In comparison to other forms of liability, the notion that an employer is responsible for compensating an employee for an injury occurring in the course and scope of his or her employment is a relatively recent development. (1) Germany has long been credited with enacting the world's first workers' compensation statute, when the country enacted the Bismarck Accident Insurance Law of 1884. (2) Several years later, in 1910, New York State became one of the first states to enact a compulsory workers' compensation scheme. (3) Although the New York State Court of Appeals ultimately declared the statute unconstitutional, (4) a series of events had been set in motion that lead to the passage of a predecessor form of New York's current workers' compensation system in 1914. (5)
Despite New York's progressiveness, in the years after the workers' compensation statute was enacted, it was much maligned and condemned by parties on both sides of an extraordinarily adversarial system. (6) While some of the criticism focused on how expensive the system is for New York's employers, (7) other criticism focused on perceived benefit inequities faced by injured workers. (8) These well-founded criticisms were primary driving factors behind the New York State Workers' Compensation Reform Bill, a piece of legislation passed in 2007, which was aimed at remedying both of these system denunciations. (9)
In commenting on the passage of the bill, Senator Joseph Bruno, then the Majority Leader, noted that "[t]he workers' compensation reform law is a tremendous victory for workers who will receive increased benefits, and for businesses that will see a significant reduction in premiums." (10) Then-Governor Eliot Spitzer expressed a similar sentiment and hailed the reform legislation as a win for New York's employers as well as a win for New York's injured workers. (11) Despite what seemed to have been nearly universal praise of the bill, (12) since 2007, both employers and injured workers have expressed their unhappiness with the legislation; however, it seems that it has at least minimally accomplished what it set out to do: reduce employer premiums and increase injured worker benefit levels.
This note begins by tracing the history of the workers' compensation system in New York and providing a broad overview of how the system has generally operated since the system was enacted. (13) Part III examines the events, circumstances, and concerns that lead to the passage of the 2007 reform legislation. (14) Part IV examines the changes that were implemented to the system by the legislation, with a focus on premiums paid by employers and benefits paid to injured workers. (15) Finally, Part V analyzes and considers whether employers have seen a reduction in workers' compensation premiums concomitantly with injured workers seeing a weekly benefit increase since the 2007 reform legislation was passed and suggests that New York should consider additional legislative action to ensure the long-term success of the reforms. (16)
II. Brief History of the Workers' Compensation System In New York State
A. Initial Unsuccessful Attempts
Originally, the common law in New York State provided no remedy for on-the-job accidents, absent negligence on the part of the employer. (17) In 1909, the New York State Legislature established a committee, known as the Wainwright Commission, to study industrial accidents in the state and ultimately make legislative recommendations. (18) More specifically, this committee was charged with investigating "the liability of employers to employees for industrial accidents," the "efficiency, cost, justice, merits and defects of [other states' and countries' workers' compensation] laws," as well as "the causes of accidents to employees." (19) Thereafter, those appointed to the committee were required to report their findings to the legislature along with their recommendations for "legislation by bill or otherwise" to the 1910 New York legislature. (20)
The Wainwright Commission's investigation was extensive; it conducted fourteen executive sessions, eleven public hearings across the state, examined 121 witnesses, and sent questionnaires to members of the judiciary, labor organizations, and employers located in New York. (21) When it reported to the legislature, the Commission advised that it was "strongly of [the] opinion that the present legal system of employers' liability in force in this State ... is fundamentally wrong and unwise and needs radical change." (22) The Wainwright Commission noted that almost every country in Europe had moved away from the fault-based system--then in place in New York--to a workers' compensation system which provided benefits to injured workers without regard to fault. (23)
The Wainwright Commission recommended that the legislature make changes to existing laws, adopt an elective compensation plan for some categories of employments, and adopt a compulsory compensation plan for other categories of employments. (24) The Compulsory Compensation Act, as it was envisioned by the Wainwright Commission, would have provided employees of "certain very dangerous employments" with compensation for their injuries that would have kept the worker out of "absolute destitution." (25) The legislature heeded the Wainwright Commission's recommendations and passed New York's first workers' compensation statute on May 24, 1910. (26) Taking effect on September 1, 1910, (27) the Act provided that when an accident arose "out of and in the course of the employment," the employer was "liable to pay compensation under ... the rates set out in" the Act. (28)
On September 2, 2010--the day after the Act became effective in New York--Earl Ives, an employee of the South Buffalo Railway Company, injured himself while working as a switchman with the railroad. (29) As a result of his injury, Mr. Ives was incapacitated from his position with the railroad for seven weeks. (30) Since the statute provided that benefits did not start until an injured worker had been either totally or partially incapacitated from gainful employment for at least two weeks, (31) Mr. Ives was due five weeks of compensation. (32)
Following his on-the-job injury, Mr. Ives brought suit under New York's newly enacted workers' compensation statute. (33) In his action, Mr. Ives alleged that he was injured by virtue of the "risk or danger of his employment" with South Buffalo Railway Company, (34) and was entitled to five weeks of compensation. (35) South Buffalo Railway Company admitted every allegation contained within Mr. Ives' complaint and unsuccessfully advanced three arguments before the trial court as to why New York's statute was an infringement of both federal and state constitutions. (36) First, the employer argued that the enacted statute was barred by the U.S. Constitution as it deprived the employer of equal protection and of due process rights to liberty and property. (37) Second, the employer argued that the statute violated New York State's constitutional protection of the right to trial by jury. (38) Third, the employer argued that the statute violated the New York State Constitution by "limit[ing] the amount recoverable in actions to recover damages for injuries resulting in death." (39) In rejecting the employer's assertions, and directing a judgment for the plaintiff on the pleadings, the trial court noted that "every presumption is in favor of the constitutionality of the act." (40)
After the Appellate Division, Fourth Department affirmed the judgment without opinion and Justice Williams dissenting, (41) the defendant appealed to the Court of Appeals of the State of New York. (42) After oral arguments were held on January 16, 1911, (43) the Court of Appeals issued an opinion, authored by Justice Werner, which lauded the thoroughness and excellence of the Wainwright Commission's report, (44) but found that the compulsory compensation statute was void as it unconstitutionally took property from employers without the benefit of due process by virtue of the liability imposed by the statute. (45) The court took pains to note that although the system dealing with workplace accidents in New York State was unlike the systems that existed in other countries; other countries were constitutional monarchies, unprotected by the "rigidity of a written Constitution." (46)
B. From the Triangle Shirtwaist Factory Fire to a Constitutional Amendment
The implications of the Court of Appeals' March 24, 1911 decision in Ives v. South Buffalo Railway Co. were soon realized. On Saturday, March 25, 1911, the day following the Ives decision, a rapidly-spreading fire broke out on the eighth floor of the ten-story Asch Building, located in Greenwich Village at the corner of Greene Street and Washington Place, (47) killing nearly 150 employees of the Triangle Shirtwaist Company. (48) For ninety years--until the September 11th tragedies occurred at the World Trade Center--the Triangle Shirtwaist fire notoriously remained New York's deadliest workplace disaster. (49)
The Triangle Shirtwaist Company was responsible for the manufacture of "shirtwaists--inexpensive lightweight bodices made of cotton or linen that were popular with women at the time." (50) The 600 employees of the company (51) occupied the eighth, ninth, and tenth floors of the Asch Building. (52) The majority of Triangle Shirtwaist employees were young, female immigrants. (53)
The building, named after owner Joseph J. Asch, was ten thousand square feet. (54) Based on this size, the building should have had three staircases, but instead had only two. (55) At that time, no law existed which would have required fire sprinklers to be installed or fire drills to be held in a factory building such as the Asch Building. (56) Further, the working conditions on the three floors occupied by the factory were so overcrowded that many workers were "performing their jobs literally on top of one another." (57) A large pile of scrap fabric that had been accumulating on the eighth floor for nearly three months further compounded the factory's problems, (58) While the exact cause of the fire is not precisely known, (59) it has been suggested that the fire was the result of a carelessly discarded cigarette. (60) The conditions in the factory, in short, were an accident waiting to happen.
Shortly after four o'clock that afternoon, on March 25, 1911, (61) Joseph Wexler, a company watchman, signaled to employees on the eighth floor that it was the end of their shift by ringing a bell. (62) Mere minutes after the workers began to file out, employee Eva Harris noticed that something was burning and notified the factory's production manager, Samuel Bernstein. (63) Initial attempts to put out the fire were unsuccessful (64) and the fire spread across the eighth floor rapidly. (65) As the fire spread, so did the employees' panic as those attempting to escape the blaze soon discovered the door to the stairwell had been chained shut. (66) Executive employees of Triangle Shirtwaist, housed on the tenth floor, were able to escape (67) after receiving notice of the fire from the eighth floor, but failed to notify the 260 employees still working on the ninth floor of the factory or remove any of the chains from the doors which blocked the employees' exit to safety. (68) When the blaze began to encompass those ninth floor workers, many elected to jump to their deaths, (69) in spite of efforts by New York City's firemen to catch the falling workers. (70) Reports have said that it took eighteen minutes to get the blaze under control, (71) but in that short period of time, it had claimed the lives of nearly 150 Triangle Shirtwaist employees. (72)
The district attorney swiftly indicted the two owners of the Triangle Shirtwaist factory, Isaac Harris and Max Blanck, for first and second-degree manslaughter. (73) Max D. Steuer, attorney for Harris and Blanck, immediately challenged all seven indictments in the Court of General Sessions. (74) In his November 1911 opinion, Judge O'Sullivan disallowed all but one of the defendants' challenges to the indictment. (75) When the defendants proceeded to trial, Max D. Steuer represented them again. (76) After a lengthy trial in December of 1911 and less than two hours of deliberations, the jury found the factory owners not guilty on all charges. (77)
Because the Court of Appeals' decision in Ives v. South Buffalo Railway Co. had struck down New York's workers' compensation scheme, the victims of the fire and the victims' families were left with little recourse for the suffered losses. (78) Several families of the victims brought suit against Harris and Blanck and three years following the duo's criminal acquittal, the co-owners settled each of the twenty-three civil suits for seventy-five dollars per life lost in the blaze. (79)
Although New York State had passed a workers' compensation scheme at the Wainwright Commission's recommendation, prior to the Triangle tragedy, the general public simply did not see industrial accidents as a pervasive problem in need of correction in New York. (80) The fire, coupled with a stream of media coverage emphasizing the grisliness of the tragedy, (81) overwhelmed the general public's collective conscience and brought the issue to a head. (82) In the days following the fire, many local and state agencies launched investigations into the circumstances and cause of the fire. (83) Specifically, on June 30, 1911, the New York State Legislature authorized the creation of the nine-member Factory Investigation Commission ("FIC"), (84) which was charged with investigating the working conditions for manufacturing operations across the state, (85) With the FIC's investigation findings, the legislature hoped to enact "remedial legislation.., to promote the best interests of the community." (86) The FIC conducted twenty-two public hearings, fifteen executive sessions, and visited 1,836 companies in twenty different industries across the State of New York. (87) The scope of the FIC's investigation was due in no small part to the breadth of authority granted to them. (88) Ultimately, in the years the FIC was in existence, it orchestrated the passage of thirty-six statutes that protected New York's employees, (89) ranging from fire safety regulations to sanitation regulations. (90)
Despite the harsh result to the victims of the fire and the victims' families, New York's legislature would be unable to enact a workers' compensation statute without first amending New York's constitution due to the Court of Appeals' prior decision in Ives v. South Buffalo Railway Co. (91) In 1913, New York's electorate was asked to vote on "Amendment No. 2," one of four constitutional amendments before New York's voters that year. (92) After the majority of the voting public approved "Amendment No. 2," New York's legislature was permitted to "enact laws to protect the lives, safety, or health of employees." (93) Following the amendment's approval, Governor Glynn signed into law a compulsory workers' compensation statute for New York's employees and employers, (94) allowing those affected by workplace accidents to apply for compensation beginning July 1, 1914, (95) a mere three years following the Court of Appeals' decision in Ives v. South Buffalo Railway Co. (96)
C. New York's Workers' Compensation System
When it was originally enacted in 1914, New York's Workers' Compensation Act was fairly limited in scope, applying only to those industrial injuries and deaths occurring in one of the forty-two statutorily enumerated hazardous occupations. (97) Since the original enactment, however, the breadth of the law has expanded significantly. (98) Presently, employees engaged in most types of employment are covered. (99)
The statute is often referred to as a "no-fault" statute because eligible injured workers are entitled apply for and receive benefits without regard to whose negligence resulted in the accident. (100) Under most circumstances, the Act is an employee's exclusive remedy, meaning that an injured worker or deceased worker's family cannot sue an employer for remuneration via civil process in state or federal court. (101)
Under the statute, an injured employee is generally entitled to two types of benefits: medical and indemnity benefits. (102) Medically, employers must furnish injured employees with causally related medical care for as long as it is medically necessary to treat the injury. (103) Injured workers are generally permitted to select their own medical provider to treat them for their work-related injuries, (104) as long as whomever they select has been authorized to treat by the Workers' Compensation Board. (105) In addition to medical treatment, employers are required to provide indemnity benefits to injured workers, the amount of which will vary depending on whether the injury results in the worker's total or partial disability and whether that disability is temporary or permanent. (106)
Administratively, the Workers' Compensation Board is comprised of thirteen members, appointed by the governor, with at least four members of the Board being admitted to practice law in the State of New York. (107) The Chair is the administrative head of the Board and is vested with a wide array of powers to assist in the function of the Board, ranging from designating the place and time for claim hearings to issuing and revoking certificates of authorizations for doctors. (108)
An administrative law judge, who has been appointed by the Chair to hear claims, makes decisions on all claims for compensation. (109) Determinations made by a law judge may be appealed to a three-member Board Panel. (110) The Board Panel's decision is final unless one of the parties to the action elects to file an appeal to the Third Department, Appellate Division. (111) The Third Department's determinations are reviewable only by New York's highest court, the Court of Appeals. (112)
III. PROBLEMS LEADING TO THE PASSAGE OF THE 2007 REFORM BILL
When Governor Spitzer delivered his annual message in early 2007, he explained that the workers' compensation system in New York had failed parties on both sides. (113) As it stood, employers in New York paid "some of the highest premiums in the country" while injured workers received "some of the lowest benefits." (114) Spitzer's sentiments were echoed by others, saying that workers' compensation "embod[ies] the worst of all possible worlds in New York state: the benefits are way too low; the premiums are way too high." (115)
A. Low Benefits
New York's workers' compensation system is premised on the idea that those workers who are injured on the job should be compensated for lost wages at an amount that is equal to two-thirds of their earnings. (116) In spite of this legislative intent, maximum benefit levels in New York have been historically slow to change, frequently failing to keep pace with New York's average weekly wage. (117) Due to the cap on maximum weekly benefits, many injured workers did not receive two-thirds of their earnings. (118)
Quite simply, New York's benefit levels have only increased when the legislature undertook active measures to increase it. (119) Prior to the 2007 reform legislation, the last time the benefit rate had been increased in New York was nearly fifteen years prior, in 1992, when maximum benefit levels were increased to $400 per week. (120) Upon the passage of the 1992 benefit increase, the governor noted that the prior "compensation structure [was] inadequate." (120) The governor further noted that the benefit level increase was "long awaited and much overdue." (122)
As noted, New York's maximum benefit level remained at $400 for more than a decade, as the legislature failed to take action to increase it since the previous change in 1992. (123) In 2006, just prior to the 2007 reforms, the $400 maximum benefit level was a mere 36.52% of the state's average weekly wage of $1,095. (124) Although only the District of Columbia had an average weekly wage that was higher than New York's, (125) forty-eight states had higher maximum benefit levels than New York in 2006. (126)
B. High Premiums
The significant cost of employer workers' compensation premiums were said to have been a large "impetus for [employers] leaving the state." (127) The premium amount paid by an employer is a complex actuarial calculation that involves multiple components, including the nature of the employer's business, compliance with the law, the existence of safe work practices, New York-mandated premium assessments, payroll amounts, and the history and amount of losses. (128)
In a comparison study conducted by the State of Oregon Department of Consumer and Business Services for calendar year 2006, (129) it was found that New York employers paid some of the highest premium rates in the country. (130) The study ranked the amount of employer premiums paid by the states and the District of Columbia as follows, from most expensive to least expensive: (131)
Table 1: 2006 Employer Premium Levels By State 2006 Premium for every Ranking State $100 in payroll (132) 1 Alaska $5.00 2 California $4.13 3 Delaware $3.91 4 Kentucky $3.78 5 Montana $3.69 6 Florida $3.32 7 Vermont $3.24 8 Maine $3.21 9 Alabama $3.17 10 New York $3.15 11 Louisiana $3.10 12 Ohio $3.00 13 Oklahoma $2.96 14 Connecticut $2.90 15 Hawaii $2.89 16 District of Columbia $2.86 17 Texas $2.84 18 Pennsylvania $2.80 19 New Hampshire $2.75 20 Illinois $2.69 21 Minnesota $2.69 22 Rhode Island $2.68 23 New Jersey $2.52 24 Missouri $2.50 25 South Carolina $2.50 26 Tennessee $2.48 27 New Mexico $2.41 28 Wyoming $2.40 29 Colorado $2.40 30 Nevada $2.36 31 Mississippi $2.29 32 Idaho $2.29 33 Nebraska $2.25 34 West Virginia $2.20 35 Wisconsin $2.18 36 Washington $2.17 37 North Carolina $2.17 38 Utah $2.06 39 Michigan $2.05 40 Maryland $2.03 41 Georgia $2.02 42 Oregon $1.97 43 Kansas $1.84 44 South Dakota $1.83 45 Iowa $1.75 46 Arizona $1.73 47 Massachusetts $1.70 48 Arkansas $1.59 49 Virginia $1.52 50 Indiana $1.24 51 North Dakota $1.10
The study found that for every $100 in payroll paid by a New York employer, $3.15 went towards workers' compensation premiums, making it the tenth most expensive workers' compensation premium in the United States. (133) That is, premium rates were lower in forty other states, plus the District of Columbia, than they were in New York. (134)
IV. THE 2007 REFORMS
When Governor Spitzer assumed his gubernatorial office in early 2007, he expressed his desire to work with both business leaders and labor leaders to come to a workable solution to those difficulties faced by New York's workers' compensation system. (135) His goal was to confront those issues complained about by business and labor: the benefit amounts received by injured workers and the premium amounts paid by employers for their workers' compensation coverage. (136)
By all accounts, the 2007 reforms, which became law on March 13, 2007, (137) were broad, sweeping, and touched several facets of New York's system. (138) Governor Spitzer summarized the 2007 reforms as changing the existing statute in the following manner:
(1) increasing maximum and minimum benefits for injured workers and indexing the maximum to New York's average weekly wage; (2) dramatically reducing costs in the workers' compensation system, making hundreds of millions of dollars available annually to be translated into premium reductions; (3) establishing enhanced measures to combat workers' compensation fraud; (4) replacing the Special Disability Fund with enhanced protections for injured veterans; (5) preventing insurances carriers from transferring costs to New York employers by closing the Special Disability Fund to new claims; and (6) creating a financing mechanism to allow for settlement of the Fund's existing liabilities. (139)
A. Increased Benefits to Injured Workers
The 2007 reforms addressed injured worker's indemnity benefits by increasing the maximum amount payable and ultimately tying the maximum amount payable to New York State's average weekly wage. (140) The maximum benefit amounts received by injured workers were increased as follows:
Table 2: Maximum Benefit Amounts by Date Date of Accident Maximum Benefit Amount On or after July 1, 2007 $500.00 per week141 On or after July 1, 2008 $550.00 per week142 On or after July 1, 2009 $600.00 per week143 On or after July 1, 2010 $739.83 per week144 On or after July 1, 2011 $772.96 per week145 On or after July 1, 2012 $792.07 per week146
B. Premium Reductions
The 2007 reforms brought forth several multi-faceted changes to New York's workers' compensation system, which were designed to reduce premium amounts paid by New York's employers. Each of these changes is discussed more thoroughly in the ensuing sections.
1. Combating Fraud
Fraud, both by employers and workers, put a huge cost tension on the workers' compensation system, and the 2007 reforms sought to address the issue. (147) With respect to employers, in early 2007, the Fiscal Policy Institute suggested that New York's employers were seriously deficient in that they failed to pay roughly anywhere from $500 million to $1 billion in workers' compensation premiums annually. (148) Underpayment and non-payment of workers' compensation premiums result in increased system costs because those employers who are fully compliant with the law bear the cost of noncompliance by virtue of paying higher premiums since employees will be compensated whether or not appropriate premiums have been paid. (149) To address this issue, the reforms contained a provision that prohibited employers who were found to be in violation of specific provisions from bidding on public works contracts for a period of one year from the conviction. (150) The reforms also increased the penalty for employer noncompliance from $250 for each ten-day period to $1000 for each ten-day period. (151)
Worker fraud can also drive up the premium costs paid by employers. (152) While worker fraud can take on many different forms, (153) commonly, an injured worker will continue to receive benefits even though he or she might not be entitled to them because he or she has returned to work and is earning a salary. (154) In paying out unjustified benefits, higher premiums are passed on to employers. (155) While the exact cost of worker fraud is unknown, some estimate that twenty percent of claims filed contain some element of fraud. (156) To address this matter, the 2007 reforms contained a provision that increased the number of personnel assigned to investigate fraud. (157) Further, the statute was amended to allow coordination between state agencies to facilitate the combat of fraud. (158)
2. Closure of the Special Disability Fund
When it was originally created in 1945, the Special Disability Fund ("the Fund") was designed to be "an anti-discriminatory tool to protect injured veterans" (159) by "encouraging the employment of disabled veterans." (160) Under section 15, subject to certain conditions, the Fund would reimburse employers for certain benefits paid by employers when certain workers with pre-existing conditions were permanently disabled as a result of their work-related injuries. (161) Although the Fund reimbursed employers for certain benefits, the reimbursement money came from the pockets of New York's employers, who were required to deposit money into the Fund in the form of assessments paid by insurance carriers, self-insured employers, and the State Insurance Fund. (162) The 2007 reforms started the process of phasing out the Fund, by closing it down to any new claims with a date of accident subsequent to July 1, 2007 and disallowing evidence for reimbursement claims after July 1, 2010. (163)
3. Settlement of Existing Liabilities
In addition to closing out the Special Disability Fund, the reforms created an entity known as the Waiver Agreement Management Office ("WAMO"). (164) WAMO was created and empowered "to negotiate and seek [b]oard approval for waiver agreements on behalf of the [S]pecial [D]isability [F]und." (165) The thought was that settling claims currently under the purview of the Special Disability Fund would either reduce or eliminate those previously discussed assessments, resulting in a cost-savings to employers. (166)
4. Benefit Caps
In passing the legislation, the dilemma became: how can employer premiums be reduced if employee benefits are increased at the same time? (167) Prior to 2007, New York's system was anomalous in comparison to other state systems because an injured worker could potentially collect benefits for life if he or she sustained a permanent, partial disability, (168) Under the 2007 reforms, a benefit cap was instituted such that workers with permanent partial disabilities were limited to between 225 and 525 weeks of benefits, depending on the worker's wage-earning capacity. (169)
V. IMPACT OF THE 2007 REFORMS AND CONCLUSIONS
Since the 2007 reforms were enacted, parties on both sides of the system seem to agree on one thing: the 2007 reforms have fallen far short of expectations. (170) While the legislation touched many facets of New York's workers' compensation system, the focus of this section will be on the two problematic areas most often complained about: workers' benefit levels and employer premium levels and whether the legislation was successful. (171)
A. Benefit Levels
When New York's statute was initially enacted, the workers' compensation system was designed to provide benefits equivalent to two-thirds of an injured worker's average weekly wage. (172) By tying maximum benefit levels to the average weekly wage, as opposed to a statutorily set maximum amount, New York's practices are more in line with how states across the country set maximum benefit rates. (173) In 2006, New York's average weekly wage was $1095.00 per week, (174) while the maximum benefit rate was $400.00 per week, (175) making the discrepancy between the two amounts one of the largest in the country. (176) As previously noted, in 2006, the $400.00 maximum benefit level represented 36.53% of New York's average weekly wage, while nationally, the median amount was 94.42%, (177) and the average amount was 93.22% of a state's average weekly wage. (178)
In contrast, in 2011, New York's average weekly wage was $903.30 per week, while the maximum benefit rate was $772.96 per week. (179) This maximum benefit level represented 85.57% of New York's average weekly wage, while nationally, the median amount was 104.05% (180) and the average amount was 106.95% of a state's average weekly wage. (181)
Of course, given the nuances behind an individual state's workers' compensation scheme, there are bound to be some differences and discrepancies that cannot be controlled when comparing one state to another. (190) At the barest level, however, injured workers complained about low benefit levels and Governor Spitzer and the New York State Legislature sought to address these injured workers' concerns. (191) In less than five years' time, the maximum benefit level was increased by $372.96, from $400.00 in 2006 to $772.96 in 2011.192 The discrepancy between New York's maximum benefit amount and New York's average weekly wage was thereby reduced from $695.00 in 2006 to $136.08 in 2011. (193)
B. Premium Levels
Comparing premium rate data from calendar year 2006 to calendar year 2010--the most recent year for which data is available--New York's employers did realize a premium reduction of $0.81 per every $100 spent by employers on payroll. (194) The states and the District of Columbia ranked as follows in comparison with the data that was available from 2006:
Table 4: Comparison of 2006 vs. 2010 Premium Levels by State 2006 Premium for every 2010 2006 $100 in Ranking Ranking State payroll (195) 1 5 Montana $3.69 2 1 Alaska $5.00 3 20 Illinois $2.69 4 13 Oklahoma $2.96 5 2 California $4.13 6 14 Connecticut $2.90 7 23 New Jersey $2.52 8 8 Maine $3.21 10 9 Alabama $3.17 10 19 New $2.75 Hampshire 12 17 Texas $2.84 12 25 South Carolina $2.50 13 10 New York $3.15 14 18 Pennsylvania $2.80 15 4 Kentucky $3.78 16 21 Minnesota $2.69 17 12 Ohio $3.00 18 7 Vermont $3.24 19 35 Wisconsin $2.18 20 26 Tennessee $2.48 21 30 Nevada $2.36 23 37 North Carolina $2.17 23 39 Michigan $2.05 24 41 Georgia $2.02 25 11 Louisiana $3.10 26 36 Washington $2.17 28 22 Rhode Island $2.68 28 44 South Dakota $1.83 29 32 Idaho $2.29 30 33 Nebraska $2.25 31 31 Mississippi $2.29 32 27 New Mexico $2.41 33 24 Missouri $2.50 34 3 Delaware $3.91 35 34 West Virginia $2.20 36 45 Iowa $1.75 37 28 Wyoming $2.40 38 46 Arizona $1.73 40 6 Florida $3.32 40 15 Hawaii $2.89 41 42 Oregon $1.97 42 40 Maryland $2.03 43 43 Kansas $1.84 44 47 Massachusetts $1.70 45 38 Utah $2.06 47 29 Colorado $2.40 47 49 Virginia $1.52 48 16 District of $2.86 Columbia 49 48 Arkansas $1.59 50 50 Indiana $1.24 51 51 North Dakota $1.10 2010 Premium Premium change Ranking for every between based on 2010 $100 in 2006- premium Ranking payroll (196) 2010 change 1 $3.33 -$0.36 26 2 $3.10 -$1.90 2 3 $3.05 $0.36 51 4 $2.87 -$0.09 40 5 $2.68 -$1.45 6 6 $2.55 -$0.35 27 7 $2.53 $0.01 45 8 $2.52 -$0.69 14 10 $2.45 -$0.72 13 10 $2.45 -$0.30 30 12 $2.38 -$0.46 21 12 $2.38 -$0.12 39 13 $2.34 -$0.81 11 14 $2.32 -$0.48 20 15 $2.29 -$1.49 5 16 $2.27 -$0.42 22 17 $2.24 -$0.76 12 18 $2.22 -$1.02 9 19 $2.21 $0.03 46 20 $2.19 -$0.29 32 21 $2.13 -$0.23 35 23 $2.12 -$0.05 43 23 $2.12 $0.07 49 24 $2.08 $0.06 47 25 $2.06 -$1.04 8 26 $2.04 -$0.13 38 28 $2.02 -$0.66 15 28 $2.02 $0.19 50 29 $1.98 -$0.31 29 30 $1.97 -$0.28 34 31 $1.96 -$0.33 28 32 $1.91 -$0.50 19 33 $1.90 -$0.60 18 34 $1.85 -$2.06 1 35 $1.84 -$0.36 26 36 $1.82 $0.07 49 37 $1.79 -$0.61 16 38 $1.71 -$0.02 44 40 $1.70 -$1.62 3 40 $1.70 -$1.19 7 41 $1.69 -$0.28 34 42 $1.63 -$0.40 24 43 $1.55 -$0.29 32 44 $1.54 -$0.16 36 45 $1.46 -$0.60 18 47 $1.39 -$1.01 10 47 $1.39 -$0.13 38 48 $1.32 -$1.54 4 49 $1.18 -$0.41 23 50 $1.16 -$0.08 42 51 $1.02 -$0.08 42
While the $0.81 premium rate reduction that has been realized in New York is certainly impressive, it is important that this reduction not be viewed in a vacuum. New York was one of forty-four states and the District of Columbia to realize a rate reduction between 2006 and 2010.197 The premium rate reductions ranged from $2.06 for every $100 spent on payroll (Delaware) to $0.02 for every $100 spent on payroll (Arizona). (198) Even in those remaining seven states that saw an increase in their premium rates, the increase was negligible, ranging from $0.01 for every $100 spent on payroll (New Jersey) to $0.36 for every $100 spent on payroll (Illinois). (199)
Other factors could have certainly contributed, or even caused, the rate reduction--specifically, the number of claims filed by employees. (200) The National Council on Compensation Insurance ("NCCI") noted that the economic recession from 2007-2009 has had significant implications on the workers' compensation industry and suggests several reasons why. (201) First, in a downtrodden economy, those workers that are gainfully employed will typically work fewer hours overall, resulting in a smaller window for an on-the-job injury to occur and, consequently, a smaller number of claims filed. (202) Data available for New York shows that the average number of hours worked by an employee was reduced from 34.1 hours in 2007 to 33.9 hours in 2010. (203) Second, NCCI suggests that many injured workers were fearful of losing their employment in a depressed economy and, therefore, postponed filing claims for their on-the-job injuries, (204) Data available from the New York's Workers' Compensation Board seems to support this hypothesis as calendar year 2008 and calendar year 2009 had some of the lowest numbers of new assembled claims in recent years. (205) Concomitantly with this hypothesis is the idea that once the economy begins to turn around, those injured proceed with filing workers' compensation claims. (206) Again, data available from the New York's Workers' Compensation Board supports this idea as calendar year 2010 saw a slight uptick in new claims. (207)(NCCI also reported that on a national level, while there was an overall downward trend with respect to the number of workers' compensation claims that have been filed over the past twenty years, there was a three percent increase in the number of claims filed in 2010. (208)
As noted previously, when the 2007 reforms were enacted, Governor Spitzer hailed them as advantageous for both workers and employers. (209) In the years since the legislation was passed, however, there have been lingering complaints that the reforms have fallen far short of what was anticipated. (210) In spite of these misgivings, the two main goals of the legislation have more or less been realized. That is, New York's injured workers have seen an increase to their maximum weekly benefits while New York's employers have seen a reduction to their premium levels. (211) Since maximum weekly benefits are now tied to New York's average weekly wage, injured worker benefit levels should remain adequate for the foreseeable future.
New York's employers, however, are unlikely to see continued reduced (or even stagnant) premium levels, particularly as the economy begins to pick up. As previously discussed, in the short-term, New York's employers have realized lower workers' compensation premiums, but a long-term continuation of this trend is improbable when employer premium levels are procyclical in relation to employee benefit levels (212) That is, empirical studies on workers' compensation systems have almost universally demonstrated that higher benefit levels result in higher premiums rates. (213) Conversely, when employers see low workers' compensation premiums, it is because injured worker benefit levels are low. (214)
Ultimately, there is a tangled and dependent connection between employee benefit levels, the number of claims filed, and employer premium levels. (215) Simply, the higher benefit levels in New York will cause a chain reaction leading to injured workers filing a larger number of workers' compensation claims, (216) which ultimately translates into higher premiums for New York's employers. The economic conditions that were present immediately following the 2007 reforms can only stave off the number of claims filed by injured workers for so long.
This is not to say that the new benefit levels should be reduced or remain stagnant. To reduce the number of claims being filed, even in the wake of higher employee benefits, New York should consider looking to a state that has consistently seen lower employer premium rates alongside fewer claims: Oregon. (217) While the Oregon reforms, like New York's, were comprehensive, two areas addressed by the Oregon reforms warrant further consideration for application and implementation in New York to reduce the number of claims filed. First, Oregon strengthened health and safety programs within the state, including the bulking up of enforcement procedures with the state's Occupational Safety and Health Division. (218) Second, Oregon reduced the types of compensable claims covered by workers' compensation plans. (219)
Given the comprehensiveness and complexity of any state's workers' compensation scheme, there is no one right answer for reducing the number of claims filed, thereby reducing employer premium rates. However, given the long-term success that Oregon has had as a result of these reforms, New York should give some consideration to strengthening health and safety programs and enforcement and reducing the types of claims that are deemed compensable under the workers' compensation statute--both areas which were untouched by the 2007 reforms.
Mary L. D'Agostino *
* Editor-in-Chief; J.D. Candidate, Albany Law School, 2013; Le Moyne College, B.S. Human Resources Management and Industrial Relations, 2006. My sincerest thank you to Christine Sgarlata Chung for her continuing support and guidance, the membership of the Albany Law Review for their editorial support, and to Joshua and Lucca Bennett for their endless encouragement.
(1) At the turn of the twentieth century in the United States, workers injured on the job were compensated via the "negligence liability system" which was the "common law ruled of negligence combined with the defenses of assumption of risk, fellow servant, and contributory negligence." Price V. Fishback & Shawn Everett Kantor, A Prelude To The Welfare State: The Origins Of Workers' Compensation 28 (2000). When President Theodore Roosevelt delivered his State of the Union Address to Congress in late 1908, he noted that there was no other area where state and national legislation lagged "so far behind practically the entire civilized world." Theodore Roosevelt, President, U.S., Eighth Annual Message (Dec. 8, 1908), reprinted in Joint Comm. On Printing Of The House & Senate, 16 A Compilation Of The Messages And Papers Of The Presidents 7198, 7208 (1917); see also J. Hampden Dougherty, Constitutional History Of The State Of New York 363 (The Lawbook Exchange, LTD, 2d ed. 2004) (explaining that President Roosevelt mentioned the lack of liability and compensation legislation in the United States in his 1908 address).
(2) See generally John M. Kleeberg, From Strict Liability to Workers' Compensation: The Prussian Railroad Law, the German Liability Act, and the Introduction of Bismarck's Accident Insurance in Germany, 1838-1884, 36 N.Y.U.J. INT'L. L. & POL. 53, 61-62 (2003) (tracing the roots of modern liability schemes by examining them in the context of Germany's enactment of the first modern strict liability act to the first modern workers' compensation act). Other European countries soon followed Germany's lead, with Austria enacting a workers' compensation statute in 1887, Norway in 1894, Finland in 1895, and Great Britain in 1897. E. Clarence Alken, Accidents--Workmen's Compensation, 1 N.Y. ST. B. ASS'N BULL. 361, 361 (1929). Italy, Denmark and France soon followed suit by enacting laws in 1898. Id. In addition, Spain, the Netherlands, Greece, and Sweden enacted statutes after the turn of the century. Id.
(3) See Fishback & Kantor, supra note 1, at 103. All but six states passed some form of a workers' compensation scheme between 1911 and 1920. Report Of The National Commission On State Workmen's Compensation Laws 34 (1972). Mississippi was the last state to enact a workers' compensation statute in 1949. Id. at 45; P. Blake Keating, Historical Origins of Workmen's Compensation Laws in the United States: Implementing the European Social Insurance Idea, 11 KAN. J.L. & PUB. POL'Y 279, 301 (2001-02).
(4) See infra Part II.A. Wisconsin, in 1911, was the first state to enact a workers' compensation scheme that was able to withstand judicial review. Eston W. Orr, Jr., Note, The Bargain is No Longer Equal: State Legislative Efforts to Reduce Workers' Compensation Costs Have Impermissibly Shifted the Balance of the Quid Pro Quo in Favor of Employers, 37 GA. L. REV. 325, 325 (2002) (citing Martha T. McCluskey, The Illusion of Efficiency in Workers" Compensation "Reform", 50 RUTGERS L. REV. 657, 669 (1998)). Since the Wisconsin workers' compensation statute was elective for Wisconsin's employers, it more easily withstood a constitutional challenge. See Borgnis v. Falk Co., 133 N.W. 209, 218 (Wis. 1911).
(5) Prior to 1978, New York's system was commonly referred to as "workmen's compensation" until the title of the law was changed to "workers' compensation." 1978 N.Y. Laws 5. The change was made to "obviate any sexist distinction" between workers and bring New York into conformance with other states already using the term "workers" in their respective statutes. Memorandum Of The Worker's Compensation Board, S. 5049, 201st Sess. (1978), reprinted in N.Y. STATE LEGISLATIVE ANNUAL 1978, at 103.
(6) N.R. Kleinfield & Steven Greenhouse, For Injured Workers and Their Bosses, a Costly Legal Swamp, N.Y. TIMES, Mar. 31, 2009, at A1 ("New York, a pioneer of the [workers' compensation system,] ... is widely recognized as the most adversarial.").
(7) See, e.g., Erik Kriss, Local Lawyer Nominated to Head Workers Comp Board, SYRACUSE HERALD-J., Mar. 14, 1995, at C8 (statement of Governor Pataki) ('"Skyrocketing workers' compensation costs are one of the main obstacles to economic growth and opportunity.'"); see also Alan Wechsler, Proposal Would Cap Payment Length, TIMES UNION (Albany), Mar. 24, 2004, at E1 ("[T]he cost of workers' compensation is driving business out of New York.").
(8) See, e.g., Robert Grey, Op-Ed., The Claim Game, N.Y. TIMES, Oct. 1, 2006, [section] 14, at 13 (arguing that the benefits received by employees injured on the job are woefully inadequate and too many premium dollars paid by employers are kept by insurance companies).
(9) See generally Press Release, Workers' Compensation Legislation Will Reduce Costs and Increase Benefits (Mar. 13, 2007) (on file with author) (internal quotation marks omitted) ("[When an agreement was reached, New York State was] reversing a trend that hampered business growth for years and" will be "better protecting workers in the event of a job-related injury.").
(11) Steven Greenhouse & N.R. Kleinfeld, Deal in Albany Overhauls Pay For Worker Aid, N.Y. TIMES, Feb. 28, 2007, at A1 [hereinafter Deal in Albany] (statement of Governor Eliot Spitzer) ('"This is a remarkable win-win situation for both workers and employers."'); see also Press Release, Landmark Workers' Comp Accord Benefits Business and Labor (Feb. 27, 2007) (on file with author) (statement of Governor Eliot Spitzer) C'[W]e've developed an approach that will achieve the twin goals of helping injured workers and improving the state's competitiveness.'").
(12) See generally Press Release, supra note 9 (providing statements supporting the legislation from multiple state leaders).
(13) See infra Part II.
(14) See infra Part III.
(15) See infra Part IV.
(16) See infra Part V.
(17) Ives v. S. Buffalo Ry. Co., 94 N.E. 431, 436 (N.Y. 1911); Ives v. S. Buffalo Ry. Co., 124 N.Y.S. 920, 922 (Sup. Ct. Erie County 1910), aff'd, 125 N.Y.S. 1125 (App. Div. 4th Dep't 1910), rev'd, 94 N.E. 431 (N.Y. 1911). An early study found that when a fatal industrial accident occurred, fifty-three percent of families were left without recourse in that they received no compensation and "were left by the employer to bear the entire income loss." CRYSTAL EASTMAN, WORK ACCIDENTS AND THE LAW 121 (Paul Underwood Kellogg, ed., photo, reprint 1969) (1910). Even though employers did not compensate for loss of income, they did tend to pay for the injured worker's medical bills. Id. at 123 (noting that hospital charges were paid by the employer in eighty-four percent of these cases).
(18) 1909 N.Y. Laws 1310-11. The Commission consisted of fourteen people: eight appointed by members of New York's legislature and six appointed by the governor. Id. at 1310; see also Ives, 94 N.E. at 435 (explaining the committee's membership). The Commission became known as the Wainwright Commission after Senator Wainwright, who was elected as chairman. Ives, 94 N.E. at 436.
(19) 1909 N.Y. Laws 1310. The Commission was given wide investigatory powers and was permitted, among other things, to examine witnesses and documents and administer oaths. Id. at 1311. The Commission was further appropriated ten thousand dollars to conduct its investigation. Id.
(20) Id. at 1310.
(21) Commission Appointed Under Chapter 518 Of The Law Of 1909 To Inquire Into The Question Of Employers' Liability And Other Matters, First Report, S. Doc. No. 38, 133d Sess., at 2, 73, 107, 108 (1910) [hereinafter Wainwright Commission, First Report].
(22) Id. at 7. The Wainwright Commission's dissatisfaction with the system in place at the time of the investigation was premised on four objections. Id. at 19. First, it felt that very few injured workers received substantial compensation. Id. at 19-28 (including data demonstrating that few workers received substantial compensation). Second, it felt that the system was extremely wasteful. Id. at 19, 29-32 (containing data on the high litigation and settlement costs). Third, it found that the system moved at a snail's pace, with a lengthy delay between injury and actual compensation for the injury. Id. at 19, 32-33. Fourth, the system that was in place caused antagonistic feelings between the employer and the employee. Id. at 19, 33-36.
(23) Id. at 8, 10.
(24) Id. at 50. In the Wainwright Commission's first report, one member, George W. Smith, who had been appointed by the governor, wrote separately and expressed his view that while the research conducted had been extensive, any recommendations were premature and additional research and investigation were necessary before making an adequate recommendation. Id. at 1, 69.
(25) Id. at 50; see also id. at 50-51 (listing the prospective categories of employment to which the Act would apply).
(26) See 1910 N.Y. Laws 625-33.
(27) Id. at 633.
(28) Id. at 629.
(29) Brief in Support of Workmen's Compensation Act at i, Ives v. S. Buffalo Ry. Co. (N.Y. 1911).
(31) 1910 N.Y. Laws 631.
(32) Weekly benefits to incapacitated workers were capped at ten dollars per week and were not permitted to extend beyond eight years from the date of injury. Id.
(33) Ives v. S. Buffalo Ry. Co., 124 N.Y.S. 920, 922 (Sup. Ct. Erie County 1910), aff'd, 125 N.Y.S. 1125 (App. Div. 4th Dep't 1910), rev'd, 94 N.E. 431 (N.Y. 1911).
(35) Brief in Support of Workmen's Compensation Act, supra note 29, at i.
(36) Ives, 124 N.Y.S. at 922, 924.
(37) Id. at 922.
(40) Id. at 923-24.
(41) Ives v. S. Buffalo Ry. Co., 125 N.Y.S. 1125, 1125 (App. Div. 4th Dep't 1910), rev'd, 94 N.E. 431 (N.Y. 1911).
(42) Brief in Support of Workmen's Compensation Act, supra note 29, at ii.
(44) Ives v. S. Buffalo Ry. Co., 94 N.E. 431,435-36 (N.Y. 1911).
(45) Id. at 448. Following the Ives decision, the elective compensation scheme remained in effect, but very few employers subscribed to it. FISHBACK & KANTOR, supra note 1, at 130.
(46) Ives, 94 N.E. at 437. This is not to say the Court of Appeals' decision was universally lauded when it was handed down. The decision, in fact, was bitterly divisive and was both "violently criticised [sic] and vigorously defended." DOUGHERTY, supra note 1, at 364. Despite the divisiveness, the decision was not at all unusual for a Lochner-era court, which frequently struck down "social and economic legislation as unconstitutional encroachments on the contract and property rights of businesses." Orr, supra note 4, at 367 (citing McCluskey, supra note 4, at 676) (reiterating that Lochner-era courts rejected such legislation on constitutional grounds).
(47) RICHARD A. GREENWALD, THE TRIANGLE FIRE, THE PROTOCOLS OF PEACE, AND INDUSTRIAL DEMOCRACY IN PROGRESSIVE ERA NEW YORK 129 (2005); 141 Men and Girls Die in Waist Factory Fire; Trapped High Up in Washington Place Building," Street Strewn with Bodies; Piles of Dead Inside, N.Y. TIMES, Mar. 26, 1911, at 1 [hereinafter 141 Men and Girls Die].
(48) In the days, weeks, and months following the tragedy, there was a discrepancy in the number of lives claimed in the Triangle Shirtwaist factory fire. See, e.g., 141 Men and Girls, supra note 47, at 1 (noting that 141 employees had perished); 147 Dead, Nobody Guilty, LITERARY DIG., Jan. 6, 1912, at 6, reprinted in JOANN E. ARGERSINGER, THE TRIANGLE FIRE: A BRIEF HISTORY WITH DOCUMENTS 110 (2009) (indicating that 147 employees had lost their lives); New York Fire Kills 148." Girl Victims Leap to Death From Factory, CHI. SUNDAY TRIB., Mar. 26, 1911, at 1 (denoting that 148 victims died in the factory fire); Thrilling Incidents in Gotham Holocaust That Wiped Out One Hundred and Fifty Lives, CHI. SUNDAY TRIB., Mar. 28, 1911, at 2 (noting that 150 employees had lost their lives in the fire). Even articles appearing decades after the fire occurred did not agree on the exact number of employees who died on that fateful day. See, e.g., Ralph Katz, 50 Years Ago Today, 147Died in the Triangle Shirtwaist Fire, N.Y. TIMES, Mar. 25, 1961, at 28 (commemorating the 1911 fire and noting that 147 people had perished in the disaster); Patricia McLaughlin, 146 Killed in 1911 Triangle Fire Still Remembered, TIMES UNION (Albany), Mar. 25, 1990, at G7 (indicating that 146 had been killed in the fire). In more recent years, it appears widely accepted that 146 employees of Triangle Shirtwaist Company perished on March 25, 1911, as a result of the fire. See, e.g., DAVID VON DREHLE, TRIANGLE: THE FIRE THAT CHANGED AMERICA 3 (2003); Allen Abel, Even Before 9/11, New York Was No Stranger to Tragedy, CALGARY HERALD, Sept. 18, 2011, at All ("[One hundred forty-six] seamstresses ... were incinerated."); Clyde Haberman, Choosing Not to Forget What Is Painful to Recall, N.Y. TIMES, Mar. 26, 2010, at A19 ("[A] fire at the Triangle [S]hirtwaist factory took the lives of 146 garment workers."); Vince Sgambati, Echoes of 1911 Triangle Fire, POST STANDARD, Mar. 31, 2011, at A15 (specifying that 146 employees perished in the blaze); Tom Topousis, Gov Boosts Sweatshop 'Cops'to Help Mark 1911 Factory Fire, N.Y. POST, Mar. 26, 2001, at 12 ("[One hundred fortysix] workers.., were burned to death.").
(49) VON DREHLE, supra note 48, at 3; David Von Drehle, Trial By Fire: Vital Records Were Missing-And Would Have Stayed Missing Were It Not for a Dead Lawyer's Vanity, SMITHSONIAN, Aug. 2006, at 93, 93; see also People v. Gonzalez, 625 N.Y.S.2d 844, 847 n.2 (Sup. Ct. Bronx County 1995) (describing the fire as "one of the worst" in New York City's history). See NEW YORK STATE WORKERS' COMPENSATION BOARD, WORLD TRADE CENTER CASES IN THE NEW YORK WORKERS' COMPENSATION SYSTEM 6 (2009), available at http://www.wcb.ny.gov/content/main/TheBoard/WCBWTCReport2009.pdf, for more information on the impact that the September llth terrorist attacks had on New York's workers' compensation system.
(50) Lawrence M. Friedman & Joseph Thompson, Total Disaster and Total Justice: Responses to Man-Made Tragedy, 53 DEPAUL L. REV. 251,257 (2003).
(51) 141 Men and Girls Die, supra note 47, at 1.
(52) Id; GREENWALD, supra note 47, at 129.
(53) See William Greider, Introduction to LEON STEIN, THE TRIANGLE FIRE, at v vi (2001) (asserting that the victims of the fire were immigrant and female).
(54) See STEIN, supra note 53, at 22-23.
(55) Id. at 23.
(56) Id. at 25. Even though by today's standards, the laws seem woefully inadequate and ripe for tragedy, the dangerous conditions of the Asch Building, and other factories in the area did not go unnoticed. See, e.g., Samuel Gompers, Hostile Employers, See Yourselves As Others Know You, 18 AM. FEDERATIONIST 353, 356-61 (1911) (outlining several criticisms of the conditions and noting that a local industrial engineer had written a letter to company officials offering to train them in conducting fire drills, which had gone unanswered).
(57) GREENWALD, supra note 47, at 129.
(58) Id. at 129-30; STEIN, supra note 53, at 33. The scrap fabric was the by-product of the clothing made by employees of Triangle Shirtwaist. STEIN, supra note 53, at 33. A scrap fabric dealer would stop by the eighth floor every so often to collect and pay Triangle owners for these scrap pieces. GREENWALD, supra note 47, at 129-30; STEIN, supra note 53, at 33. Prior to the disaster, a fabric dealer had collected more than two thousand pounds of scrap fabric in January of 1911. STEIN, supra note 53, at 33.
(59) See generally GREENWALD, supra note 47, at 129 (positing that the most likely cause of the fire was the careless discarding of a cigarette).
(60) Id. New York City did not turn its focus to the hazards associated with permitting smoking in the workplace until more than eighty years after the Triangle fire, when it enacted the Smoke-Free Air Act of 1995. N.Y.C., N.Y., ADMIN. CODE [section][section] 17-501-14 (1995). While the Act still permitted smoking in the workplace in certain limited circumstances, see id. [section] 17-505, it significantly curtailed it in other respects, id. [section][section] 17-501-14.
(61) The precise time is unknown. See STEIN, supra note 53, at 30.
(62) GREENWALD, supra note 47, at 129; STEIN, supra note 53, at 30, 31.
(63) GREENWALD, supra note 47, at 130; STEIN, supra note 53, at 33-34. Eva Harris was the sister of Isaac Harris, a co-owner of the Triangle Shirtwaist factory. STEIN, supra note 53, at 33-34.
(64) Id. at 34.
(65) See 141 Men and Girls Die, supra note 47, at 1.
(66) GREENWALD, supra note 47, at 130; see STEIN, supra note 53, at 37-39. Blanck and Harris admitted during their later criminal trial that they were concerned with preventing employee theft, although the value of goods taken over the years was not in excess of twenty-five dollars. Transcript of Record at 1864-68, People v. Harris, 134 N.Y.S. 409 (N.Y. County Ct. 1911) (No. 82,980), available at http://digitalcommons.ilr.cornell.edu/triangletrans/18 [hereinafter Transcripts of Criminal Trial].
(67) 141 Men and Girls Die, supra note 47, at 1 (noting that the tenth floor workers were able to escape the deadly by exiting onto the roof of the nearby New York University building via the Asch building's roof).
(68) GREENWALD, supra note 47, at 130.
(69) See id.; 141 Men and Girls Die, supra note 47, at 1.
(70) GREENWALD, supra note 47, at 133-34; 141 Men and Girls Die, supra note 47, at 1.
(71) STEIN, supra note 53, at 73.
(72) See note 48, supra, for a discussion on the number of lives lost in the fire.
(73) Transcripts of Criminal Trial, supra note 66, at 1.
(74) People v. Harris, 134 N.Y.S 409, 410 (Ct. Gen. Sess. N.Y. County 1911).
(75) Id. at 416 ("The fourth indictment [was disallowed because it] ... contain[ed] no statement of the facts and circumstances which constitute the offense with which the defendants [were] charged.").
(76) Transcripts of Criminal Trial, supra note 66, at 1. It was generally felt by not only members of the judiciary, but by the general public, that if a client set out to hire Mr. Steuer for representation, then the client was desperate. ARON STEUER, MAX D. STEUER: TRIAL LAWYER 21 (1950). Mr. Steuer's cross-examination during this particular trial has been lauded by the legal community. Id. at 109; see also Max D. Steuer, Two "Lurking, if Not Great, Dangers" That Confront a Cross-Examiner, in FRANCIS WELLMAN, THE ART OF CROSS-EXAMINATION 193-203 (4th ed. 1986) (discussing the significance of a well-executed cross-examination).
(77) See Transcripts of Criminal Trial, supra note 66, at 3, 2204; see also Triangle Owners Acquitted by Jury, N.Y. TIMES, Dec. 28, 1911, at 1 (discussing the jury's decision, which found Harris and Blanck not guilty of first and second-degree manslaughter). The jury had been asked to decide whether one Triangle Shirtwaist employee, Margaret Schwartz, had asphyxiated on smoke because Harris and Blanck "had locked and kept locked the door on the ninth floor" and whether there was a "cause and effect between [the] locked door on the one hand, if it was locked, and the death of Margaret Schwartz on the other hand." Transcripts of Criminal Trial, supra note 66, at 12, 2192, 2194. The general public was outraged at the acquittal of Harris and Blanck and the District Attorney re-filed charges against the pair in March of the following year. See Triangle Owners Acquitted by Jury, supra, at 1 (stating that charges were still pending on other indictments at the time of the acquittal); Discharge Triangle Owners, N.Y. TIMES, Mar. 22, 1912, at 3. The presiding judge, Judge Samuel Seabury, ordered the impaneled jury to find for the defendant, citing double jeopardy principles. GREENWALD, supra note 47, at 152; STEIN, supra note 53, at 205.
(78) See Ives v. S. Buffalo Ry. Co., 94 N.E. 431, 448 (N.Y. 1911). In the aftermath of the fire, the Red Cross Committee collected $103,899.38 for the fire victims' families. RED CROSS EMERGENCY RELIEF COMM., EMERGENCY RELIEF AFTER THE WASHINGTON PLACE FIRE: NEW YORK, MARCH 25, 1911, at 7 (1912). In granting relief to families, each fire victim was considered on a case-by-case basis and the Red Cross's goal was to avoid a lower standard of living for a particular family because of the loss sustained. Id. at 8. Of the nearly $104,000 that the Red Cross collected, $80,556.16 in relief had been distributed at the time of the Red Cross' report. Id. at 16. Relief ranged from $50 given to a young Italian woman to compensate her for the clothing she lost in the fire, id. at 20, to $1,000 to a young Russian girl paralyzed by the fire, id. at 28.
(79) GREENWALD, supra note 47, at 152; STEIN, supra note 53, at 207. Although the amount paid out to the victim's families in the twenty-three civil suits amounted to less than $2000, GREENWALD, supra note 47, at 152; STEIN, supra note 53, at 207, Harris and Blanck collected $264,925 in insurance proceeds, which was $64,925 more than their policy limit, Arthur F. McEvoy, The Triangle Shirtwaist Factory Fire of 1911: Social Change, Industrial Accidents, and the Evolution of Common-Sense Causality, 20 LAW & SOC. INQUIRY 621, 641 (1995).
(80) McEvoy, supra note 79, at 644.
(81) See, e.g., 141 Men and Girls Die, supra note 47, at 1 ("[T]hirty bodies clogged the elevator shaft."); New York Fire Kills 148: Girl Victims Leap to Death From Factory, supra note 48, at 1 ("[A]t dusk firemen and policemen were pulling many half nude and burned corpses from this hole.").
(82) In examining how problems capture the attention of those best-equipped to solve them, John W. Kingdon noted that "[c]onditions must deteriorate to crisis proportions before the subject achieves enough visibility to become an active agenda item." JOHN W. KINGDON, AGENDAS. ALTERNATIVES, AND PUBLIC POLICIES 100 (1984).
(83) GREENWALD, supra note 47, at 145 ("[T]he Fire Department, Building Department, Office of the Mayor, Coroner's Office ... District Attorney ... [and] the New York State Assembly and Senate [opened investigations].").
(84) 1911 N.Y. Laws 1269-70. The Commission was to consist of two members fi'om the senate, three members from the assembly, and four other governor-appointed members. Id. at 1269. Famed labor leader and founder of the American Federation of Labor, Samuel Gompers, was one of the nine members appointed to the Commission. N.Y. FACTORY INVESTIGATING COMM'N, PRELIMINARY REPORT, S. 21-30, 135th Sess., pt. 1, at 14 (1912) [hereinafter FIC, PRELIMINARY REPORT].
(85) 1911 N.Y. Laws 1269-70. Much like the Wainwright Commission of 1909, the FIC was appropriated ten thousand dollars to assist it in its investigation. Id. at 1270.
(87) FIC, PRELIMINARY REPORT, supra note 84, at 22-24.
(88) GREENWALD, supra note 47, at 157. While that Wainwright Commission seemed to have very broad powers for the time period in New York, the scope of the FIC's powers has been described as "unprecedented." VON DREHLE, supra note 48, at 212. The FIC had the authority "to subpoena witnesses and documents, [employ counsel and] to elect its own members." Id.: see also 1911 N.Y. Laws 1270 (describing the powers of the commission and its members).
(89) McEvoy, supra note 79, at 646.
(90) GREENWALD, supra note 47, at 170-78 (describing various laws passed on different topics).
(91) See Ives v. S. Buffalo Ry. Co., 94 N.E. 431, 441-42 (N.Y. 1911) (stating that the state may change statutes and common law to create liabilities that never existed before but such power must exercised be within constitutional limits). At the time of the Court of Appeals' decision in Ives v. South Buffalo Railway Co., the process of amending New York's constitution was governed by Article XIV of the Fourth Constitution of New York, 1894. N.Y. CONST. OF 1894, art. XIV, [section][section] 1, 2. Article XIV provided that the constitution could be amended at a constitutional convention, which could either be called by the legislature or a majority of New York's voters answering yes to the question: "Shall there be a convention to revise the [c]onstitution and amend the same?" Id. [section] 2. Alternatively, the New York State Assembly or New York State Senate could propose a constitutional amendment, ld. [section] 1. If certain requirements are met, the proposed amendment is then submitted to the electorate for consideration. Id. The proposed amendment would take effect only if the majority of voters approved it. Id. While these two methods are substantially similar to the constitutional amendment process that is in place under New York's current constitution, for a more thorough discussion of the evolution of the amendment process in New York, see Jerald A. Sharum, Comment, A Brief History of the Mechanisms of Constitutional Change in New York and the Future Prospects for the Adoption of the Initiative Power, 70 ALB. L. REV. 1055 (2007).
(92) See 1912 N.Y. Laws 1382-83; S. 1521, 136th Sess. (1913), reprinted in NEW YORK LEGISLATIVE RECORD AND INDEX 657 (1913); see also The Four Amendments, N.Y. TIMES, Nov. 3, 1913, at 8 (listing each of the four amendments).
(93) N.Y. CONST. of 1894, art. I, [section] 19 (1913); The Four Amendments, supra note 92, at 8; see also N.Y. CONST. art I, [section] 18 ("Nothing contained in this constitution shall be construed to limit the power of the legislature to enact laws for the protection of the lives, health, or safety of employees; or for the payment.., of compensation for injuries to employees or for death of employees...."). Despite the fact that the enactment of the statute was preceded by the constitutional amendment, challenges to the constitutionality of the newly passed workers' compensation law were still brought, albeit unsuccessfully. See Jensen v. S. Pac. Co., 109 N.E. 600, 604 (N.Y. 1915) ("[The enacted statute] is plainly justified by the amendment to our own state [c]onstitution, and [does not violate] the Constitution of the United States."), rev'd on other grounds, 244 U.S. 205 (1918); N.Y. Cent. R.R. Co. v. White, 243 U.S. 188, 208-09 (1917) (affirming the Court of Appeals' decision and finding that the U.S. Constitution was not violated by the enactment of the workers' compensation statute).
(94) 1914 N.Y. Laws 216; Compensation Bill Is Signed By Glynn, N.Y. TIMES, Mar. 17, 1914, at 1.
(95) 1914 N.Y. Laws 250-51. The first claim for benefits under the new Act was filed by Sadie Althen, whose husband, William Althen, fell twenty-two stories to his death on July 1, 1914, as he traversed a building's framework with lumber. Walter Gellhorn & Louis Lauer, Administration of the New York Workmen's Compensation Law (Part I), 37 N.Y.U.L. REV. 3, 7 (1962).
(96) The rapidity of the constitutional amendment and enactment of the law has been deemed impressive. DOUGHERTY, supra note 1, at 365-66; see also PETER J. GALIE, ORDERED LIBERTY: A CONSTITUTIONAL HISTORY OF NEW YORK 206 (1996) (describing how quickly the amendment passed). New York was one of seven states to amend their state constitutions in order to temper constitutional challenges to workers' compensation schemes. Keating, supra note 3, at 300.
(97) See 1914 N.Y. Laws 217-20. Those employees not employed in one of the enumerated "hazardous" occupations were precluded from a benefits award. See, e.g., Schmidt v. Berger, 116 N.E. 382, 383 (N.Y. 1917) (reversing the appellate division and finding that a building superintendent who broke his arm after a fall from a stepladder was precluded from workers' compensation benefits because he was not engaged in a hazardous occupation); see also Martin Minkowitz, Practice Commentaries, in N.Y. WORKERS' COMP. LAW [section] 2 (McKinney 2012) ("The Workers' Compensation Law was originally conceived only to provide coverage for employees engaged in a limited number of specified hazardous employments.").
(98) Gellhorn & Lauer, supra note 95, at 16.
(99) N.Y. WORKERS' COMP. LAW [section] 2(5) (McKinney 2012) ('"Employment' [is defined broadly and] includes employment in a trade, business or occupation carried on by the employer for pecuniary gain."); see also Martin Minkowitz, Practice Commentaries, in N.Y. WORKERS' COMP. LAW [section] 3 (McKinney 2012) (observing that workers' compensation coverage has expanded over the years to include "almost all employees" employed in the state).
(100) N.Y. WORKERS' COMP. LAW [section] 10 (McKinney 2012). However, employers are not liable for willful injuries or injuries which result solely from the use of controlled substances or alcohol. Id.
(101) Id. [section] 11. This doctrine of exclusive liability has been found inapplicable in the case of uninsured employers and employer-caused intentional/deliberate injuries. See Martin Minkowitz, Practice Commentaries, in WORKERS' COMP. [section] 11 (McKinney 2012) (explaining the uninsured employer exception in certain circumstances). In addition, an employee may still bring suit against a third party that is responsible for injuries, even if the injury occurred on the job. Burns v. Varriale, 879 N.E.2d 140, 144 (N.Y. 2007) (quoting WORKERS' COMP. [section] 29(1)).
(102) See supra notes 100-01 (requiring employer to provide compensation to disabled employees); infra notes 103-05 (requiring, inter alia, that an employer must provide treatment and health care for employees, and allow for employees to select physician of his or her choice). If an injured worker is killed in the course and scope of his or her employment, the surviving spouse and children are entitled to death benefits. WORKERS' COMP. [section] 16. Parents or siblings might be entitled to benefits if there is not a surviving spouse or child. Id.
(103) WORKERS' COMP. [section] 13.
(104) Id. [section] 13-a. Other states, in contrast, do not permit injured workers to select their medical provider. See, e.g., ALA. CODE [section] 25-5-77 (2012) (allowing the employer to select the injured workers' medical provider and allowing the injured worker to switch providers once if dissatisfied with selected physician); MO. REV. STAT. [section] 287.140 (2012) (providing that an employee has the right to select his or her own medical provider "at his own expense").
(105) WORKERS' COMP. [section] 13-b. There are certain exceptions to the Board-authorization requirement, including those medical providers rendering emergency care. Id. It has been estimated that only one third of New York's active and licensed physicians are authorized to treat workers' compensation claimants. Greenhouse & Kleinfield, supra note 6, at A22.
(106) WORKERS' COMP. [section] 15; see also Martin Minkowitz, Practice Commentaries, in WORKERS' COMP. [section] 15 (explaining that benefits are determined based on the extent and duration of a worker's injury).
(107) WORKERS' COMP. [section] 140. As initially enacted, the law provided for five commissioners. 1914 N.Y. Laws 236.
(108) WORKERS' COMP. [section] 141.
(109) Id. [section] 150(a), (b); Martin Minkowitz, Practice Commentaries, in WORKERS' COMP. [section] 150. However, the Board reserves "road authority to resolve factual issues based on credibility of witnesses and draw any reasonable inferences fl-om the evidence in the record." Myers v. Eldor Contracting Co., 705 N.Y.S.2d 108, 109 (App. Div. 3d Dep't 2000). The Board "[is] not bound by the [administrative law judge]'s credibility determination" and [is] entitled to make its own findings." Ortiz v. Five Points Corr. Facility, 762 N.Y.S.2d 535, 535 (App. Div. 3d Dep't 2003) (emphasis added).
(110) WORKERS' COMP. [section] 23; Martin Minkowitz, Practice Commentaries, in WORKERS' COMP. [section] 23. One of the three Board Panel members must be licensed to practice law. Minkowitz, supra. If a party elects to undertake an appeal to the Board Panel, the application must be filed with the board within thirty days of the decision. Id.
(111) WORKERS' COMP. [section] 23. Similar to the time frames set forth with respect to appeals to the Board Panel, those parties electing to appeal to the Appellate Division, Third Department must do so within thirty days after the Board renders its final decision. Minkowitz, supra note 110.
(112) See WORKERS' COMP. [section] 23.
(113) 2007 N.Y. Sess. Laws 1446 (McKinney).
(115) Jon Coppelman, Comp in New York: Death Spiral Finally at an End?, WORKERS' COMP INSIDER (Jan. 25, 2007), http://www.workerscompinsider.com/archives/000615.html.
(116) GOVERNOR'S PROGRAM BILL MEMORANDUM, Assemb. 7946, 213th Sess. (1990), reprinted
in NEW YORK STATE LEGISLATIVE ANNUAL 1990, at 455 [hereinafter GOVERNOR'S BILL MEMORANDUM]. New York is one of thirty-six states that compensate an injured worker at two-thirds of his or her gross earnings. H. Allan Hunt, Benefit Adequacy in State Workers' Compensation Programs, 65 SOC. SECURITY BULL., no. 4, 2003-2004, at 24, 25.
(117) See GOVERNOR'S BILL MEMORANDUM, supra note 116, at 456.
(118) See id. at 455; GOVERNOR'S APPROVAL MEMORANDUM, Assemb. 7946, 213th Sess. (1990), reprinted in NEW YORK STATE LEGISLATIVE ANNUAL 1990, at 456 [hereinafter GOVERNOR'S APPROVAL MEMORANDUM]. A worker who earned in excess of $600 per week would receive a maximum of $400 per week, despite the fact that two-thirds of his or her earnings would be in excess of $400. See GOVERNOR'S APPROVAL MEMORANDUM, supra.
(119) See WORKERS' COMP. [section] 15(6) (setting maximum benefit level at four hundred dollars per week for dates of accident after July 1, 1992).
(121) GOVERNOR'S BILL MEMORANDUM, supra note 116, at 455.
(122) GOVERNOR'S APPROVAL MEMORANDUM, supra note 118, at 456. Elsewhere in the country, states have had the foresight to build a mechanism in their workers' compensation schemes whereby benefit levels are automatically increased, at least annually, by tying maximum rates to the state's average weekly wage. See, e.g., IDAHO CODE ANN. [section] 72-409 (2012) (setting the maximum benefit level at ninety percent of the state's average weekly wage to be reassessed on or before the first of June every year); ME. REV. STAT. tit. 39-A, [section] 211 (2012) (setting the maximum benefit level at ninety percent of the state's average weekly wage to be reassessed yearly by the Department of Labor); UTAH CODE ANN. [section] 34A-2-410 (LexisNexis 2012) (setting the maximum benefit level at one hundred percent of the state's average weekly wage at the time of the injury, to be reassessed on or before the first of June every year).
(123) See WORKERS' COMP. [section] 15(6). Prior to the increase for the injured occurring in 1992, the maximum benefit level had remained untouched since 1983, when the benefit level was capped at $300 per week. GOVERNOR'S BILL MEMORANDUM, supra note 116, at 456.
(124) See infra Table 3. Other estimates have put the $400 benefit level at forty percent of New York's average weekly earnings. See Deal in Albany, supra note 11, at B6.
(125) See infra Table 3.
(126) See infra Table 3.
(127) Deal in Albany, supra note 11, at A1.
(128) See Components of Workers' Compensation Premium, N.Y. STATE INS. FUND, http://ww3.nysif.com/Workers_Compensation/Policyholders/About WC Premium_and_Billing /Components of WC Premium (last visited Oct. 14, 2012).
(129) The 2006 study, which the State of Oregon has conducted every two years since 1986, was used since it was the most recent study preceding the 2007 reforms. OR. DEP'T OF CONSUMER & BUS. SERV., OREGON WORKERS' COMPENSATION PREMIUM RATE RANKING: CALENDAR YEAR 2006, at 3 (2007) available at http://www.cbs.state.or.us/imd/rasums/2083/06web/06_2083.pdf.
(130) See infra Table 1.
(131) See infra Table 1.
(132) OR. DEP'T OF CONSUMER & BUS. SERV., supra note 129, at 4.
(133) See supra Table 1.
(134) See supra Table 1.
(135) Danny Hakim, Spitzer Speech Will Urge Fiscal Restraint, N.Y. TIMES, Jan. 3, 2007, at Ba.
(136) Id.; see also Greenhouse & Kleinfield, supra note 6, at A22 ("New York's system [is] ... among the most expensive for business and the stingiest to workers."); Deal in Albany, supra note 11, at A1 ("[T]he workers' compensation system in New York [is] an unfathomable mess, with insurance premiums that are among the nation's highest even while worker benefits are very low.").
(137) 2007 N.Y. Laws 54.
(138) GOVERNOR'S PROGRAM MEMORANDUM #9, Assemb. 6163, 230th Sess. (2007), reprinted in N.Y. STATE LEGISLATIVE ANNUAl, 2007, at 4-5 [hereinafter GOVERNOR'S MEMORANDUM #9].
(139) Id. at 5.
(140) 2007 N.Y. Laws 56; see also WORKERS' COMP. [section] 15 (providing specific compensation schedules). The initial benefit amount increases were set by statute; however, starting on July 1, 2010, the maximum benefit amount was tied to New York's average weekly wage. 2007 N.Y. Laws 56.
(141) 2007 N.Y. Laws 56; WORKERS' COMP. [section] 15(6).
(142) 2007 N.Y. Laws 56; WORKERS' COMP. [section] 15(6).
(143) 2007 N.Y. Laws 56: WORKERS' COMP. [section] 15(6).
(144) Robert E. Beloten, New Maximum Weekly Benefit Rate Effective July 1, 2010, N.Y STATE WORKERS' COMPENSATION BOARD, http://www.wcb.ny.gov/content/main/SubjectNos/sn046_416.jsp (last visited Oct. 13, 2012).
(145) Robert E. Beloten, New Maximum Weekly Benefit Rate Effective July 1, 2011, N.Y. STATE WORKERS' COMPENSATION BOARD, http://www.wcb.ny.gov/content/main/SubjectNos/sn046_465_465.jsp (last visited Oct. 13, 2012).
(146) Robert E. Beloten, New Maximum Weekly Benefit Rate Effective July 1, 2012, N.Y. STATE WORKERS' COMPENSATION BOARD, http://www.wcb.ny.gov/content/main/SubjectNos/sn046_481.jsp (last visited Oct. 13, 2012).
(147) See GOVERNOR'S MEMORANDUM #9, supra note 138, at 5.
(148) FISCAL POLICY INST., NEW YORK STATE WORKERS' COMPENSATION: HOW BIG IS THE COVERAGE SHORTFALL? 15 (2007), available at http://fiscalpolicy.org/new-york-state-workerscompensation-how-big-is-the-coverage-shortfall; see also Steven Greenhouse, Study Says Many Firms Cheat New York Workers' Comp System, N.Y. TIMES, Jan. 25, 2007, at B1 ("A new study estimates that employers cheat New York State's workers' compensation system by not paying $500 million to $1 billion a year in required insurance premiums, forcing other employers to pay higher premiums.").
(149) Coppelman, supra note 115.
(150) 2007 N.Y. Laws 63; WORKERS' COMP. [section] 141-b; see also Deal in Albany, supra note 11, at B6 ("To reduce fraud, the deal calls for prohibiting employers that cheat the system [by committing felony fraud] from receiving state and municipal contracts for five years.").
(151) 2007 N.Y. Laws 60; see also WORKERS' COMP. [section] 52(5) (indicating the current noncompliance penalty for employers is $2000).
(152) Press Release, Dep't of Fin. Servs., Superintendent Lawsky Reports on Latest Results of Drive to Save Businesses Money by Fighting Workers' Compensation Fraud (Dec. 9, 2011), available at http://www.dfs.ny.gov/about/press/prl 112091.htm.
(153) While not an exhaustive list, the following actions would fall under the purview of worker fraud: "deliberate injury, faked injury [by m]ultiple [or single c]laimants.... [f]abricated [t]reatment, [n]on-[w]ork [r]elated or [p]rior [i]njury.... [or m]isrepresentation of [w]age [l]oss." Richard A. Derrig, Insurance Fraud, 69 J. RISK & INS. 271, 274 (2002). A cursory database search reveals no shortage of factual scenarios dealing with worker fraud in New York State. See, e.g., Jordan v. Saratoga Cnty. Pub. Health Nurses, 846 N.Y.S.2d 409, 410 (App. Div. 3d Dep't 2007) ("Despite being specifically questioned concerning previous injuries ... [the injured worker] failed to inform any of the numerous medical professionals that she saw in connection with this injury that she had suffered from prior work-related injuries."); Clarke v. Lomasney Combustion, Inc., 809 N.Y.S.2d 633, 634 (App. Div. 3d Dep't 2006) ("Business records, tax documents and [injured worker]'s own admissions reveal that he was operating a delicatessen prior to his testimony at a hearing held in June 2001, at which he denied engaging in any kind of employment."); Dieter v. Trigen-Cinergy Solutions of Rochester, 787 N.Y.S.2d 499, 500 (App. Div. 3d Dep't 2005) ("[The injured worker] admitted that he informed the carrier that he had not returned to work since his injury when in fact he had."); Michaels v. Towne Ford, 780 N.Y.S.2d 234, 236 (App. Div. 3d Dep't 2004) ("The injured worker] refused to cooperate during the [independent medical] examination, stated that he could not move his neck, back or legs, walked with a slow gait while in the office and then, upon leaving the office, 'walked as well as anyone else walked,' entered his vehicle without a problem and turned his neck to back out of his parking spot.").
(154) Press Release, Dep't of Fin. Servs., supra note 152.
(156) See, e.g., Peter Kerr, Vast Amount of Fraud Discovered in Workers' Compensation System, N.Y. TIMES, Dec. 29, 1991, at 1.
(157) Deal in Albany, supra note 11, at A1.
(158) WORKERS' COMP. [section] 136 (permitting disclosure of information to various state fraud bureaus as an exception to general policy of non-disclosure by the inspector general). \
(159) GOVERNOR'S MEMORANDUM #9, supra note 138, at 6.
(160) 1945 N.Y. Laws 1982. The 2007 reforms enacted several protections for veterans, presumably in response to the closure of the Special Disability Fund. First, the reforms amended section 125, which was a relatively new provision to the workers' compensation statute, having been previously enacted by the legislature in 1991. 1991 N.Y. Laws 2936. Section 125 was added to combat "job discrimination against employees who have filed for or received compensation benefits." Id. The 2007 reforms added language that also made it unlawful to discriminate against an individual who was an injured veteran. 2007 N.Y. Laws 89-90; WORKERS' COMP. [section] 125. Further protections for veterans were added with the enactment of section 125-a. 2007 N.Y. Laws 90. The section made it a class A misdemeanor to knowingly and intentionally discriminate against a veterans who was injured during the court of his or her service because of veteran status or the injury. 2007 N.Y. Laws 90; WORKERS' COMP. [section] 125-a.
(161) WORKERS' COMP. [section] 15; see also Martin Minkowitz, Practice Commentaries, in WORKERS' COMP. [section] 15 ("[When] a worker has a permanent physical impairment from a prior accident or disease ... the statute ... [was] intended to provide an incentive to employers to hire such workers.").
(162) WORKERS' COMP. [section] 214.
(163) 2007 N.Y. Laws 95; N.Y. WORKERS' COMP. LAW [section] 15 (McKinney 2012).
(164) WAMO Frequently Asked Questions, N.Y. STATE WORKERS' COMPENSATION BOARD, http://www.wcb.ny.gov/WAMO_FAQs.pdf (last visited Sept. 3, 2012).
(165) Id.; N.Y. WORKERS' COMP. LAW [section] 32(e) (McKinney 2012).
(166) WAMO Frequently Asked Questions, supra note 164.
(167) See supra Part III.B. Since the loss amounts are a factor in premium calculations, it would be illogical to assume that paying out more money for workers' compensation claims would lead to realization of a premium reduction.
(168) Greenhouse & Kleinfeld, supra note 6, at A22; see also KAN. STAT. ANN. [section] 44-510f (2012) (capping the amount payable by an employer for an injury at $155,000).
(169) 2007 N.Y. Laws 57-58; N.Y. WORKERS' COMP. LAW [section] 15(3)(w) (McKinney 2012). Because labor leaders were concerned about certain workers losing their benefits after the durational caps tolled, certain workers could apply for cap extensions and cap exemptions. See Deal in Albany, supra note 11, at B6.
(170) See, e.g., Rick Karlin, When Reform Doesn't Reform, TIMES UNION (Albany), Nov. 8, 2011, at A1 ("[The reforms have] 'not worked out the way that many people on both sides of the equation had expected.... ").
(171) See infra Parts V.A, V.B.
(172) See 1913 N.Y. Laws 2285.
(173) See, e.g., FLA. STAT. [section] 440.12 (2012) (providing that the maximum payable benefit amount is equal to one hundred percent of Florida's average weekly wage); IDAHO CODE ANN. [section] 72-409 (2012) (subjecting the maximum benefit amount to a cap that is equivalent to ninety percent of the state's average weekly state wage); UTAH CODE ANN. [section] 34A-2-410 (LexisNexis 2012) (providing that the maximum weekly benefit amount is equal to one hundred percent of the state's average weekly wage); W. VA. CODE [section] 23-4-6 (2012) (capping the maximum benefit amount at one hundred percent of the average weekly wage of West Virginia).
(174) See infra Table 3. Only the District of Columbia had a higher average weekly wage at $1259.00 per week. See infra Table 3.
(175) See infra Table 3. Only Arizona and Mississippi had lower maximum benefit rates than New York, at $369.23 and $364.57 respectively. See infra Table 3.
(176) See infra Table 3. By way of comparison, the average discrepancy between average weekly wage and maximum benefit rate was $50.94, while the median was $39.00 (Connecticut). See infra Table 3.
(177) See infra Table 3. The median was Pennsylvania, where the maximum benefit level in 2006 of $745.00 represented 94.42% of the state's average weekly wage of $789.00. See infra Table 3.
(178) See infra Table 3.
(179) See infra Table 3.
(180) The median was Minnesota, where the maximum benefit level of $850.00 represented 104.05% of the state's average weekly wage of $816.88. See infra Table 3.
(181) See infra Table 3.
(182) Unless otherwise indicated, the 2006 maximum benefit rate was compiled from the Social Security Administration. DI 52150.045 Chart of States' Maximum Workers" Compensation (WC) Benefits, SOC. SEa. ADMIN. (last updated Jul. 23, 2012), https://secure.ssa.gov/poms.nsf/lnx/0452150045 [hereinafter SOC. SEC. ADMIN.]. Please note, in those states where the maximum benefit level was increased during 2006, the highest amount is presented here.
(183) The numbers presented in this column were computed based on information compiled from the United States Department of Labor, Bureau of Labor Statistics Website. BUREAU OF LABOR STATISTICS, U.S. DEP'T OF LABOR, EMPLOYMENT AND WAGES, ANNUAL AVERAGES 2006, tbl. 6 (Apr. 3, 2008), http://www.bls.gov/cew/ew06table6.pdf. This figure is presented for comparison purposes only and will likely vary from the figure that the individual state uses when setting the maximum benefit rate for workers' compensation. See, e.g., IOWA CODE [section] 85.37 (2012) (capping the weekly benefit amount at 66.6% of the state's average weekly wage as determined by Iowa's Department of Workforce Development); ME. REV. STAT. tit. 39-A, [section] 211 (2012) (capping maximum weekly benefit amount at 90% of the state's average weekly wage as determined by Maine's Department of Labor); VA. CODE ANN. [section] 65.2-500(B) (2012) (providing that Virginia's average weekly wage will be determined by the Virginia Employment Commission pursuant to the statutorily described formula).
(184) Unless otherwise indicated, the 2011 maximum benefit rate was compiled from the Social Security Administration. SOC. SEC. ADMIN., supra note 182. In those states where the maximum benefit level was increased during 2011, the highest amount is presented here.
(185) The numbers presented in this column were computed based on information compiled from the United States Department of Labor, Bureau of Labor Statistics Website. BUREAU OF LABOR STATISTICS, U.S. DEP'T OF LABOR, HOURS AND EARNINGS, ANNUAL AVERAGES 2011 1, tbl. 4, http://www.bls.gov/sae/eetables/sae_annavg411.pdf (last visited Oct. 13, 2012).
(186) The maximum benefit rate in the state of Connecticut in 2011 varied depending on when the on-the-job injury occurred. While it is $1168.00 for dates of injury that are in or after July of 1993, it is $1,494.00 for dates of injury between October 1987 and June of 1993. SOC. SEe. ADMIN., supra note 182; see also Weekly Benefit Tables for October 1, 2011-September 30, 2012, STATE OF CONN., WORKERS' COMPENSATION COMMISSION, http://wcc.state.ct.us/download/acrobat/Benefit-Rate-Table.2011.2012.pdf (last visited Oct. 13, 2012) (indicating the maximum weekly compensation benefit from October 1, 2011 through September 30, 2012 was $1168.00).
(187) The maximum benefit rate in the State of Maine varies depending on the date of the on-the-job injury occurred. The amounts provided here are applicable to injuries that occurred in or after January 1993. SOC. SEC. ADMIN., supra note 182.
(188) Robert E. Beloten, New Maximum Weekly Benefit Rate Effective July 1, 2011, N.Y. STATE WORKERS' COMPENSATION BOARD (May 4, 2011), http://www.wcb.ny.gov/content/main/SubjectNos/sn046_465.jsp.
(189) The maximum benefit rate in the State of Vermont varies depending on date of the on-the-job injury occurred. The amounts provided here are applicable to injuries that occurred on or after July 1, 1986. Rule 16--Minimum and Maximum Compensation Rates--Annual Change, DEP'T OF LABOR, STATE OF VT., http://labor.vermont.gov/Rule16HistoricalWageRates/tabid/362/Default'aspx (last visited Oct. 14, 2012).
(190) See sources cited supra note 173.
(191) See GOVERNOR'S MEMORANDUM #9, supra note 138, at 5.
(192) See supra Table 3.
(193) See supra Table 3.
(194) See infra Table 4.
(195) OR. DEP'T OF CONSUMER & BUS. SERVICES, OREGON WORKERS' COMPENSATION PREMIUM RATE RANKING: CALENDAR YEAR 2006, at 4 (2007), available at http://www.cbs.state.or.us/imd/rasums/2083/06web/06_2083.pdf.
(196) OR. DEP'T OF CONSUMER & BUS. SERVICES, OREGON WORKERS' COMPENSATION PREMIUM RATE RANKING: CALENDAR YEAR 2010, at 4 (2011), available at http://www.cbs.state.or.us/imd/rasums/2083/10web/10_2083.pdf.
(197) See supra Table 4 (noting that only Illinois, South Dakota, Michigan, Iowa, Georgia, Wisconsin, and New Jersey realized rate increases between 2006 and 2010).
(198) See supra Table 4.
(199) See supra Table 4.
(200) A basic tenet of insurance law is that when fewer claims are filed, lower premium rates result and premium rates for workers' compensation insurance is certainly not an exception. See generally Components of Workers' Compensation Premium, supra note 128 (noting that when calculating a workers' compensation premium in New York State, a credit or surcharge is given depending on the prior number of claims filed and this amount is multiplied or credited depending on the actual versus expected number of injuries).
(201) JIM DAVIS & YAIR BAR-CHAIM, WORKERS COMPENSATION CLAIM FREQUENCY 1 (2011), available at https://www.ncci.com/documents/2011_Claim_Freq_Research.pdf.
(202) See id. at 3. This hypothesis has been echoed by other agencies as well. See generally ISHITA SENGUPTA ET AL., WORKERS' COMPENSATION: BENEFITS, COVERAGE, AND COSTS, 2009, at 5 (2011), available at http://www.nasi.org/sitesldefault/files/research/Workers_Comp_Report_2009.pdf ("The decline in employer costs reflects the overall decline in employment in 2009."). On the other side, in periods of economic improvement, those workers who are both inexperienced and accident-prone make up a larger portion of the workforce, resulting in more accident and workers' compensation claims. Leslie I. Boden & John W. Ruser, Workers' Compensation "Reforms," Choice of Medical Care Provider, and Reported Workplace Injuries, 85 REV. ECON. & STAT. 923, 926 (2003).
(203) DAVIS & BAR-CHAIM, supra note 201, at 21. Nationally, in the five years prior to 2007, "average weekly hours remained relatively stable." Id. at 20.
(204) Id. at 5.
(205) N.Y. STATE WORKERS' COMP. BD., 2010 ANNUAl, REPORT, at A-3 (2011), available at http://www.wcb.ny.gov/content/main/TheBoard]2010AnnualReport.pdf. The claims assembled in 2008 and 2009 were 128,342 and 119,122 respectively. Id. In contrast, in the four years prior, the lowest number of claims assembled was 140,109 in 2006. Id.
(206) DAVIS & BAR-CHAIM, supra note 201, at 5.
(207) N.Y. STATE WORKERS' COMP. BD., supra note 205, at A-3. In 2010, 122,062 new claims were assembled, an increase of 2940 new claims from the previous calendar year. Id.
(208) DAVIS & BAR-CHAIM, supra note 201, at 2-3.
(209) See Deal in Albany, supra note 11, at A1, B6; Kleinfield & Greenhouse, supra note 6, at A22.
(210) Karlin, supra note 170, at A1, A7; see also Press Release, Bus. Council of N.Y. State, Don't Make New York's Already Expensive Workers' Comp System More Expensive (June 14, 2012), available at http://www.bcnys.org/whatsnew/2012/061412dont-make-new-yorksworkers-comp-more-expensive.html ("Workers' Compensation rates continued to rise in New York.").
(211) See, e.g., Press Release, N.Y. State Dep't of Fin. Servs., Governor Cuomo Announces First Reduction in Workers' Compensation Rates Since 2008 (July 17, 2012), available at http://www.dfs.ny.gov/about/press/pr1207171.htm ("[W]orkers' compensation rates will ... decrease in the upcoming policy year."). Although the New York Compensation Insurance Rating Board requested a rate increase to manual loss costs of 11.8%, New York's Department of Financial Services found that it was "clear" that the request should be denied. Workers' Comp. Ins. Loss Cost Application of the N.Y. Comp. Ins. Rating Bd., at 1, 4 (N.Y. State Dep't of Fin. Servs. July 16, 2012) (op. & decision), available at http://www.dfs.ny.gov/insurance/hearing/wc_06252012/wc_06252012_Opinion_Decision.pdf.
(212) See generally Dean J. Haas, Falling Down on the Job: Workers' Compensation Shifts From a No-Fault to a Worker-Fault Paradigm, 79 N.D.L. REV., 203, 206-07 n.17 (2003) (noting that low benefit rates translate into low premium rates). Nationally, when workers' compensation premium rates reached "crisis levels" in the late 1980s, states reacted by restricting and reducing benefit levels into the mid-1990s. McCluskey, supra note 4, at 684-90, 705, 710-11. Thereafter, the reduced benefit rates resulted in lower employer premium rates. Id. at 710-11.
(213) See id. at 685-88 ("[R]ising benefit costs contribute significantly to employers' rising [premium] costs.").
(214) See id. at 710-11.
(215) See id. at 685-88.
(216) See, e.g., Richard J. Butler, Wage and Injury Rate Response to Shifting Levels of Workers" Compensation, in SAFETY AND THE WORK FORCE: INCENTIVES AND DISINCENTIVES IN WORKERS' COMPENSATION 62 (John D. Worrall ed., 1983) (reporting a positive relationship between benefit levels and claims based on empirical research); Frank Neuhauser & Steven Raphael, The Effect of an Increase in Worker's Compensation Benefits on the Duration and Frequency of Benefit Receipt, 86 REV. ECON. & STAT. 288, 288 (2004) (noting a line of studies which have found an increased probability that a worker will file a workers' compensation claim when benefits have been increased); see also Alan B. Krueger, Incentive Effects of Workers' Compensation Insurance, 41 J. PUB. ECON. 73, 80 (1990) ("The decision to file an injury report will be influenced by the generosity of workers' compensation benefits."); John W. Ruser, Workers' Compensation Insurance, Experience-Rating, and Occupational Injuries, 16 RAND J. ECON. 487, 487, 501 (1985) (listing several studies which conclude that there is a positive relationship between benefits and claims).
(217) Emily A. Spieler, Perpetuating Risk? Workers' Compensation and the Persistence of Occupational Injuries, 31 HOUS. L. REV. 119, 260 (1994). Prior to the reforms, Oregon had the sixth-highest employer premium rate in the nation. Id. at 260 n.534. Indeed, the State of Oregon ranked as having one of the lowest employer premiums in the nation in 2006 and in 2010. See supra Table 4.
(218) Spieler, supra note 217, at 260-61. See, e.g., OR. REV. STAT. [section] 654.191(1) (2012) (establishing a grant program to help develop education and training programs for employees that deal with workplace safety); OR. REV. STAT. [section] 654.176 (2012) (requiring public and private employers to establish safety committees).
(219) Spieler, supra note 217, at 261-62. See, e.g., OR. REV. STAT. [section] 656.802(3) (2012) (restricting the compensability of mental stress claims to only those claims which arise out of real and objective employment conditions as established by clear and convincing evidence); OR. REV. STAT. [section] 656.005(7) (2012) (eliminating coverage for diseases caused by a combination of work and non-work-related hazards).
Table 3: Maximum Weekly Benefit Rates vs. Average Weekly Wage by State (2006 vs. 2011) 2006 Maximum 2006 Benefit Average Rate (per Weekly State week) (182) Wage (183) Alabama $651.00 $683.00 Alaska $875.00 $780.00 Arizona $369.23 $760.00 Arkansas $488.00 $612.00 California $840.00 $919.00 Colorado $719.74 $840.00 Connecticut $1,038.00 $1,077.00 Delaware $571.64 $890.00 District of Columbia $1,155.84 $1,259.00 Florida $683.00 $727.00 Georgia $450.00 $785.00 Hawaii $654.00 $691.00 Idaho $508.50 $623.00 Illinois $1,120.87 $882.00 Indiana $600.00 $704.00 Iowa $1,264.00 $652.00 Kansas $483.00 $696.00 Kentucky $631.22 $672.00 Louisiana $478.00 $709.00 Maine (187) $555.34 $638.00 Maryland $801.00 $856.00 Massachusetts $1,000.43 $1,016.00 Michigan $706.00 $807.00 Minnesota $750.00 $814.00 Mississippi $364.57 $589.00 Missouri $718.87 $719.00 Montana $545.00 $565.00 Nebraska $600.00 $643.00 Nevada $721.84 $752.00 New Hampshire $1,153.50 $827.00 New Jersey $691.00 $988.00 New Mexico $585.89 $642.00 New York $400.00 $1,095.00 North Carolina $730.00 $717.00 North Dakota $624.00 $597.00 Ohio $704.40 $733.00 Oklahoma $577.00 $656.00 Oregon $721.43 $725.00 Pennsylvania $745.00 $789.00 Rhode Island $845.00 $745.00 South Carolina $616.48 $649.00 South Dakota $550.00 $574.00 Tennessee $750.00 $723.00 Texas $674.00 $832.00 Utah $631.00 $668.00 Vermont (189) $974.00 $672.00 Virginia $773.00 $840.00 Washington $942.34 $817.00 West Virginia $587.35 $615.00 Wisconsin $744.00 $701.00 Wyoming $678.00 $698.00 2011 Maximum 2011 Benefit Average Rate (per Weekly State week) (184) Wage (185) Alabama $755.00 $710.08 Alaska $1,062.00 $873.39 Arizona $603.19 $790.24 Arkansas $575.00 $643.21 California $986.69 $925.86 Colorado $828.03 $827.03 Connecticut $1,168.00 (186) $957.43 Delaware $622.05 $738.50 District of Columbia $1,355.00 $1,257.15 Florida $782.00 $747.10 Georgia $500.00 $757.45 Hawaii $731.00 $738.31 Idaho $581.40 $703.99 Illinois $1,261.41 $815.01 Indiana $650.00 $722.28 Iowa $1,457.00 $687.10 Kansas $555.00 $706.99 Kentucky $721.97 $692.58 Louisiana $592.00 $748.36 Maine (187) $634.13 $678.01 Maryland $940.00 $887.11 Massachusetts $1,135.82 $914.07 Michigan $742.00 $763.91 Minnesota $850.00 $816.88 Mississippi $427.20 $652.10 Missouri $811.73 $721.73 Montana $649.00 $681.30 Nebraska $698.00 $711.04 Nevada $789.74 $665.86 New Hampshire $1,317.00 $762.66 New Jersey $792.00 $869.50 New Mexico $699.01 $690.95 New York $772.96 (168) $903.30 North Carolina $836.00 $716.12 North Dakota 719.00 $730.13 Ohio $783.00 $710.70 Oklahoma $735.00 $721.67 Oregon $842.52 $735.19 Pennsylvania $858.00 $731.49 Rhode Island $972.00 $784.17 South Carolina $689.71 $715.49 South Dakota $648.00 $646.45 Tennessee $867.90 $710.39 Texas $787.47 $807.68 Utah $747.00 $808.54 Vermont (189) $1,122.00 $776.80 Virginia $905.00 $873.33 Washington $1,123.78 $941.53 West Virginia $711.38 $654.16 Wisconsin $820.00 $723.74 Wyoming $872.00 $800.57…