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After his second debilitating injury at work, Derrick Baker decided it was time to retire.
Baker had worked in juvenile detention for 29 years, most recently as a supervisor at Crossroads, one of two New York City–run centers troubled by routine violence and workforce injuries. In November 2022, he tore the tendons and cartilage in both of his arms and reinjured a knee that had undergone joint replacement when he intervened in a scuffle with an incarcerated youth.
Within a day, Baker filed a claim for workers’
compensation, the state program that provides medical treatment for
injuries on the job and cash for recovery time. But to get his benefits,
Baker first had to get a workers’ comp insurance provider to accept his
case.
Unbeknownst to him, he was stuck with the insurance carrier
that had amassed more penalties for mishandled and delayed cases than
any other in the state: the city of New York.
“They were dragging stuff out,” Baker said. “And when it finally went through, they contest everything.”
If you’re a payroll employee in New York state, your
employer is probably required to pay for a workers’ comp insurance
policy. Some, like New York City, operate their own “self-insurance”
system.
Insurers are supposed to start making workers’ comp payments within 18 days of the injury. In Baker’s case, it took New York City nearly four months.
The state Workers’ Compensation Board has cited the New
York City Law Department, which runs the city’s insurance program, for
legal infractions over 10,000 times each year since the pandemic.
From 2019 through 2023, it received three penalties for
every four new workers’ comp cases it processed. Those included over
34,000 penalties for late filings and nearly 29,000 for other procedural
violations like failing to properly pay claimants.
“They are late with almost every request and document,”
said Derek Robinson, the legal services vice president of SSEU Local
371. “It significantly delays claimants’ payments and treatments.”
Workers’ compensation is a form of social insurance that provides wage replacement and medical benefits to workers who are injured on the job or experience an occupation-related disease. Part safety net for workers, part liability insurance for employers, workers’ compensation laws in the US came about on a state-by-state basis in the early 20th century as part of a bargain between business and labor, shielding employers from lawsuits in exchange for creating a benefit program. The law varies state to state, but generally gives injured or sick workers weekly payments in place of wages and the coverage of medical expenses.
New York was the first state in the country to enact a form of workers’ compensation in 1910. A court struck it down the following year. A day after the law was revoked, the Triangle Shirtwaist Fire killed 146 garment workers in Greenwich Village, galvanizing labor activists who pushed the state legislature to change the constitution to allow for a workers’ compensation law. In the years after it was enacted, state courts established a firm, liberal interpretation of the law that favored labor protections, but since the 1990s, administrative reforms have tipped the scales toward employers by adding more and more administrative challenges for workers trying to access their benefits.
For comparison, the New York State Insurance Fund, the state-managed workers’ comp insurer that covers 2 million employees — around seven times the size of New York City’s public sector workforce — received less than half as many procedural complaints.
A spokesperson for the Law Department noted that it offers workers claiming injuries a program called salary continuation, which allows employees to use their vacation and sick days to continue getting paid while the city investigates a case. As a result, 80 percent of workers receive “timely initial payments,” the spokesperson said. The city is supposed to reimburse the time off after the fact, though workers and attorneys say that often doesn’t happen fully.
For around a month and a half, Baker said, his salary was covered by a grant that the city offers exclusively to the victims of a workplace assault. But for about two months after that ran out, he was left without any income and unable to get the city’s insurer to return his calls.
“They put you through the ringer. They pretty much ignore you and make it seem like you’re bugging them,” he said.
Once Baker got his back pay and realized that his payments of around $400 per week were not going to cover his financial needs, he decided to return to work and risk reinjuring himself for the eight months it took him to reach early retirement.
“They want you to come here and give your all, and they don’t give a damn about you once you get injured. You’re no good to them,” Baker said.
Lawyers expect that even more workers’ comp cases could be mishandled as the result of a recent statewide policy change that tightened the timeframe for workers’ comp insurance carriers on lost wages payments.
The Law Department conceded that “staffing remains a challenge as we process this huge volume of claims under worker compensation rules that have grown exponentially more complex over the last decade.”
After Baker’s doctor recommended surgery on both of his shoulders, the Law Department disputed the procedure on his right side. He’s in the process of appealing the clashing diagnosis by an independent medical examiner — one of the insurance-hired medical practitioners who scrutinize workers’ compensation claims.
“I’m used to that,” he said, referring to a prior workers’ compensation case he had to file in 2003 that resulted in two knee replacement surgeries as a result of a similar workplace incident.
“It took 13 years for me to get my replacement,” Baker said.
Incentives of the Insurance-Boss
New York City’s sluggish response times stem from a
stagnant Law Department budget that has overburdened its staff
attorneys. Worker-side lawyers say that the agency’s staff often
effectively work as both attorneys and paralegals on cases. They lack
relevant information before hearings, causing them to request extensions
or make mistakes.
The agency often misses the deadline to approve or reject
an application. When it does approve a case, it’s then often late to pay
back the lost wages.
“At times they don’t send my check and I have to inform my attorneys,” an ACS worker testified to the state Senate. “I was employed by the city of New York since 1985 and I have never experienced such indignation.”
The gaps can spell financial crisis for workers.
“I see that with a lot of people who have horror stories,
where they’ve been waiting for months and never got paid, and they’re in
a situation where they have to borrow money, take a loan,” another
retired ACS worker, who asked not to use their name, told New York
Focus.
The state fines insurers for breaking the 18-day timeline — but it’s effectively a slap on the wrist. It costs carriers $50 for each 10-day period that a transaction or requested filing is late.
“The Law Department, they’re a different animal. I mean,
they really could care less what the board tells them to do or not to
do,” Alex Rosado, a workers’ comp attorney with a number of
city-employed clients and the co-chair of the New York Workers’
Compensation Alliance.
City workers face a different set of issues in accessing
the other core function of workers’ comp, which guarantees medical
treatment for on-the-job injuries. When they seek to get medical
procedures approved, lawyers report that deadlines are consistently
unmet or extended for almost every step of the process.
“I was employed by the city of New York since 1985 and I have never experienced such indignation.”
—-Former ACS worker
The problems may arise in part from the structure of self-insurance. Unlike worker benefits such as unemployment insurance, workers’ comp payments come directly out of the employer’s pocket. When the boss is also the insurance carrier, hurdles to accessing benefits lower company costs.
“Self-insured [carriers] by nature are more inclined to dispute claims simply because it’s directly their money,” said Rosado.
In general, lawyers say, the cost-saving incentive can lead self-insured employers to contest or delay more cases than private insurance companies.
In 2009, the state’s 9/11 Worker Protection Task Force found that New York City appealed World Trade Center recovery and cleanup cases at a higher rate than the private sector or the city’s police, fire, and sanitation departments, which are covered by separate carriers.
But according to Rosado, the Law Department isn’t unusually aggressive in formally contesting cases — perhaps because they don’t have the resources to be.
“I don’t think they have the sufficient personnel to dispute these cases to a large extent. So they cherry pick what they’re going to dispute,” Rosado said.
Indexing Wars
In July, the Workers’ Compensation Board updated
a process it refers to as “indexing” cases, a step that starts the
countdown to the insurance company’s deadline to accept or dispute a
claim. Starting in the 2000s, the state Workers’ Compensation Board
protracted this process so that claims could sit in limbo while insurers
gathered extra information.
Now, insurance companies will have an automatic deadline to pay out wages.
Worker-side attorneys argued that for workers without a
lawyer, the old system largely amounted to a flat denial of these
benefits. That system required injured or sick workers to actively push
their cases forward, so if you didn’t know how to navigate the byzantine
legal system, your case was unlikely to reach the finish line.
The change got through despite Governor Kathy Hochul’s
opposition. Last year, advocates with the Workers’ Compensation Alliance
drafted a bill that would have required the board to automatically
index all cases and guarantee a hearing to workers who ask for one.
After passing the legislature, it was vetoed by the governor at the behest
of self-insurers, workers’ comp insurance lobbyists, and the Workers’
Compensation Board itself. The change in indexing ultimately came after a
lawsuit resulted in the state’s top court ordering the board to
reconsider the process.
While the new policy will lighten the burden for workers,
lawyers expect it could exacerbate the Law Department’s rate of late
penalties.
“Having dealt with the city for 25 years and coming to
understand that the city lacks resources in examiners etc., it is
reasonable to assume that the increase in indexing of cases will
translate into an increase in the number of penalties,” Rosado said.