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Updated Sunday, August 11, 2013 -- 9:07 am EDT

Transportation Industry Fair Play Act

(New York State Legaslative Memo)

The New York State Commercial Goods Transportation Industry Fair Play Act sets up an unrealistic presumption of employment in the commercial goods transportation industry, calls for independent contractor tests far beyond those currently used or needed, and provides no findings of misclassification abuse in the transportation industry to justify this bill. The Business Council opposes its enactment.

Independent contractors, also known as “owner-operators,” have been an essential part of the trucking industry for years. Over many decades, the independent contractor status of those individuals has been repeatedly recognized and affirmed in numerous legal proceedings under various independent contractor legal standards. This bill, if enacted, would set up a new, comprehensive and unnecessary set of independent contractor tests far beyond those currently used or needed. At best, it would discourage thousands of these small business owners from conducting business in New York State.

Independent contractors choose to run their independent businesses for reasons that include freedom & independence, control over their time and business decisions, and financial gain. This legislation would work counter to the owner-operator’s interests to control their own business decisions, schedules and financial plans by pressuring them to sacrifice their independence and work as employees if they wish to remain in the transportation industry in New York State.

There is no justification for this proposal. The Cornell study citing misclassification abuses targeted the construction industry; transportation was only mentioned in two footnotes in the report yet this bill uses the report as its basis.

As we work toward improvement of the state’s economy and the creation of jobs lost in the last several years, the Legislature needs to send loud and clear positive messages to businesses in and out of the state. Enactment of this bill sends no such message. In fact, it sends the all too familiar message that the New York State Legislature stands ready to find new and different ways to interfere with business and worsen the business climate in New York State.

For these reasons, The Business Council opposes this legislation and respectfully urges that it not be enacted by the New York State Legislature


Updated Friday, August 30, 2013 -- 9:07 am EDT

Extends the Loss Cost Provisions for Workers' Compensation Rate Service Organizations

From June 2, 2013 until June 2, 2018

(Notice: New York State Business Council Announcement)

The Business Council supports this bill that, among other things, would extend the time in which a rate service organization (RSO) may file loss costs or other statistical information, including rating plans, with the Department of Financial Services from June 2, 2013 to June 2, 2018. This extension of the Compensation Insurance Rating Board (CIRB) reform law, passed in 2008, continues the loss cost model for the setting of workers' compensation insurance rates in New York State.

Under the law, CIRB submits industry-wide underwriting costs and losses for carriers, which serve as the basis for company-specific rate proposals. Using the loss cost approach, each commercial carrier proposes its own rate changes to the Department of Financial Services based on company specific administrative (non-underwriting) costs, giving employers the ability to shop around for lower priced carriers.

This bill would permit RSOs to continue to file loss costs and other statistical information, including rating plans, with DFS until June 2, 2018. Since the enactment of the 2008 legislation, it has become clear that the data collection and analysis services provided by RSOs, such as CIRB, are vital and essential to the health of New York's workers' compensation insurance market. Ending the collection of industry-wide data and the calculation of loss costs in New York workers' compensation market could have significant negative effects on insurer solvency, insurance availability and competition.

Additionally, the bill would extend the requirement that RSOs have public members as part of their board of governors and underwriting and actuarial committees, address the issues of vacancies in the membership of an RSO's governing body and provide for the temporary continuation in office of an incumbent appointee whose term has expired until a new appointment is made and approved. The preservation of the loss cost model structure is important to the maintenance of New York’s workers’ compensation insurance system.

For these reasons, The Business Council supports approval of S.6978.


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