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Gridlock creates shameful workers' compensation system

New York State is a decade late on raising the maximum weekly cash benefit for on-the-job injuries and instituting a cap on the number of weeks a permanently partially disabled claimant can collect cash benefits.

Most states establish the maximum weekly cash benefit for workers injured on the job based on a percentage -- usually about 66 percent -- of the average weekly wage for all occupations in their state. New York's maximum compensation rate has been $400 per week since July 1, 1992. The average weekly wage for all occupations in New York State in 2004 was $834. The five states adjacent to New York have a maximum weekly cash benefit from $666 (New Jersey) to $1,005 (Connecticut).

New York is one of only 10 states that has possible unlimited duration of weekly cash benefits for certain permanent partial impairments, such as back and head injuries. The other 40 states limit the number of weeks for all permanent partial impairments, with 26 states having a cap of from 260 to 520 weeks. All five states adjacent to New York have caps.

There are currently about 130,000 open New York State workers' compensation cases. My prior experience as the Rochester Workers' Compensation Board district vocational rehabilitation counselor for 29 years was that the injured workers who were willing and able to pursue a return to the world of work, the vast majority, did so well within a four-year time span. For those small minority of claimants who are markedly (75 percent) permanently partially disabled and who are truly unable to compete in the labor market due to multiple factors, there is a safety net. They can pursue Total Industrial Disability under State Workers' Compensation and/or Social Security disability.

The most prevalent fraud I witnessed was the significant number of permanent partially disabled claimants who voluntarily withdrew from the labor market. They elected to not make a genuine, sustained effort to seek substantial, gainful employment while continuing to collect cash benefits. The advent of the Section 32 Agreement, a negotiated settlement between the claimant and the insurance carrier, cries out for caps on permanent partial disability awards. I found that most claimants negotiating a Section 32 returned to work soon after the award was paid. The average settlement is for five to eight years of weekly cash benefits.

From my perspective, increasing the cash benefit to $600 per week and capping the number of weeks at 416 (eight years) would be prudent. This would provide realistic support while the claimant pursues a return to work while containing the exorbitant cost of workers' compensation to business. It should also help keep jobs from leaving New York State.

It is unfortunate that too many state legislators are unduly influenced by the myopic New York State AFL-CIO union leaders and their high-priced lobbyists. The governor, business and the insurance industry are willing to raise the maximum weekly cash benefit if big labor will be realistic in supporting the capping of awards for permanent partial disability.

William C. Armstrong retired from the State Workers' Compensation Board in 2003.