REAL. ESTATE
AND
NEW YORK, JUNE 20, 1914
m
â– UNFAIRNESS OF THE COMPENSATION LAW
Employers Unanimous that Compensation Rate is Exces¬
sive—Cost of Insurance in Stock Companies Announced.
â– â– â– â– â– â– â– I
â– â– â–
â– â– â– â– IIIIIM^^^^^
EMPLOYERS who believe in a work¬
men's compensation insurance law
on general principles charge the New
York "State law with being unfair. It
is unfair, for one reason given, because
the rate of compensation fixed by the
law is excessive, when compared with
the rates paid in other States and coun¬
tries.
By July 1 every employer in the so-
called hazardous trades must be insured,
unless the State shall permit him to
carry his own insurance. The employ¬
ers affiliated with the Building Trades
Employers' Association will for the
most part insure with the stock com¬
panies, but a couple of mutual com¬
panies are being organized.
The standard stock company rates for
insurance policies approved by the State
Superintendent of Insurance were made
public this week. Figured upon the cost
for every $100 of insurance protection,
the rate for masonry work, for example,
is $6.16, and for carpenters doing con¬
struction work, $4.28. The rates for
other trades are annexed hereto.
Under the Workmen's Compensation
Law the employer must pay something
for every disabling accident (with rare
exceptions) to an employe, either doc¬
tors' bills or compensation, or both.
And in some cases the compensation
payments will extend over a long period
of years—possibly fifty years or more.
The- owners of apartment houses and
hotels come under the law as well as
manufacturers and cpntractors.
Risks of Not Insuring.
An employer who does not insure
runs two risks: (1) H,e can be sued by
an injured employe for "damages" un¬
der the common law (the Employers'
Liability Law), and, if sued, cannot avail
himself of the defenses of "contributory
negligence" or "assumption of risk" on
the part of the injured employe, and the
old "fellow servant" rule (or defense)
is also taken away; and (2) such em¬
ployer becomes liable to a suit by the
State commission for other penalties.
The scale of. compensation for this
State is, generaffly sneaking, two-thirds
of the employe^^ average weekly wage
for the year previous, but not less than
$S per week, nor more than $1S per
week, except for the loss of hand, arm,
foot, leg or eye, where the higher limit
is $20 per week to workmen who have
earned more .than $30 weekly. Payments
must continue until disability ceases.
For permanent total disability, every
workman who is in receipt of wages of
$22.50 per week or over when injured
will be entitled to the maximum weekly
payment of $1S, or an annual pension of
$780 for life. What will be the average
cost of such pensions is an actuarial
question. But foreign experience indi¬
cates that those drawing permanent dis¬
ability pensions have a surprisingly long
life expectancy. Consequently, such
pensions raay frequently run for sixty
years or more, so that an aggregate
of $46,800 in a single case may not be
unusual. And the employer's liability
will continue long after he has retired
from business, or it may be a charge
upon his estate.
A Possible Case.
P. Tecumseh Sherman, former Com¬
missioner of Labor, who has criticised
the law as containing many unjust, un¬
certain and defective provisions, has
given the following case to illustrate
what, under certain circumstaiices, may
be the cost of an employer's liability:
WORKMAN KILLED—ACTED 24—WAGES $20
PER WEEK.
Annual Duration
Pension, in years. Total.
Wife, aged 22 years... $300 50 $15,000
Child, aged 1 month... 100 18 1,800
Child, aged 2 years___ 100 16 1,600
Mother, aged 45 years.. 150 23 3,750
The following table will illustrate the
excessive compensations provided for by
the New York State law, in comparison
with the compensations that are being
paid in other States. For example, the
State of Michigan requires an employer
to pay a workman for the loss of an
eye weekly sums that will aggregate
$1,000; Ohio allows *1,200; Connecticut,
$1,040; New Jersey, $1,000, and New
York, $2,500.
MAXIMUM AMOUNTS AS PER SPECIAL
SCHEDULES.
Mich. Ohio. Conn. N. J. N. Y.
Hand ........$1,509 $1,800 $1,560 $1,500 $4,880
Arm .......... 2,000 2,400 2,080 2,000' 6,240
Foot .......... 1,250 1,500 1,300 1,250 4,100
Leg ........... 1,750 2,100 1,820 1,750 5,760
Eye ..........1,000 1,200 1,040 1,000 2,360
Thumb ....... 400 720 380 60O 900
Index finger... 300 420 380 350 690
2d index finger. 230 860 800 80O 450
3d index finger. 200 240 230 200 875
4th index finger 150 180 '200 130 ' 225
Great toe...... 250 860 380 300 470
Bach otber toe. 150 120 130 100 240
Both hands.... 4,000 * 5,200 4,000 •
Both feet.....4,000 • -5,200 4,000 *
Hand and foot. 4,000 • 5,200 4,000 •
Both eyes.....4,000 * 5,200 4,000 •
•Total disability pension.
Illustration of Death Benefits.
If a young man or woman 20 years
and 11 months old, earning regularly
$15 per week, be killed, leaving as sole
dependent a widowed mother, aged 45,
totally dependent, then the death ben¬
efits under the laws of the following
States and countries respectively are as
follows:
New York......Annual pension of $117 to
mother tor life.
â– California ......Weekly pension of $9.75 to
mother, until aggregate of
$2,340 is reached.
Ohio.............Weekly pension of $10 to
mother tor 313 weeks, ag¬
gregating $3,130. !»*.
Connecticut ___Weekly pension of ^^IRiO to
mother for 312 weeks, ag¬
gregating $2,340.
Michigan ......Weeikly pension of $7.50 to
mother for 800 weeks, ag¬
gregating $2,250.
New Zealand... A lump sum of $1,948.60.
British Columbia. V lump sum of $1,500.
Great B'ritain... A lump sum of $1,459.95^
France ........Annual pension of $o4.24 to
mother for life.
Germany ......Annual pension of .$99.60 to
mother for life.
Austria ........Annual pension of $97.44 to
mother for life.
Possibly a Source ot Profit.
Eraployer,p in some of the building
trades said this week that a compensa¬
tion rate of 66 2/3 per cent, of the aver¬
age wages of a workman in the year
preceding the receipt of his injury might
conceivably amount to more than he
would actually earn during the rest of
his life if not disabled. A compensation
rate of 66% per cent, based on wages
earned in the busy year of 1906 would be
in excess of what the man would have
earned in a dull year like 1913, for in¬
stance. A life pension for the loss of
the use of an arm (not necessarily of
the arm itself), based on the earnings
of a boom year, when employers were
paying a bonus for good labor, might
be a source of profit to a workman.
The Feeling Among Employers.
The Record and Guide made an effort
to learn the feeling among employers
with which the new law is regarded. It
was found that the prevailing sentiment
is not opposed to the principle of com¬
pensation for injuries, but that there is a
deep feeling that a great injustice is
being done to employers by the high
rates of compensation fixed by the law.
President Francis N. Howland of the
Association of Manufacturers and Deal¬
ers in Building Materials (also of the
Candee, Smith & Howland Company)
expressed this view: "While a compen¬
sation law would seem to be called for
under present conditions, it ought of
necessity to be a fair one; and this
present law is not so and wUl be a
hardship to building interests. It will
add greatly to the cost of construction.
The rate of 66 2/3 per cent, is not con¬
sidered a fair one."
President Frank E. Conover of the
Master Builders' Association character¬
ized the compensation rate as excessive
when compared with the rates in other
States, and said that this will be one
more reason why manufacturers will
want to leave New York when circum¬
stances will permit.
Lewis Harding of Lewis Harding &
Co., contractors for carpenter and cabi¬
net work, chairman of the Industrial
Improvement Committee of the Build¬
ing Trades Employers' Association, re¬
marked: "A very large percentage of
the men employed in the building indus¬
try believe in workmen's compensation,
but the opinion seems to be unanimous
that-the rate of 66 2/3 per cent, is too
high. There seems to be no good rea¬
son why the industry in New York
State should be taxed double^ 'what it
is in other States. In my opinion the
ultimate effect will be that the cost of
labor connected with building construc¬
tion will be increased about S per cent."
They Believe in Compensation.
Alexander M. Bing, of Bing & Bing
and the Speedwell Construction Com¬
pany, said: "We believe workmen's
compensation to be absolutely fair and
necessary and infinitely pteferabje to
the system which it will supersede. "The
rate seeins to be considered a little high.
We are not prepared to state whether
or not this is the case. Another objec¬
tion seems to be the very great length
of time during which liability might
continue to the widow, etc. It would
seem that some fair amendment mi^ht
be made which would conserve the in¬
terests of the widow and children, and
shorten the length of time during which