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

BILL NUMBER:A2021B

Title of bill

An act to amend the workers' compensation law, in relation to the payment of compensation

Purpose or general idea of bill

This bill would change the payment structure to injured workers for permanent partial disability from incremental payments to one lump sum.

Section 1 of the bill amends section 25(1)(b) of the Workers' Compen- sation Law to require that an award of compensation for permanent partial disability may be payable in one lump sum if requested by the worker.

Section 2 of the bill amends section 15(3)(u) of the Workers' compen- sation Law to require that a total or partial loss of use of more than one member or parts of members may be fully payable in one lump sum if requested by the worker.

Justification

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

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

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

Prior legislative history

2008: A.10879 Reported to Ways and Means

Fiscal implications

To be determined.

Effective date

The act would take effect immediately.