Bill S2776-2009

Provides that certain workers' compensation payments shall be made in one lump sum without commutation to a present value amount.

Details

Memo

 BILL NUMBER:  S2776

TITLE OF BILL : An act to amend the workers' compensation law, in relation to the payment of compensation

PURPOSE OR GENERAL IDEA OF BILL : This bill would change the payment structure to injured workers for permanent partial disability from incremental payments to one lump sum.

Section 1 of the bill amends section 25(1)(b) of the Workers' Compensation Law to require that an award of compensation for permanent partial disability shall be payable in one lump sum.

Section 2 of the bill amends section 15(3)(u) of the Workers' compensation Law to require that a total or partial loss of use of more than one member or parts of members shall be fully payable in one lump sum.

JUSTIFICATION : Injured workers who suffer permanent functional limitations to extremities or certain other body parts are typically compensated for such losses by a schedule loss of use award. Such awards, calculated after deducting the amount of lost time benefits paid to the claimant, provide the injured worker with a cushion against the diminished future earning capacity caused by his or her permanent functional impairment.

The Workers' Compensation Board has recognized that it is entirely consistent with the economic and humanitarian objects of the Workers' compensation Law to pay such schedule loss of use awards to the injured worker in one lump sum, rather than periodically over time. In Lacroix v. Syracuse Executive Air Service 25 A.D. 3d 967 (2006), the Appellate Division, Third Department affirmed the Workers' Compensation Board's approval of the lump sum payment of schedule loss of use awards. That decision, however, was reversed by the New York Court of Appeals in LaCroix v. Syracuse Executive Air Service, 8 N.Y.3d 348(2007). While recognizing that a schedule loss of use award seeks to compensate the injured worker for loss of earning power, the Court of Appeals ruled that the Board's policy contravened the language of the Worker's Compensation Law and that any departure from the periodic method of payment of schedule loss of use awards must come from the Legislature.

Lump sum payments allow injured workers to invest their award if they chose and better prepare for the adverse financial and emotional effects of their resulting diminished earning capacity.

PRIOR LEGISLATIVE HISTORY : 2008: A.10879 Reported to Ways and Means

FISCAL IMPLICATIONS : To be determined.

EFFECTIVE DATE : The act would take effect immediately.

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