NY Labor Law 240 has been infamous for its radical costs in the circles of contractors and insurance providers.
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NY Labor Law 240 has been infamous for its radical costs in the circles of contractors and insurance providers. The law, in the eyes of contractors, requires that, “a construction contractor or developer who holds the construction insurance policy for a job be solely responsible for any injuries suffered by workers on that project.” Opponents of NY Labor Law 240 and New York state legislators are currently fighting over whether the law does more harm than good.

According to a study conducted by the Cornell University Department of Policy Analysis and Management and SUNY’s Nelson A. Rockefeller Institute of Government the bill has resulted in 667 more construction incidents per year and has resulted in nearly $3 billion a year in unnecessary costs. While $3 billion represents a considerable sum (and must also put quite a lot of strain on the construction and real estate industries) the more concerning figure is that over 500 construction workers are injured in scaffolding accidents.

Paul Fernandes, the chief of staff of the Building and Construction Trades Council of Greater NY, believes that this study will disappear just like many similar reports in the past. He claims that it is, “Yet another in the long line of anti-worker research that purports to advocate for worker safety by weakening business’ responsibility for workplace safety and health.” This may be true but the bill and the financial and human repercussions seem to bring about a discussion on whether or not the chicken or the egg came first.

The existing bill costs the contractors a lot of money because of all the workers comp claims and, due to those high number of claims, insurance providers have either stopped offering coverage for scaffolding accidents or have driven their costs way up. The supply of insurance companies that offer the plan has become very small while the demand has only escalated which has led to extremely expensive insurance plans. With no bill in place the cost of insurance would go down as more insurance providers began to offer the policy again and offered some competition. The removal of the law could also leave employees at fault for mistakes that result in injury which could lead to some very trying circumstances for construction workers and builders. However, without the law in place the construction industry could save almost $3 billion which may result in more jobs or higher salaries and end up spurring more economic growth. It will be interesting to see which side the legislators end up joining forces with.