State: Workers’ Comp Rates Will Decrease by 22% Next Year

Governor Kathy Hochul announced on October 29 that New York State employers are expected to save more than $191 million next year due to a reduction in the annual workers’ compensation assessment rate — the rate was set today and goes into effect on January 1, 2025. The workers’ compensation rate will be 7.1% of the standard premium or premium equivalent — a 22% decrease from 2024 — which Hochul said is expected to save New York State businesses approximately $191 million.

“Affordability is crucial for both businesses and employers to thrive,” Hochul said. “This tremendous increase in savings for New York State’s employers not only adds employment opportunities, but also strengthens the necessary services and the community that businesses provide. We are dedicated to supporting our State’s businesses and their employees, and ensuring that they receive the benefits they rely on to care for themselves and for their families.”

New York State Workers’ Compensation Board Chair Clarissa Rodriguez said, “The Board is honored to join the Governor today in celebrating these incredible savings for New York’s businesses. Assessments on employers have continued to decline, while benefits to workers have climbed in recent years. We are proud of the work we are doing to build a better workers’ compensation system for the hardworking New Yorkers and businesses we serve.”

Employers pay an annual assessment to operate the workers’ compensation system, which provides critical benefits to workers who are injured or become ill as a result of their employment responsibilities, while protecting employers from costly lawsuits. 

The employer assessment rates are determined by the Workers’ Compensation Board’s need and budgeted statewide premium. The rate is calculated by dividing the Board’s total estimated annual expenses by a base of total estimated statewide premium. Insurers are required to apply the assessment rate to their premium or premium equivalent. The rate needs to be established by November 1 of each year and made effective by January 1 the following year.

Hochul noted the assessment rate has been steadily declining in recent years, largely due to prudent management in accelerating the runoff of special workers’ compensation liabilities — known as special funds — which are funded by the assessments. The 2025 rate of 7.1 percent reflects an over 43 percent decrease since 2019, when the assessment rate was 12.6 percent. The table below indicates how the rate has changed from 2019 to 2025.