Dr. James Parrott, director of economic and fiscal policies at the Center for New York City Affairs (CNYCA), prepared this testimony for a hearing before the New York State Senate Labor Committee scheduled for February 5, 2024. The hearing was postponed at the last minute (for a second time) when the Workers' Compensation Board Commissioner (and the CEO of the New York State Insurance Fund) pulled out of the hearing. As Parrott's prepared testimony documents, New York's Workers' Compensation system is urgently in need of fundamental reforms.

New York was the first state to adopt workers’ compensation and was once a national leader in safeguarding the interests of workers injured on the job. However, worker protections under New York’s workers’ comp system have eroded over the years. Legislative and administrative changes have focused on curtailing benefits rather than minimizing injuries, adequately compensating injured workers, or fostering return to work. Fairly compensating injured workers used to be the guiding principle for workers’ compensation; for the last several years, changes have reduced employer costs and boosted insurance company profits.

New York needs to update income replacement payments to injured workers, improve access to benefits (particularly for low-wage workers), and ensure that businesses responsibly invest in enhancing worker safety. This is particularly urgent, because New York’s private sector workplaces are not becoming safer. Nearly 200,000 workers are injured annually in New York State. Workplace fatalities have averaged 250 annually over the past decade, more than 10 percent greater than in the first decade of this century. The incidence of workplace injuries and illnesses has increased in New York State over the past three years and was a quarter higher than the national rate in 2022.