A bill passed late in the 2022 New York legislative session (S.768/A.1118) proposes a change to the definition of temporary total disability as used in workers’ compensation policies in New York state. This technical change would alter the consideration of temporary total disability from considering the workers’ capabilities to find employment to whether the injured workers can continue working for their current employers. The shift in the criteria for temporary total disability would disrupt the delicate balance between the needs of New York workers and the limited resources of many employers in the state—especially small businesses.
What exactly would change?
This bill would rewrite the definition of “temporary total disability” as used in workers’ compensation policies in New York state. This is one of four classes of wage loss benefits injured workers may file for in the state. Currently, a disability that temporarily prevents an injured employee from working and earning wages is considered temporarily totally disabled for the purposes of workers’ compensation coverage.
The bill would change the definition to an “injured employee’s inability to perform his or her preinjury employment duties or any modified employment offered by the employer that is consistent with the employee’s disability” [emphasis added]. This would change how the insurer and Workers’ Compensation Board would evaluate whether an employee qualifies for temporary total disability benefits. Instead of considering the potential ability of workers to maintain employment consistent with their disabilities, it looks exclusively at what accommodations the employer can provide. If the employer cannot offer a role to the workers consistent with their disabilities, then the employee would be considered temporarily totally disabled for insurance purposes.
What change would this have to benefits?
Total disability benefits, whether permanent or temporary, allow injured workers to collect the maximum rate under state law of two-third their average weekly wage up to state maximum compensation rate of $1,125.46. Under the current definition, an injured worker unable to work and earn wages in any capacity would receive two-thirds of their weekly wage up to the maximum allowed amount until they can return to a workplace.
The proposed change in the legislation would allow the injured workers to receive these benefits even when they could return to work if their employer could not accommodate their remaining disabilities. This could mean an employee with a physically demanding job unable to perform his or her ordinary work due to injury could be considered temporarily totally disabled should the employer lack an alternative position for the worker.
What about partial disability?
In additional to the claims for total disability, New York state allows for claims related to partial disability that account for potential reductions in earning potential while encouraging the injured worker to return to employment. These benefits are calculated based on the extent of the disability and may include compensation for reduced wages due to the disability. Injured employees unable to return to their previous employment and unable to move to a different role with the employer currently would be entitled to benefits under this system that would consider their current employment abilities, potential wage losses, and scheduled payments for the disability.
Why would businesses be harmed?
The difference in the payment for total disability and partial disability can add up fast—especially given that the legislation would not encourage injured workers to find new employment if their employer cannot offer an alternative role. An employee with 25% disability would receive 100% of the disability benefits rather than 25% of the total benefit. An employee eligible for $1,000 a week if totally disabled would receive $10,000 over a 10-week period compared to $2,500 over the same 10-week period if deemed 25% disabled. Over time, that difference would only grow with workers’ compensation premiums increasing to accommodate the additional costs.
The increase in premiums would hurt businesses across the state—especially small businesses. The additional costs this bill would force onto workers’ compensation policyholders would affect all businesses in the state, unnecessarily increasing costs at a time where most businesses already are dealing with inflationary increases in operating expenses.
Want to help stop this legislation? Submit an advocacy letter through PIANY today to urge Gov. Kathy Hochul to veto the bill and prevent unnecessary cost increases for businesses in New York state.
Clare Irvine, Esq.
Clare Irvine, Esq., graduated from Fordham University School of Law and Arizona State University.