NYCSRA URGES THE GOVERNOR OF NEW YORK TO USE HIS EXECUTIVE POWER AND ISSUE A 12-MONTH MORATORIUM ON THE ABSOLUTE LIABILITY PROVISION OF THE “SCAFFOLD LAW” WITH RELEASE OF VIDEO
How this antiquated law is hampering New York State’s economic recovery, and how this “fix” can release billions of dollars into the struggling economy and create thousands of jobs.
Following up on our urgent written appeals to Governor Andrew Cuomo asking him to use his executive authority to issue a 12-month moratorium on the “absolute liability” provisions of the “anachronistic and inequitable” “Scaffold Law”, the NYC Special Riggers Association has released a video titled “New York Billion Dollar Fix 2020” (BillionDollarFix.nyc).
The statute, comprised of New York Labor Law sections 240/241 and commonly known as the “Scaffold Law,” holds contractors, property owners and their agents, absolutely liable for any gravity-related injuries sustained by a worker, irrespective of gross negligence on the part of the worker.
The video, which is supported by a broad coalition of New York City and State construction, real estate, and non-for-profit organizations, explains the origins of the law in the late 1800’s, when worker protections were scant at best, and goes on to show how the creation of governmental agencies and the advancement of worker rights and protections since it was enacted, have made “Scaffold Law” not only obsolete, but have also turned what was intended as a shield of protection into a sword of abuse.
At the heart of the argument, the video explains how the Governor of New York has a unique opportunity to help jumpstart the economy. Due to the Covid-19 pandemic state of emergency, the Governor can use his executive authority to issue a 12-month moratorium on the provisions of the “Scaffold Law” from absolute strict liability to comparative fault and save billions of taxpayers’ —and private businesses— dollars in insurance costs. These billions can be better invested in the badly needed infrastructure projects and help generate thousands of jobs in the construction industry and other businesses in the state, without affecting any of the workers’ rights and protections in place.
“I speak to our members every day and I can tell you we desperately need this. We need this change from the governor. It will help keep our companies afloat and our workers working.”
Veronika Sikorski (President of the New York City Special Riggers Association, Licensed Special Rigger & NYC Construction Business Owner)
“Illinois was the last state that had a similar statue, they redeemed it in 1995 and, after that happened, the amount of accidents went down, the amount of construction went up and the insurance premiums leveled off with the rest of the country.”
James Fenniman (Insurance Executive & Adjunct Risk Management Professor at St. John’s University)
“You’re talking about a billion dollars of money that’s going into people’s pockets because they’re fighting an unfair fight. Let’s make it fair.”
Michael DiFonzo (Licensed Site Safety Manager, Licensed Concrete Safety Manager, Licensed Special Rigger & NYC Construction Business Owner)
It costs more to build infrastructure projects in New York than anywhere else in the world.¹ A mile of subway in NYC costs $3.1B versus $928M in American cities like San Francisco, or $400M in similarly dense cities like Tokyo.
Insurance costs on the Second Avenue Subway ballooned from $93M to $554M, a rise blamed on the Scaffold Law.²
The Scaffold Law is estimated to have added $200M - $400M to the cost of the Mario Cuomo bridge.³
Liability costs on one joint New York/New Jersey bridge project are more than double on the New York side, strongly suggesting that state laws, not construction costs, are to blame for the cost increase.⁴
Across the state, the Scaffold Law is estimated to add over $785M in annual costs to public projects.5
On a per project basis, the Scaffold Law is estimated to add an additional 7% to large-scale construction projects.6
The Scaffold Law hinders disaster relief, as evidenced by Habitat for Humanity and several other non-profits struggling to get insurance for rebuilding projects in the wake of Superstorm Sandy.
Most national insurers will not write construction policies in New York and some of the few remaining insurers have stopped writing policies in the last few years.7
Insurance availability threatened the Owner-Controlled Insurance Program of the New York School Construction Authority (SCA) which provides insurance to over 800 M/WBE firms.8
The New York School Boards Association estimates that the Scaffold Law costs upstate schools $200M annually.
In 2013, the New York School Construction Authority was nearly unable to get insurance for its $2 billion capital program, despite an excellent safety record. The new insurance costs are $240M for 2014, nearly triple that of the previous year.9
The SCA’s increased insurance costs are equivalent to 8-10 new schools over a 3-year period.10
The problematic absolute liability of the Scaffold Law is not written into the original law. Rather, it is the result of judicial interpretation, suggesting that this was not the original legislative intent.
The number of Scaffold Law cases has increased 500% since 1990, despite a drop in overall construction injuries.11 A contributing factor to these claims is the compensation arrangement of plaintiff’s attorneys. Suspect and often frivolous claims would not be pursued but for the absolute liability provision of the law.
Progressive Speaker of the New York City Assembly, Corey Johnson, called for repealing New York’s Scaffold Law in his plan to fix the MTA.12
Over half of the state’s county governments have passed resolutions supporting the reform or repeal of the state’s Scaffold Law.13
New York is the only remaining state that has a law like the Scaffold Law. Illinois repealed its Scaffold Law in 1995, and construction-related fatalities decreased by 26% over 5 years.14
1 Bradford, Ben, “Why are Subways in the U.S. so expensive?”, Marketplace, National Public Radio, April 2019. https://www.marketplace.org/2019/04/11/subways-us-expensive-cost-comparison/
2 “Critics blame Scaffold Law for megaproject’s insurance costs ballooning 557%”, Crains New York Business, August 2018. https://www.crainsnewyork.com/article/20180730/POLITICS/180739992/critics-blame-scaffold-law- for-megaproject-s-insurance-costs-ballooning-557
3 Estimate by Willis of New York.
4 According to claims data provided by the Port Authority of New York and New Jersey. https://corporatesolutions.swissre.com/insights/knowledge/newyork_law_coverage.html
5 Hattery, M, Geddes, R, and Kay, M. "The Costs of Labor Law 240 on New York's Economy and Public Infrastructure”, Rockefeller Institute of Government, 2013. http://www.nycji.org/images/documents/2014-02-study-The-Costs-of-Labor-Law-240-on-New-York-Economy-and- Public-Infrastructure.pdf
6 “Scaffold Law Bumped This Project’s Insurance Tab by 557 Percent”, Habitat Magazine, August 2018. https://www.habitatmag.com/Publication-Content/Legal-Financial/2018/2018-August/Scaffold-Law-Costs
7 Bull, David. "Nationwide E&S pulls back from NY construction." The Insurance Insider, 2018.
8 Grillo, Lorainne, letter to all NYCSCA contractors, July 2013.
9 Gieger, Dan. "School Construction Authority Hit With Huge Bill", Crain's New York Business, 2013.
10 Office of NYC Public Advocate Bill de Blasio. "The Pre-K Crunch: How NYC Parents Struggle to Find Pre- Kindergarden Slots." 2013.
11 Hattery, M, Geddes, R, and Kay, M. "The Costs of Labor Law 240 on New York's Economy and Public Infrastructure”, Rockefeller Institute of Government, 2013.
12 Campanile, Carl, “Corey Johnson targets Scaffold Law in his plan to fix the MTA”, New York Post, March 2019.
13 New York State Association of Counties, “NYSAC Standing Committee on Employee Relations, Resolution #1”, 2016
14 United States Department of Labor, Bureau of Labor Statistics Census of Fatal Occupational Injuries