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Alternative Dispute Resolution Proposed Rules


Regulatory Impact Statement for 12 NYCRR 314

  1. Statutory Authority:
    The Workers' Compensation Board (Board) is authorized to amend 12 NYCRR Part 314. Workers' Compensation Law (WCL) § 117(1) authorizes the Chair of the Board to make reasonable regulations consistent with the provisions of the WCL and the Labor Law. WCL § 141 authorizes the Chair to make administrative regulations providing in part for the receipt, indexing and examining of all notices, claims and reports. WCL § 25(2-c)(a) provides that for the purposes of employments classified under Sections 220, 240, and 241 of the Labor Law, an employer and a recognized or certified exclusive bargaining representative of its employees may include within their collective bargaining agreement provisions to establish an alternative dispute resolution system to resolve any claims arising under this chapter.
  2. Legislative Objective:
    By Chapter 491 of the Laws of 1995 and extended until December 30, 2005 (Chap. 464 of the Laws of 1999) the legislature amended Workers' Compensation Law §25 to permit, by negotiated labor agreement, a non- WCB arbitration and/or mediation claim process for employers and employees in the unionized construction industry. As a result, there are now four operating workers' compensation alternative dispute resolution ("ADR") programs in New York State. The proposed rule would amend one provision of the regulations adopted in 1996 to implement Chapter 491 regarding the time period for which a report of injury is submitted to the Board and would add a new section to the regulations dealing with Board approval or adjudication of certain issues not subject to WCL § 25(2- c).
  3. Needs and Benefits:
    Workers' Compensation Law §110(2) requires a non-ADR employer to file an accident report with the Board within ten (10) days of the date of accident. Presently, 12 NYCRR §314.2(d) (5) requires an ADR employer to file an injury report within thirty (30) days of an accident. The requested regulation modification will reduce the amount of time for an ADR employer to file an injury report from thirty (30) days to ten (10) days and will make the ADR employer's time to file an injury report the same as is statutorily required for non- ADR employers. This portion of the rule is consistent with the legislature's objective of promoting the prompt resolution of workers' compensation claims.

    It is important for ADR-1s to be filed promptly and at the same time as C-2 accident reports so the Board can quickly identify and separate ADR cases from traditional WCB claim processes. The ADR-1 is the initial and primary indicator that a particular claim is an ADR claim and needs to be segregated from non-ADR workers' compensation claim processing. In the absence of an ADR-1, Board personnel might assume a case is a "regular" compensation case and process the case accordingly. This can result in an ADR case being adjudicated by the Board in the traditional fashion, which defeats the purpose of the alternative dispute resolution process and may cause additional, unnecessary work for corrective action.

    A uniform accident report filing date will generate consistency in accident report filing requirements and will assist the Board in accurately and promptly identifying ADR cases for segregation from customary WCB adjudication processes. Additionally, a uniform rule will reduce potential confusion amongst employers as to when accident reports need to be filed with the Board.

    WCL § 25(2-c) allows employers and employee representatives covered by the statute to establish an alternative dispute resolution system to resolve claims under the WCL. However, there are some issues that may arise within these claims that are outside the scope of WCL § 25(2-c). These issues can include Section 32 settlement agreements involving non-ADR employers, and situations where an ADR employer is seeking financial relief from the Second Injury Fund or Fund for Re-Opened Cases (Special Funds) represented by the Special Funds Conservation Committee (SFCC), a non-ADR employer or an employer from another ADR program. The Special Funds Conservation Committee, Special Funds it represents and employers not covered under a particular ADR program are not subject to the jurisdiction of the ADR program and are not signatories to the collective bargaining agreement containing the ADR program provisions. The Board is also not a signatory to such collective bargaining agreements. Currently ADR employers seeking Special Funds reimbursement or apportionment of liability from an employer not covered under its ADR agreement have no way to obtain binding determinations against these entities. However, the Board retains jurisdiction over all claims and can address issues in ADR claims where an entity involved is not governed under the ADR agreement. The proposed rule would recognize and clarify the Board's continuing jurisdiction and remedy this problem by requiring that these issues be resolved by either a Board approved negotiated settlement or adjudication by the Board through its traditional processes.

    A new section 314.8 makes clear that any applications regarding an issue in a claim that are outside the WCL § 25(2-c) process are to be filed with the affected parties and the Board. Any negotiated settlement regarding these issues would go to the Board for approval, and if approved would not be reviewable under WCL § 23. If the parties cannot reach an agreement on an application, the applicant may request that the Board adjudicate the issue. Decisions by the Board would be reviewable under WCL § 23. Nothing in 314.8 is meant to affect or modify the legal requirements for agreements under WCL § 32.

    This clearly delineated procedure contained in Part 314 will avoid delays and confusion in the alternative dispute resolution process. This portion of the rule is consistent with the Legislature's objectives as it removes a financial disincentive (the unavailability of Special Funds reimbursement, apportionment of liability, and/or the ability to make final settlement of claims) for eligible employers to participate in ADR programs. Without the rule, ADR employers could be denied access to financial relief that non-ADR employers routinely obtain. Such denial is not equitable or appropriate, especially with respect to Special Funds reimbursement, as all employers, including ADR participants, are statutorily required to pay the assessments that fund the Special Funds. Without this regulation change, employers who are ADR participants are paying assessments the same as all other employers, but unlike non-ADR participating employers, they cannot obtain reimbursements from the Special Funds. The changes in this rule eliminate this inequity.
  4. Costs:
    No additional costs for the agency or its constituents are envisioned for the amendment to 314.2(d) (5). In fact, costs may be reduced as it is anticipated that the prompt filing of ADR-1s, concurrently with the present C-2 filing requirement, will reduce the need for post-report filing corrective action that is sometimes needed to remove an ADR case from traditional Workers' Compensation Board claim processes.

    Additional costs for the addition of 314.8 will be minimal and should be limited to photocopying, mailing costs, and legal fees associated with applications for relief. The Board's costs will consist of those associated with reviewing and approving negotiated agreements and holding hearings in cases where parties are unable reach an agreement regarding an ADR employer's request for financial relief. As the ADR program is limited in scope and participants, costs are expected to be minor and will be outweighed by the benefits of receiving Special Funds reimbursement and/or apportionment with a non-ADR employer.
  5. Local Government Mandates:
    There are no local governments who are participants in an ADR program. Therefore the change to 314.2 will have no affect on any local governments. The addition of 314.8 will affect local governments who may be responsible for a portion of a claim originally thought to be the sole responsibility of an ADR employer. Such local governments would be subject to the processes outlined in 314.8.
  6. Paperwork:
    No additional paperwork will be required as a result of the amendment of 314.2(d) (5). In fact, a uniform rule will likely reduce paperwork needed to rectify potential improper initial processing of ADR cases. Some additional paperwork will be required for 314.8 as the rule requires applications to the Board and other affected parties and requires applicants to either make a request to the Board for the approval of a negotiated settlement or make a request to the Board to adjudicate an issue. However, the filing of applications ensures access of ADR participants to benefits which may otherwise have been denied.
  7. Duplication:
    There is no duplication as this is a unique program administered solely by the WCB.
  8. Alternatives:
    There are no viable alternatives for 314.2(d) (5). A regulatory filing deadline of thirty (30) days presently exists. This proposal will reduce this deadline to ten (10) days for consistency with Workers' Compensation Law §110(2). This will assist the Board to accurately and promptly process an ADR case. There are no viable alternatives for the addition of 314.8. The issues addressed in 314.8 cannot be handled within the ADR process and are for the Board to resolve either through the approval of a negotiated settlement or by adjudication. This proposal ensures the Board can resolve these issues within its sole jurisdiction, but only at the request of the parties, so Board involvement in the ADR process is kept to a minimum.
  9. Federal Standards:
    There are no federal standards applicable.
  10. Compliance Schedule:
    Affected parties will be able to achieve compliance with the rule upon its adoption.

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