Understanding New York Code Rule 59 and 60

September 18, 2020
Understanding New York Code Rule 59 and 60

Employers operating in New York need to understand their obligations and expectations under the New York State Department of Labor’s workplace safety and loss prevention programs. Mandatory Code Rule 59 and voluntary Code Rule 60 -- while very different -- are designed to make workplaces safer, ultimately reducing workers’ compensation costs.

This post explores both programs, answering frequently-asked-questions.

Industrial Code Rule 59: Workplace Safety and Loss Prevention

Employers with annual payrolls of more than $800,000 and a workers’ compensation experience modification rate (EMR) of 1.20 or more are required to comply with Code Rule 59.

Q: What is EMR?

A: EMR is an index measuring of your organization’s workers’ compensation history. Companies with EMRs of greater than 1.00 have safety performance results below their industry average, so the organization pays a surcharge on their insurance premiums.

Q: How do we know if we are subject to Code Rule 59?

A: If your organization is required to comply with Code Rule 59, you will receive a notification from the New York Compensation Insurance Rating Board (NYCIRB). The NYCIRB’s website includes information about how they determine which employers are subject to the rule.

Q: What does Code Rule 59 require?

A: NY employers subject to Code Rule 59 must schedule an appointment for a consultation and evaluation, notify their insurer and the Department of Labor, and complete the consultation and evaluation. Upon receiving the final report, employers must send copies of it to their insurer and the Department of Labor, addressing how and when items identified by the consultant will be addressed. You can find more information about Code Rule 59 compliance here.

Q: What happens if we do not comply?

A: Non-compliance can be costly, with the state levying a five percent surcharge on the manual program of the employer’s workers’ compensation program. For each additional year of non-compliance, the surcharge will go up an additional five percent. Employers who are subject to Rule 59 must comply with it indefinitely.

 

Industrial Code Rule 60: Workplace Safety and Loss Incentive Program

Unlike Code Rule 59, which is mandatory for certain NY employers, Code Rule 60 is a voluntary program that offers employers insurance premium credits.

Q: Which employers are eligible for credits under this program?

A: Credits are available for self-insured employers and insured employers whose EMR is less than 1.30 and whose annual workers’ compensation premiums are at least $5,000.

Q: How can an employer receive a credit under Code Rule 60?

A: Employers can get credits by starting one or more workplace programs designed to decrease injuries and reduce workers’ compensation costs, including:

  • Workplace safety
  • Drug and alcohol prevention
  • Return-to-Work

Q: How can our organization apply for credits?

A: If your organization has implemented at least one of the workplace programs identified above, your next step is to have the program evaluated by the Department of Labor or a certified specialist, who will prepare a report for you. Submit that report with your application no later than 120 days before the end of your workers’ compensation policy year (or by September 2 for self-insured employers.) The Department of Labor will evaluate your application and contact you with approval or with a request for more information.

Q: Is this a one-time premium credit?

A: No! Premium credits can be applied to subsequent years. To receive these credits, employers must submit annual reports to the Department of Labor. More information about Rule 60 is available here.

It is critical to understand your obligations to the NY Department of Labor under Code Rule 59 as well as your rights under Code Rule 60. For more information about these programs, visit the Department of Labor’s website.

 

At Lamb Insurance Services, we work exclusively with nonprofit and social service organizations of all sizes, helping them reduce risk through property and liability protection, employee benefits solutions, and more.

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