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Contractors call for moratorium on Scaffold Law

As construction work resumes across New York, contractors are urging Governor Andrew Cuomo to freeze parts of the state’s controversial scaffold law.

Otherwise known as Labor Law 240, the scaffold law puts absolute liability for workersʼ injured in a worksite fall on contractors and property owners when it is found that proper safety measures weren’t in place.

The Scaffold Law Reform Coalition (SLRC) and the New York State City Special Riggers Association (NYCSRA) have sent an urgent appeal to Governor Andrew Cuomo asking him to use his executive authority to issue a moratorium on the “absolute liability” provisions of what they call “anachronistic and inequitable” Scaffold Law.

The NYCSRA has been working with the Lawsuit Reform Alliance of NY to support reform of the Scaffold Law which holds contractors and property owners absolutely liable for any elevation-related injuries sustained by a worker, regardless of the worker’s gross negligence.

In a statement, John Kalafatis, Board Member, NYCSRA said: “Some may say that a moratorium on absolute liability could hurt labor. I say absolutely not – this helps labor!

“Being a construction business owner for over 40 years where labor safety and well-being are my primary concern, there have been countless times where our firm’s capital expenses are tied up in insurance and legal costs instead of going where they belong – labor, safety, training and productivity.

“Without question just and equitable compensation for laborers that do get injured is warranted.  However, because the absolute nature of the law incentivizes litigation, quite simply, too many allegations are not real.  This moratorium would not negatively impact those actually injured.  Insurance carriers would return to the New York marketplace where competition is virtually non-existent. The time is now to help our state and do the obvious.”

The letter, dated June 18, praises the Governor and his team’s vision for infrastructure and small business and reminds him that he has supported fixing the Law in public comments.

It notes that his vigorous agenda is hindered by a law that makes NYS infrastructure projects the most expensive anywhere in the world and that New York is the only state in the nation to retain such a law.

The Coalition faults “special interest groups” for profiting from the Law’s inequities at the expense of the public.

It continues, “At this crucial time, where the electorate is acutely aware of the devastation COVID-19 has wrought upon our economy, we must cut down special interests in favor of the public interest. Now is the time to act.”

It calls for the moratorium as an opportunity to “help our state come back strong.”

The letter states numerous facts supporting the repeal of the Scaffold Law.

Infrastructure

  • It costs more to build infrastructure projects in New York than anywhere else in the world.  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. 
  • The Scaffold Law is estimated to have added $200M – $400M to the cost of the Mario Cuomo bridge.
  • 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.
  • Across the state, the Scaffold Law is estimated to add over $785M in annual costs to public projects.
  • On a per project basis, the Scaffold Law is estimated to add an additional 7% to large-scale construction projects.
  • 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.
  • On a per project basis, the Scaffold Law is estimated to add an additional 7% to large-scale construction projects.
  • 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.

Insurance

  • 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. 
  • 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.

Education

  • 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.
  • The SCA’s increased insurance costs are equivalent to 8-10 new schools over a 3-year period.

Law

  • 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.   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.

Public Support

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.

Over half of the state’s county governments have passed resolutions supporting the reform or repeal of the state’s Scaffold Law.

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.

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