OurView : A mostly good compromise on workers’ compensation

The workers’ compensation agreement worked out last week between Gov. Eliot Spitzer, business and labor leaders marks a welcome reform of a system long plagued by runaway costs to businesses and benefits that didn’t even begin to compensate for injuries.

As announced Feb. 27 by Spitzer and legislative leaders, the package highlights include:

+ Increases in maximum weekly benefits from the current $400 to $500 this year, $550 next year, $600 in 2009 and two-thirds of the average weekly wage by 2010.

+ A jump in minimum weekly benefits from $40 to $100.

+ Abolition of the Second Injury Fund, financed by assessments passed through to employers; and the Compensation Insurance Rating Board, which set workers’ comp costs.

+ Reflection of state cost savings in reduced workers’ comp premiums starting this year.

“As the reforms phase in, reductions in premiums and assessments related to the Second Injury Fund are expected to reach double-digit levels, providing significant relief to New York’s business community, particularly small employers,” according to an announcement of the workers’ comp deal by Spitzer’s office.

Let’s hope so. Last time workers’ comp was reformed in 1996 by Spitzer’s predecessor George E. Pataki and legislative leaders, premiums dipped for a few years before rising again by the time business groups clamored for change eight years later.

The current reform package has won support from business, labor and even a group called BALCONY, short for the Business and Labor Coalition of New York.

“It’s certainly a move in the right direction of containing costs, while at the same time providing fair benefits for injured workers,” said Ross J. Pepe, president of the Construction Industry Council of Westchester and the Hudson Valley, a Tarrytown-based representing 500 heavy-construction contractors and suppliers.

We agree.

As reporter Bryan Yurcan found out (see page one), Pepe and Rachel Volinski of the Builders Association of the Hudson Valley in New Windsor agreed the package didn’t go as far as they wanted.

They had hoped the business-labor dialogue would also yield reforms to the “Scaffold” law, Articles 240 and 241 of state Labor Law. As unbelievable as it sounds, the law holds property owners, contractors and subcontractors totally liable for employee injuries, even if only partially responsible for the injury of a worker.

Because of a fatal flaw in the 1996 reform, cases once handled by the workers’ comp system began to be litigated under 240 and 241, raising business costs.

So yes, there should be Scaffold Law reform. But credit Spitzer, business and labor leaders with not biting off more than they could proverbially chew when it came to this issue. Adding on 240/241 would have guaranteed failure this year.

And hey, the resulting agreement has more good in it than bad.

First, there’s finally a cap on the number of years injured workers can get benefits from four years to 10 years, depending on severity of injury. The indefinite nature of today’s benefits has long been a justifiable cause for complaint among businesses, for many years now.

Albany is also promising to get injured workers quick medical treatment for an equally quick return to work. That addresses lingering fears expressed over the years by business leaders that the current system encourages malingerers.

Perhaps the best news about the workers’ comp reform plan is the budding relationship forged between the state’s business and labor leaders -- no small thanks to Spitzer.

Spitzer engaged both Kenneth Adams, president of the Business Council of New York State, and Denis M. Hughes, president of the New York State AFL-CIO, in talks that began in November, and carried on quietly through intermediaries until the agreement was hammered out, then announced Feb. 27.

What a difference this was -- and what better results transpired -- than when Spitzer, Assembly Speaker Sheldon Silver, D-Manhattan, and state Senate Majority Leader Joseph Bruno, R-Brunswick, carried on all that smackdown-style posturing during and after the selection of the new comptroller, Thomas P. DiNapoli.

Can you imagine if these guys tried reforming workers’ comp what would happen? The Adams-Hughes talks on workers’ comp offered even more proof that state government cannot on its own solve problems.

Now here’s the hard part: Parlaying the relationships built between Adams and Hughes to tackle some other thorny business-labor issues in this state. How about the two tackling reform of Sections 240-241?

We’ll admit that’s unlikely to happen this year, since Spitzer already asked labor to compromise on workers’ comp and has jawboned about reforming the Wicks Law forcing multiple contractors on municipal and school district construction projects long a sore spot with labor. On Feb. 13, labor reps flooded the state capitol lobbying to uphold the Wicks Law status quo with buttons proclaiming: “Wicks Works.”

But there’s always next year. And if election-year politics preclude that, there’s the year after that. Businesses in the Hudson Valley shouldn’t have to wait too much longer to see more reforms that can help keep them in the Empire State.

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