A surcharge added to workers’ compensation costs for all New York State employers remain the nation’s highest, according to a new report.
It is nearly five times the average of the same surcharge imposed in other states, according to the annual study conducted by the Workers’ Compensation Policy Institute, based in Latham, N.Y.
New York’s 18.8 percent surcharge is more than double the 8.3 percent tax in Minnesota — the state with the second highest surcharge, the Institute says.
These surcharges, called assessments, are essentially a tax on workers’ compensation premiums and are used by state governments to fund the system. Thirty-two states impose this premium tax with an average assessment of 3.8 percent.
The 2007 Workers’ Compensation Reform Act attempted to reduce the burden on New York employers, according to the Institute. However, in the last three years, New York State has increased this tax by 10.4 percent, increased it by 27.5 percent, and decreased it by 6.9 percent, respectively. While assessments in New York decreased by 6.9 percent in 2012, assessments nationwide were actually down by an average of 9.5 percent.
“This tax continues to burden all employers — and municipal employers feel this mandate intensely as they continue to struggle to provide essential services and contain taxes,” says Paul Jahn, the Institute’s executive director. “This pressure was recently intensified by the 2 percent property tax cap.”
The Institute says local governments expected some relief from the burden of assessments through the Workers’ Compensation Reform Act of 2007. Prior to passing the reform act of 2007, assessments stood at 18.6 percent of premium. Since then, New Yorkers were charged 15.5 percent, 13.4 percent, 14.2 percent, 18.1 percent and 20.2 percent.
This year’s 18.8 percent assessment is the second-highest New York has seen since undertaking reform.
The Institute’s new analysis shows that assessments are continuing to be a larger part of increasing costs, and employers pay nearly 50 percent more of their compensation dollars in assessments to fund the system than they did four years ago.
The full report can be found on the Workers’ Compensation Policy Institute’s website.
Was this article valuable?
Here are more articles you may enjoy.