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New York Workers' Compensation: No Employer Repayment For Concurrent-Job Benefits

Doing business in New York is more expensive for employers and their workers’ compensation insurers because of a 2007 change in state workers’ compensation law. Thomas v. Warren County DPW, a recent New York state court decision, interpreted that amendment.

Thomas confirms a series of judicial opinions holding that employers (or their workers’ comp insurance carriers) may no longer be reimbursed out of a public fund for those portions of higher workers’ compensation benefits paid out to employees for wages lost from second jobs they held when they were injured.

The Bargain

Workers’ compensation is often referred to as a bargain between employers and employees wherein the employers agree to take on financial responsibility for work-related injuries and illnesses even if the mishaps were not their fault, in exchange for employees giving up the right to sue them for the work-related harm. In New York, two key parts of workers’ compensation benefits are wage replacement and medical care.

For wage replacement, benefits are normally paid out based on a formula tied to the “average weekly wage” – referred to popularly as the AWW – that the worker was earning before his or her injury.

Concurrent Employment

The situation becomes more complex when an injured employee has more than one job and the injury – related to the first job – keeps him or her from working at either position. The injury from one job, therefore, causes the employee to lose wages from both jobs. New York law provides that when an employee “is concurrently engaged in more than one employment at the time of injury,” the employer “in whose employment the employee was injured” must cover all medical costs, as it would have had to do regardless of how many other jobs the worker held.

For the wage replacement part of the benefit, however, that same employer is responsible to pay the AWW, but the additional wage amount from the second (or third or more) job must be included in the calculation. After all, wages from the concurrently held employment are also relied upon by the worker and his or her family, and that income is also impacted by the injury. For the higher AWW to be required, however, the concurrent job must be one also covered by the workers’ compensation system.

The Special Disability Fund

Historically, New York law provided that the original employer responsible for the higher AWW because of the concurrent job could be reimbursed for the added difference from a state Special Disability Fund (SDF). The SDF is funded by workers’ compensation insurance carriers for several different purposes, is administered by the state Workers’ Compensation Board and is overseen by the New York Commissioner of Taxation and Finance.

2007 Changes

The state legislature in 2007 made a major policy change by amending the provision that allowed employers to be reimbursed from the SDF in concurrent employment situations. The new law says that employers or their insurers may not request SDF monies for extra AWW paid out for concurrent jobs for work-related injuries or sickness incurred on or after July 1, 2007.

Court Challenges

Almost as if employers are unable to believe this change has really happened, they have appealed the issue to state court several times. In the Thomas case, the New York Supreme Court, Appellate Division, Third Department, decided against the employer on this issue on January 19, 2012. William Thomas was a light equipment operator for the Warren County Department of Public Works when he was injured on the job in 2009. At that time he also had a second job at a janitorial service. After Thomas filed for workers’ compensation, the Warren County DPW was ordered to pay him an amount based on an AWW from both jobs.

The employer appealed this decision of the state Workers’ Compensation Board. The DPW’s main argument was that since it could no longer get reimbursed from the SDF, it did not have to pay the incrementally higher part of the AWW from the second job. The court firmly responded that the amendment did not remove the responsibility of an employer affiliated with a work injury from paying a higher AWW because of a covered concurrent job. However, the change in the law “closed the Fund to new claims after July 1, 2007.” The court said that to hold otherwise would “subvert the purpose” of the law and “ignore the plain language” of the amendment.

Bottom Line

When the legislature took away the reimbursement, it did not take away the responsibility for the higher payment. In essence, an employer in this situation (or its insurance company) will have to absorb this cost going forward. If you are injured or become ill from work and have another job, be sure to discuss your rights with an experienced workers’ compensation attorney.


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