyists, would know enough to track legislation and know things are moving through the legislative process,” Gounardes said. “That’s what they’re paid retainers for. And it seems like in this case, they didn’t do their job.”

The bill passed the state Senate on May 24. The Business Council on May 9 issued a memo of opposition to the legislation, stating it would cause a “dramatic increase in costs to the workers’ compensation system and be especially costly to small employers.”

One of the top concerns opponents are vocalizing, as they seek to stop Hochul from signing the bill as it’s written, is it could lead to substantial insurance rate increases for businesses, municipalities and school districts. 

Gounardes pushed back on what the bill would do and against the idea it would achieve what its critics say it would. 

“It’s not about putting money in a lawyer’s pocket,” Gounardes said. “It’s about helping workers get through their injury.”

The issue, Crossett said, should be centered around ensuring workers are paid a decent wage when they have suffered a workplace injury. In certain cases, workers without a total injury would get 50 percent of the two-thirds of their salary they were entitled under the rules. 

“It’s disingenuous to say, ‘Well, we have to impoverish people to make them go back to work,'” Crossett said. “I’ve been fighting that type of bias for my entire career.”

Walsh argued there’s a “disproportionate amount of malingering” in the field of workers’ compensation and it has increased in recent years.

Crossett contested most people want to return to work because they are embarrassed for being on disability and because their work is a part of how they define themselves.

“This bill says, look, you want to make sure your injured worker gets back, you’re concerned about these things, we’re giving you the tools to help you do it,” Crossett said. “Let’s all get on the same page here. Let’s try to get our injured workers to get back to work as soon as they can. That’s my response.”

Walsh said the stated intent to return workers to employers is “pure malarkey.”

In 2007, when then-Gov. Eliot Spitzer signed the landmark legislation on workers' compensation that the state Legislature has now recommended be amended, he characterized it as a 'remarkable win-win situation for both workers and employers.' The deal was hammered out with both the Business Council and the AFL-CIO.

In 2007, when then-Gov. Eliot Spitzer signed the landmark legislation on workers’ compensation that the state Legislature has now recommended be amended, he characterized it as a ‘remarkable win-win situation for both workers and employers.’ The deal was hammered out with both the Business Council and the AFL-CIO.

Mike Groll/AP

In 2007 when Spitzer signed the landmark legislation on workers’ compensation, he characterized it as a “remarkable win-win situation for both workers and employers.” The deal was hammered out with both the Business Council and the AFL-CIO.

“The whole system has become ossified and unresponsive and despite the dissatisfaction with which it is viewed by all sides, gridlock has prevailed until today,” Spitzer said in 2007. 

The 2022 legislation did not channel major debates in the Legislature, which unlike then, is now controlled completely by Democrats. It passed without much of a hiccup and is championed by the Workers Compensation Alliance as a workers’ rights win. 

Hochul has until the end of the calendar year to decide whether she will sign the legislation.

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