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The United Restaurants News
July 2007

2007 Workers’ Compensation Reform Act Passed

On March 13, 2007, Governor Elliot Spitzer signed legislation that fundamentally reformed the NYS Workers’ compensation system. The legislation promises to increase benefits to injured workers for the first time in more than a decade while, at the same time, reduce costs by 10-15%.

The legislation increases the weekly benefits to claimants but limits the maximum number of years that permanent partially disabled claimants may receive benefits. There remains a safety net for severely disabled workers who demonstrate extreme hardship.

“This is a remarkable win-win situation for both workers and employers” Governor Spitzer said.

Key Elements include:

Maximum weekly benefits for new claims, as of 7/1/07, increase from $400 to $500, $550 for claims on or after 7/1/08, $600 for claims on or after 7/1/09, and two-thirds of the New York average weekly wage for claims on or after 7/1/10, subject to annual indexing.

Weekly benefits for permanent partial disabilities, as of 3/13/07, are capped based on percentage loss of wage earnings capacity for a minimum of 4.33 years and a maximum of 10.1 years.

A safety net will be created to help these workers return to gainful employment, and to intervene in cases of extreme hardship.

Penalties and sanctions for workers’ compensation fraud by businesses and employees will increase.

The Second Injury Fund and Special Disability Fund will be phased out, and the New York Compensation Insurance Rating Board will sunset on 2/1/08.

Speedier resolution of disputes, and evidence-based treatment guidelines that provide more effective medical care at lower cost.

Work Compensation Rate Cut by record 20.5%

The New York Insurance Department ordered a 20.5% rate cut, effective October 1, 2007. This was prompted by

the 2007 Workers’ Compensation Reform Act enacted this year.

The above mentioned rate cut is estimated to save New York businesses about $1 billion in the 2007-08 fiscal year, according to the NYS Insurance Department.

The 20.5% rate cut exceeds the 10-15% savings projected by Governor Spitzer in March.

President of the New York State AFL-CIO, Denis Hughes said: “The rate cut is further proof that the historic agreement reached earlier this year served the needs of both injured workers and the business community. Raising benefits for the first time in fifteen years, while implementing record-setting premium reductions, has enhanced the lives of injured workers and the well-being of this state’s employers”.

Richard Poppa, CEO of the Independent Insurance Agents and

Brokers of New York said: “It gives us great hope that the Insurance Department Superintendent and his staff are going to be aggressive in working to make sure we get the cost reductions that are contemplated in the bill”. “The flip side of it though is that if some of these things don’t occur, it may just drive insurance carriers out of the market,” he said. “We also realize that if the savings don’t start showing up very quickly, it will make the market worse rather than better,” Poppa said.

W.C. Safety Group Billing Changes

The State Insurance Fund is changing the when they bill the NYS Assessment.

For participating members, effective upon renewal on September 30, 2007, your bill will include the NYS Assessment charge up front, rather than deferred until dividend. There’s no additional cost, it’s simply a timing change.

The State Fund is no longer deferring the assessment charge for any safety groups.

Your dividend checks for your 2007-08 renewal and later will be for the full amount with no deductions for the NYS assessment.

United Restaurants of New York

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