New York employers will save $1.2 billion as a result of changes to the state workers’ compensation and unemployment insurance systems that were included in the recently adopted 2013-14 state budget, according to Gov. Andrew Cuomo.
The workers’ compensation reforms will save $800 million for businesses while increasing benefits for workers, Cuomo said. An estimated $500 million of those savings are for self-insured businesses, including $14.7 million in the Hudson Valley region. The state will do that by creating one method for collecting annual assessments from employers, eliminating an “overly complicated and bureaucratic system” that has been costly for both the state and employers.
Closing the Fund for Reopened Cases, which allowed payments in certain old and re-opened claims to be taken from this special fund. The new budget calls for closing the fund and eliminating the need for businesses to contribute to it. The changes also involve measures to increase competitiveness in the workers’ compensation marketplace, which the governor said will help drive down costs. Businesses’ annual workers’ compensation assessments will drop by $300 million as a result — $27.5 million in the Hudson Valley, Cuomo said.
The minimum benefit for workers will increase from $100 to $150. This summer, the Workers’ Compensation Board will begin accepting injury reports from insurers electronically, using a national standard. Besides reducing paper-handling costs, it will result in better oversight and guarantee that benefits are paid faster to injured workers.
The unemployment insurance reforms will save employers $400 million. The changes will allow employers to pay off their $3.5 billion debt to the federal government by 2016, instead of 2018. That will reduce interest payments by $200 million.
Other changes include improved anti-fraud measures. As of Oct. 1, anyone who fraudulently collects benefits will be assessed a penalty. Businesses won’t be charged for future claims of employees who have been terminated for misconduct or voluntarily resigned. The Department of Labor will beef up its job-search assistance. Finally, the maximum weekly benefit will jump from $405 to $420 starting in October 2014, and the rate will be indexed to 50 percent of the state’s average weekly wage.
“For too many years, businesses in New York struggled under the burdensome requirements and costs of our state’s unemployment insurance and workers’ compensation systems,” Governor Cuomo said. “Two years ago we pledged to reopen New York’s doors to business and transform our economic climate to make our state friendlier to job creators and reduce the unnecessary bureaucracy and burdens facing businesses. While there is still work to be done, the sweeping reforms to the workers’ comp and unemployment insurance system included in the 2013-14 budget are a major victory for our state’s businesses large and small, and will save our job creators more than one billion dollars.”
These are the regional savings expected from the unemployment reforms: