New York Employers to See Major Workers’ Comp Savings
A statewide rate reduction taking effect Oct. 1 could save insured businesses an average of nearly $1,800 per policy.
New York workers’ compensation savings are expected to exceed $1.7 billion through a combination of lower insurance rates, policyholder dividends and discount programs, according to an announcement from Gov. Kathy Hochul’s office.
The largest portion of the projected savings will come from an average 22% reduction in workers’ compensation premium rates for insured employers. State officials estimate the lower rates will save businesses more than $1 billion, or an average of $1,779 per policyholder.
The reduction was approved by the New York State Department of Financial Services and is scheduled to take effect Oct. 1, 2026.
For employers in Utica, Rome and across the Mohawk Valley, the change could help reduce one of the mandatory costs of operating a business. However, the actual savings received by an individual employer will depend on factors including payroll, industry, employee classifications, workplace safety history and the insurer’s final rate calculations.
What New York’s Workers’ Compensation Reduction Means
Workers’ compensation insurance provides medical care and wage replacement benefits to employees who are injured or become ill because of their jobs. Most New York employers are required to maintain coverage.
The newly approved rate change does not mean every business will automatically receive a 22% reduction on its final bill.
Instead, the figure represents an average statewide reduction in the rates used to calculate premiums. The actual amount paid by a business can vary based on its risk level, type of work and claims record.
According to the governor’s office, the new rate structure is expected to produce:
- An average 22% reduction in workers’ compensation premium rates
- More than $1 billion in estimated savings for insured employers
- Average savings of approximately $1,779 per policyholder
- An Oct. 1, 2026, effective date
- Additional savings through New York State Insurance Fund programs
State officials say workers’ compensation premium rates have declined each year since 2020. Approved decreases averaged 10.3% annually during the six-year period cited in the announcement.
NYSIF Returned More Than $700 Million to Policyholders
The state’s $1.7 billion estimate also includes more than $700 million distributed during the past year by the New York State Insurance Fund, commonly known as NYSIF.
NYSIF is New York’s largest workers’ compensation insurer. It also provides disability benefits insurance and other coverage for eligible employers.
The $700 million included:
- $698 million in dividends and discounts for more than 100,000 employers participating in workers’ compensation safety groups
- $2.9 million in dividends for more than 27,000 disability benefits policyholders
The governor’s office said NYSIF has allocated more than $2.8 billion back to policyholders since Hochul took office.
NYSIF safety groups generally bring together employers in similar industries. Businesses may qualify for discounts or dividends when the group’s workplace safety and claims performance meet program standards.
These savings are not guaranteed for every policyholder. Employers should review their individual policy terms and speak with their insurance carrier or broker before making financial plans based on the statewide estimates.
Why Workers’ Compensation Rates Are Falling
State officials linked the lower rates partly to a decline in the frequency of workers’ compensation claims involving lost work time.
A lost-time claim generally occurs when a workplace injury prevents an employee from working beyond a limited waiting period or results in a qualifying disability.
Hochul also credited workplace safety measures, including protections for warehouse employees, with helping reduce injuries.
“One of the key pillars of my administration has been to reduce costs for New York’s businesses,” Hochul said. She added that the reduction could help employers operate and grow while maintaining benefits for injured workers.
New York’s Warehouse Worker Injury Reduction Program took effect June 1, 2025, for employers covered by the Warehouse Worker Protection Act. The program requires covered businesses to evaluate ergonomic risks, train workers and take steps to reduce injuries associated with lifting, carrying, pulling, pushing and other manual tasks.
Required safety measures may include:
- Written workplace evaluations
- Identification of ergonomic risks
- Employee and supervisor training
- Changes to equipment or workstations
- Adjustments to work pace or procedures
- Employee input on injury-reduction plans
The Department of Labor says covered employers must provide training during paid working hours and in language workers understand.
Employer Assessment Rate Has Also Declined
New York employers may also benefit from a separate reduction in the assessment used to support the Workers’ Compensation Board and related system expenses.
According to the governor’s office, the employer assessment rate has declined by 37.5% since 2021.
The assessment is calculated using the Workers’ Compensation Board’s estimated annual expenses and the total estimated workers’ compensation premium written statewide. Insurers apply the assessment to premiums or their equivalent.
Lower assessments and insurance rates may provide meaningful relief for employers, particularly small businesses operating on narrow margins.
However, lower business costs must be balanced with the need to protect employees who suffer legitimate workplace injuries.
Assemblymember Harry Bronson praised the potential savings but said additional work is needed to ensure injured workers receive timely benefits.
“There is more work to do to bring balance to our Workers Compensation system for workers,” Bronson said.
Will Injured Workers Lose Benefits?
The state’s announcement describes the change as a reduction in insurance rates rather than a reduction in legally required worker benefits.
Workers’ compensation benefits are established by state law and administered through the Workers’ Compensation Board. The Board’s official website continues to provide services for injured employees, employers, medical providers and insurers.
State officials also said the system has been modernized to reduce delays and improve medical access.
Recent changes cited by the governor’s office include:
- Replacing several paper forms with the universal CMS-1500 medical billing form
- Expanding electronic submission of medical bills
- Establishing permanent telehealth regulations
- Streamlining medical dispute procedures
- Reducing administrative backlogs
- Moving more claims and hearings into online systems
The Workers’ Compensation Board says electronic CMS-1500 submission is mandatory for covered medical billing, reflecting the state’s broader move away from paper processing.
The goal is to lower administrative costs while helping medical providers receive payment more quickly. Whether the changes consistently produce faster outcomes for every injured worker will depend on implementation and individual case circumstances.
What Mohawk Valley Employers Should Do Next
Businesses in Utica, Rome, Herkimer, Little Falls and surrounding communities should not assume their October invoice will automatically fall by exactly 22%.
Instead, employers can take several practical steps:
- Contact the insurance carrier or broker. Ask how the approved reduction will affect the company’s specific policy.
- Review employee classifications. Incorrect classifications can increase premiums or create compliance problems.
- Check the claims history. Employers should verify that resolved or incorrectly recorded claims are reflected accurately.
- Ask about safety-group eligibility. Industry safety groups may offer additional discounts or dividends.
- Strengthen injury-prevention programs. Training, equipment improvements and clear reporting procedures may reduce injuries and long-term costs.
- Confirm the Oct. 1 renewal impact. The effective date may affect policies differently depending on their renewal dates and insurance arrangements.
Employers can also review official coverage requirements and resources through the New York State Workers’ Compensation Board.
A Welcome Reduction, but Details Matter
The projected $1.7 billion in New York workers’ compensation savings represents potentially significant relief for employers. Small businesses, nonprofit organizations, manufacturers, construction companies and service providers all face rising costs for utilities, supplies, wages and insurance.
Lower workers’ compensation rates could create room for hiring, equipment upgrades or other investments.
Still, statewide averages do not tell every employer what it will save. Business owners should examine their actual renewal documents and ask insurers to explain how the approved rate change was applied.
State leaders must also continue watching whether lower premiums are accompanied by safe workplaces, timely medical treatment and dependable benefits for injured employees.
Affordability and worker protection should not be competing goals. A successful workers’ compensation system must deliver both.
Employers should contact their insurance providers before the Oct. 1 effective date, review their safety practices and confirm that all available discounts are reflected in their coverage.
