Workers’ comp study: New York’s higher benefits don’t explain high costs

Generally speaking, workers' compensation is a system that is favorable to all the stakeholders involved. Workers receive the medical and wage replacement benefits they need if they are injured on the job regardless of fault - benefits may be awarded even if a worker bears responsibility for causing his or her own injury. In return, workers give up the opportunity to sue their employers for negligence, which protects employers from the uncertain (and often substantial) costs of facing a negligence claim.

To fund the workers' compensation system, employers pay premiums, essentially insuring their workers against on-the-job injury or work-related illness. One might assume that the higher the premiums being paid, the higher the benefits would be for workers. However, a new study seems to indicate that this is not the case in New York.

Benefits for injured New York workers doubled since 2007

The Workers' Compensation Policy Institute is a nonpartisan policy research center that focuses on New York State. The Workers' Compensation Policy Institute recently released an analysis of how New York workers' comp costs compare to the benefits conferred since 2007, when major reforms to the system were enacted.

According to the research, prior to 2007, as a percentage of payrolls, New York employers were paying the 10th highest workers' compensation premiums in the country. Yet, despite paying more into the workers' compensation system than most other states, injured New York workers' were receiving a maximum of only $400 a week, nearly the lowest maximum workers' comp benefits in the nation.

In 2007, New York lawmakers passed a workers' compensation reform bill hoping to raise benefits while simultaneously defraying costs. They were somewhat successful: maximum workers' comp benefits have risen to $803.21 per week. But, workers comp costs in New York have also risen, and New York now has the 5th highest comparative workers' compensation costs in the nation.

"There does not appear to be any direct correlation between high benefit levels and high compensation costs," wrote the authors of the study, entitled New York's worker's comp: high benefits, higher costs. "In enacting the 2007 reforms, policymakers voiced the hope and belief that their approach - increasing benefits while enacting reforms to trim costs - would both raise benefits and lower costs. They were only half right."

While the increase in maximum benefits is a great thing for injured New York workers, even today New York does not have especially high benefits compared to other states, making it difficult to explain why New York is paying the 5th highest workers' comp premiums. For comparison, Iowa currently has the highest maximum workers' comp benefit at $1,543 per week. Most states' maximum weekly benefit falls with the range of $750 to $1000.

Help ensure you get maximum benefits by contacting a workers' comp attorney

If you have been injured on the job in New York, the substantial increase in maximum workers' comp benefits over a relatively short period of time is good news. However, the recent study shows that lawmakers could do more to correct inefficiencies in the system and give injured workers benefits that are more in line with the high premiums being paid by New York employers.

It is important for injured workers to get the full benefits to which they are entitled. If you are facing a work-related injury or illness, talk to a New York workers' compensation attorney to get the most out of your claim.