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Public Report of Review
Mexico NAO Submission No. 2001-1
Unreviewed Translation
SECRETARIAT OF LABOR AND SOCIAL WELFARE
INTERNATIONAL AFFAIRS UNIT
MEXICAN NATIONAL ADMINISTRATIVE OFFICE
FOR THE NORTH AMERICAN AGREEMENT ON LABOR COOPERATION
Mexico City, November 19, 2004
TABLE OF CONTENTS
I. Executive Summary
II. Introduction
III. U.S. Obligations under NAALC
IV. Issues Related to Labor Law and NAALC Obligations
4.1 Prevention of occupational injuries and illnesses
4.2 Compensation in cases of occupational injuries or illnesses
4.3 Protection of migrant workers
V. Recommendation
VI. End Notes
SECOND REPORT OF REVIEW FROM THE MEXICAN NAO REGARDING PUBLIC COMMUNICATION MEX 2001-1
I. Executive Summary
The National Administrative Office (NAO) of Mexico issued the First Report of
Review on Public Communication MEX 2001-1 on November 8, 2002. The report was
issued one year after having asked the U.S. NAO for technical consultations,
a request that had not been answered as of that time. Accordingly, in its
report Mexico's NAO opened up an opportunity for dialogue between the Secretariat of
Labor and Social Welfare (STPS) and the U.S. Department of Labor (DOL).
The report recommended making the DOL aware of the issues presented in the public
communication in order to determine whether there had been failure to comply with the law;
giving broader coverage to dissemination of the labor rights of migrant workers in the
U.S. as well as the resources available to them, through the bilateral cooperation channels
established between the STPS and DOL in the Joint Ministerial Statement on the labor rights
of immigrant workers (2002); and holding consultations with the U.S. NAO to determine the
advisability of holding ministerial-level consultations.
The Public Communication, submitted to the Mexican NAO by four non-governmental
organizations and workers from different industries in the state of New York, refers to
the application of labor law by U.S. authorities as it relates to prevention of occupational
injuries and illnesses; compensation for occupational injuries or illnesses; and protection
of migrant workers. The Communication complains of failure to comply on the part of U.S.
labor authorities due to excessive and continuous delays in awarding compensation for
occupational injuries and illnesses. These delays distort the rate of injuries and
illnesses in companies and lower the insurance premiums that employers must pay.
The Communication also complains that migrant workers do not receive compensation for
occupational injuries and illnesses because of their migrant status.
Based on the technical consultations held with the U.S. NAO in February 2003 and
February 2004, as well as available public information, Mexico's NAO has determined
that:
Regarding prevention of occupational injuries and illnesses, doubts remain with
respect to how the provisions of the New York State Workers' Compensation Law have been
applied. These provisions require employers to keep records of occupational accidents
and illnesses occurring in their companies and establish the penalties that the competent
authority must impose in the event of failure to comply with this requirement, and the
relationship with the prevention of work-related accidents and illnesses.
Regarding compensation for occupational injuries and illnesses, doubts remain as to
whether the actions of the New York State labor authorities adhered to the commitments
made by the U.S. government under the North American Agreement on Labor Cooperation
(NAALC), in that the petitioners' arguments are consistent with various reports or studies
issued by non-governmental organizations, medical and research centers, as well as
unions on ensuring that proceedings before the New York State labor authorities are
fair, equitable, and transparent.
The reports or studies by non-governmental organizations, medical and research centers,
and unions question the effective application of the New York State Workers' Compensation
Law by the competent labor authorities with respect to waiting times for adjudication of
compensation claims, penalties imposed on employers when they use delaying tactics to
improperly prolong hearings on compensation awards, and the actions of the competent
authority regarding appeals from insurance companies that compensation be denied to
workers who become injured or sick due to their work.
In the First Report of Review by the Mexican NAO, the information requested by Mexico's
NAO in the consultations for cooperation on legal waiting times for adjudication of claims
for compensation was left pending. In this regard, the U.S. NAO failed to provide
information on the legal terms for the process of awarding compensation.
In addition, the information provided by the U.S. NAO does not specify whether the New
York State Board has ever imposed penalties on employers or insurance companies that used
delaying tactics to prolong the hearings period. Doubts also remain regarding the
remedies available to workers, whether they are used, and whether migrant workers
know about them, in the event that insurance companies improperly suspend the payment
of benefits or medical treatment.
Regarding the petitioners' claims that the amounts and maximum periods for payment
of compensation for occupational injuries or illnesses have declined, although data
were identified in studies that indicate that these amounts are low in comparison
with other states in the U.S., it is recognized that such amounts are established
in the New York State Workers' Compensation Law. Thus, since Article 2 of the NAALC
recognizes the right of the Parties to establish internally their own labor standards and
consequently to adopt or modify their labor laws and regulations, Mexico's NAO makes no
determination.
Regarding protection of migrant workers, in the Joint Ministerial Statement between
the STPS and the DOL on the labor rights of immigrant workers (2002), Mexico's
Secretary of Labor and Social Welfare and the U.S. Secretary of Labor confirmed their
commitment to vigorously apply the labor laws within their area of jurisdiction to
protect all workers regardless of their migrant status. The U.S. NAO indicated that
such workers enjoy the same rights as U.S. workers under the New York State Workers'
Compensation Law. However, there is evidence that serious obstacles such as language,
cultural differences, and a complex bureaucracy make it difficult for such workers
to enforce those rights and, as a result, most of them receive no compensation at all
for occupational injuries or illnesses.
The U.S. NAO provided information on a free telephone number that the New York State
labor authority established to provide workers with information on their rights in Spanish.
Mexico's NAO feels it would be useful to know how these services have operated and
whether they have been effective in informing workers of their right to receive compensation
when they are injured or become ill due to their work, regardless of their migrant status,
and whether this has had any effect on enabling migrant workers to enforce that right.
Based on the foregoing, Mexico's NAO recommends that ministerial consultations be held
between the Mexican Secretary of Labor and Social Welfare and the U.S. Secretary of Labor,
pursuant to Article 22 of the NAALC.
II. Introduction
The Mexican NAO, a division of the International Affairs Unit of the STPS, prepared
this report to follow up the First Report of Review on Public Communication MEX 2001-1
issued on November 8, 2002, which indicated that Mexico's NAO would seek consultations with
the U.S. NAO pursuant to Article 21 of the NAALC in order to inform itself about progress
made on the actions recommended in the report and to be in a position to determine
whether it should recommend that the Secretary of Labor and Social Welfare of Mexico
ask the U.S. Secretary of Labor for ministerial consultations on the issues presented by
the petitioners.
The reports issued by Mexico's NAO refer to Public Communication MEX 2001-1 submitted
on October 24, 2001 by four non-governmental organizations, the National Mobilization
Against Sweatshops (NMASS), the Chinese Staff and Workers' Association (CSWA), the
Asociación Tepeyac, and the Workers' Awaaz, together with thirteen
workers (natives of China, Ethiopia, Guatemala, México, Poland, the Dominican Republic,
and El Salvador) from different industries in the state of New York.
Public Communication MEX 2001-1 refers to alleged failures to effectively apply labor
legislation by U.S. authorities with respect to labor principles number 9, prevention
of occupational injuries and illnesses; number 10, compensation in cases of occupational
injuries or illnesses; and number 11, protection of migrant workers of Annex 1 of
the NAALC.
The petitioners in Public Communication MEX 2001-1 indicate that the U.S. labor authorities
fail to comply with the obligations established in Articles 3 and 5 of the NAALC on
Government Enforcement Action and Procedural Guarantees, because of excessive and continuous
delays in adjudication of compensation for occupational injuries and illnesses. The
petitioners allege that these delays demonstrate a persistent pattern of failure to comply
with labor law on the part of the U.S. government.
Regarding labor principle number 9 of the NAALC on prevention of occupational injuries
and illnesses, the petitioners indicate that the New York State Workers' Compensation
Board's delay in resolving claims for award of compensation for occupational injuries and
illnesses results in a failure to maintain a real and effective record of the number
of occupational injuries and illness that occur in companies. This delay means that
lower insurance premiums are set and paid by employers, and impedes the structure of
incentives for preventing occupational injuries and illnesses.
Regarding labor principle number 10 of the NAALC, which establishes compensation in
cases of occupational injuries and illnesses, the petitioners assert that the New York
State Workers' Compensation Board continuously and improperly delays compensation to
injured or sick workers in order to favor the employer. In addition, they indicate that
if the decision favors the worker, the employer can appeal the decision, which means
that the cases are prolonged for as much as 10 years. As long as the case is open, the
workers receive no wages or compensation.
Regarding labor principle number 11, protection of migrant workers, the petitioners
indicate that some workers who qualify to receive workmen's compensation do not qualify
for another class of government benefits due to their migrant status. They indicate
that proceedings before the New York State Workers' Compensation Board are not equitable
because the translation services to assist in determining the admissibility of
compensation payment for migrant workers who do not speak English are non-existent
or inadequate.
On November 15, 2001, Mexico's NAO accepted for review Public Communication MEX 2001-1
because it met the requirements established in Article 1 of the Regulations of the
Mexican National Administrative Office regarding Public Communications as Referred to in
Article 16(3) of the North American Agreement on Labor Cooperation, published in Mexico's
Official Gazette on April 28, 1995.
On December 17, 2001, Mexico's NAO asked the U.S. NAO for consultations under Article 21
of the NAALC, regarding the issues relating to labor law addressed in Public Communication
MEX 2001-1.
At the request of the petitioners, on October 3, 2002, Mexico's NAO received
representatives from the National Mobilization against Sweatshops (NMASS), one of
the petitioning non-governmental organizations, in order to exchange information and
respond to its concerns regarding Public Communication MEX 2001-1.
In accordance with Article 9 of the Mexican NAO's regulations on public communications,
on November 8, 2002, Mexico's NAO issued the First Report of Review regarding the issues
relating to labor law in the territory of the United States addressed by the petitioners,
and the relationship between those issues and obligations established under the NAALC.
That report was issued one year after Mexico's NAO asked the U.S. NAO for consultations,
a request that had not been answered up to that point. Accordingly, in its report,
Mexico's NAO did not recommend Ministerial Consultations immediately, but rather opened up
an opportunity for dialogue between the STPS and the DOL.
Regarding the petitioners claims that the 1996 reforms relating to workers' compensation
were prejudicial to workers, Mexico's NAO makes no determination, in keeping with Article
2 of the NAALC, which recognizes the right of the Parties to establish internally their
own labor standards and consequently to adopt or modify their labor laws and regulations.
As part of the recommendations contained in the First Report of Review, Mexico's NAO
brought that report to the attention of the DOL so that, in accordance with its
internal procedures, it could clarify the concerns of the petitioners and the public,
and could make a legal determination based on its internal law and practice as to whether the
rights of injured or sick workers have been violated; so that it could define measures to
streamline procedures for granting compensation for occupational illness or injury; and
ensure that employers and local authorities know and effectively apply the law in the area
of:
- prevention of occupational injuries and illnesses;
- compensation in cases of occupational injuries or illnesses; and
- protection of migrant workers.
In addition, Mexico's NAO placed particular emphasis on the subject of migrant workers.
In accordance with the Joint Ministerial Statement between the STPS and the DOL of April 15,
2002 regarding the labor rights of immigrant workers, Mexico's Secretary of Labor and Social
Welfare and the U.S. Secretary of Labor confirmed their commitment to vigorously apply labor
laws in the area of their jurisdiction in order to protect all workers regardless of their
migrant status. Both Secretaries recognized that such workers are among the most
vulnerable.
Mexico's NAO felt that it was necessary to publicize more widely the labor rights of
migrant workers in the U.S., as well as the resources available to such workers through
the bilateral communication channels that the Secretaries promoted in the Joint Ministerial
Statement.
On February 27, 2003, Mexico's NAO received from the U.S. NAO responses on the
consultations for cooperation. These responses described the legislation applicable in New
York State in the area of workers' compensation and the operations and practices of the
New York State Workers' Compensation Board. Regarding the specific questions referring to
the petitioners' arguments, the Board responded that it reserved the right to answer or
issue comments regarding aspects and circumstances of a specific claim, unless it had
the consent of the claimant. The Board's responses focused exclusively on the questionnaire
sent by Mexico's NAO and made no reference to the recommendations or assertions contained
in the report of review.
On April 30, 2003, December 18, 2003, February 4, 2004, and March 10, 2004, Mexico's
NAO asked the petitioners for their comments regarding the various pieces of information sent
to us by the U.S. NAO regarding the subjects addressed in Public Communication MEX
2001-1, as well as the additional information they considered relevant. Mexico's NAO
did not receive any response from the petitioners.
In following up the First Report of Review, on December 19, 2003, Mexico's NAO asked
for consultations with the U.S. NAO regarding the operations and actions of the New
York State Workers' Compensation Board. On February 3, 2002, Mexico's NAO received
a response from the U.S. NAO.
This Second Report of Review discusses issues relating to the application of U.S.
labor law, based on the arguments presented by the petitioners in Public Communication
MEX 2001-1, the pertinent provisions of U.S. labor law, and the obligations of the U.S.
government regarding the effective application of its labor law, pursuant to the
NAALC. In addition, because it supplements the First Report of Review issued by Mexico's
NAO on November 8, 2002, this Second Report of Review only discusses the issues that
remained pending review in the first report.
The review by Mexico's NAO and this Second Report of Review were conducted in the
context of the NAALC signed by the governments of Mexico, the United States, and Canada,
in effect since 1994. The governments agreed to encourage their labor authorities to apply
national labor law effectively. It is to be noted that the commitments made under
the NAALC do not provide for the establishment of common standards in the area of labor
or changes in internal laws, nor do they constitute supranational agencies.
III. U.S. Obligations under NAALC
In accordance with the NAALC, the U.S. government is required to apply U.S. labor
law effectively; to guarantee individual access to proceedings and to ensure that such
proceedings are fair, equitable, and transparent; to publish its laws, regulations,
and procedures; and to promote public information and knowledge regarding its labor law,
in order to protect the labor principles of:
- Prevention of occupational injuries and illnesses (Principle 9). The prescription and
application of standards to minimize the causes of occupational injuries and illnesses
(Articles 3.1 b), d), e), and g); 5.1 a) and d); and 5.2 b) of the NAALC).
- Compensation in cases of occupational injuries or illnesses (Principle 10). The
establishment of a system to provide benefits and compensation for workers or their
dependents in the case of occupational injuries, accidents or death occurring during,
in connection with, or due to employment
(Articles 3.1 g), 3.2, 5.1 d), 5.2, 5.3, 5.5, 5.6, 6.1 and 7 a) of the NAALC).
- Protection of migrant workers (Principle 11). Provide migrant workers in the territory
of any of the Parties the same legal protection as for nationals with respect to
working conditions (Articles 4.1, 4.2 a), 5.1 a) and c), 5.2, and 7.1 a) and b) of the NAALC).
IV. U.S. Obligations under NAALC
4.1 Prevention of occupational injuries and illnesses
In the Public Communication, the petitioners observe that the New York Workers'
Compensation Law was promulgated to encourage employers to maintain a safer and
healthier worksite, since under the workers' compensation system employers with high
rates of occupational injuries or illnesses are penalized with higher insurance premiums.
However, the petitioners indicate that the New York State Workers' Compensation Board's
delay in resolving claims for compensation awards due to occupational injuries or
illnesses results in a failure to maintain a real and effective record of the
number of occupational accidents and illnesses that occur in companies. That delay
leads to the setting and payment of lower premiums by employers and limits the structure
of incentives for preventing occupational injuries and illnesses.
According to information provided by the U.S. NAO, Article 7, Section 110 of the New
York State's Workers' Compensation Law provides that employers must keep records of
injuries or illnesses suffered by workers in the performance of their work. Such records
may be reviewed at any time by the New York State Workers' Compensation Board.
In accordance with this section of the New York State Workers' Compensation Law,
the employer must submit to the New York State Workers' Compensation Board and to
its insurer a report on accidents that cause injuries to workers, as well as
occupational illnesses that require workers to abandon their work duties or need
medical treatment. That report should be submitted within 10 days of the
occupational accident or illness. If the employer refuses to prepare the report
or maintain the records, it will be liable to a criminal sanction of no more than
$1,000 or a fine imposed by the New York State Workers' Compensation Board of no
more than $2,500.
The First Report of Review published by Mexico's NAO on November 8, 2002 noted
that the Mexican NAO had no knowledge of the remedies that affected workers might
have used in the event of failure to comply with the New York State Workers'
Compensation Law in terms of the truthfulness of the report or record of occupational
injuries and/or illnesses. In its responses to the consultations for cooperation on
February 27, 2003, the U.S. NAO did not provide this NAO with information in
this regard. In addition, Mexico's NAO does not know whether the Workers' Compensation
Board has imposed penalties in cases where an employer has refused to prepare or
maintain records of occupational injuries or illnesses, penalties that the petitioners
say are not being imposed.
Based on the foregoing, doubts remain as to how the New York State Workers' Compensation
Law has been applied in terms of the provisions requiring that employers maintain records of
work-related accidents and illnesses that occur in companies and establishing the
sanctions that the competent authority must impose in the event of failure to comply
with this requirement, and its relationship with the prevention of occupational accidents
and illnesses.
4.2 Compensation in Cases of Occupational Injuries or Illnesses
In the Public Communication, the petitioners allege that the New York State
Workers' Compensation Board delays in awarding compensation for claims relating to
occupational injuries and illnesses. The petitioners believe that these delays
are continuous and excessive. They assert that the New York State Workers'
Compensation Board frequently and improperly postpones hearings to determine
the admissibility of claims for occupational injuries and illnesses. They indicate
that these hearings are postponed because the physicians or witnesses for the
employers or their insurers fail to appear for the hearings, or the hearings
are postponed to allow employers or their insurers more time to obtain medical
reports or documentation for their defense.
The petitioners argue that the interval between one hearing and the next is
often more than one year, and during that time injured workers have no work and
receive no compensation from the New York State Workers' Compensation Board. They
claim that the fact that the decisions of the New York State Workers' Compensation
Board are subject to appeal by the insurer or the employer leads to extended
suspensions of workers' compensation payments and medical reimbursements.
The petitioners state that they are unclear regarding what remedies, if any,
are available to workers to keep proceedings from being unnecessarily complicated
or from involving unreasonable costs or time periods, or unjustified delays.
They also mention that they are not informed in writing of the grounds for
postponements.
The petitioners claim that the New York State Workers' Compensation Board
suspends the payment of compensation well before it issues a final decision.
This generally happens at the request of insurers, which do not submit substantive
evidence to justify the suspension of those payments. They feel that, given the
option of continuing with difficult and hazardous work or leaving the labor
market with the hope of obtaining compensation for occupational risk, they
prefer to continue working despite being injured or sick.
The petitioners indicate that the 1996 reforms to the U.S. Workers' Compensation
System have led to reductions in the premiums paid by employers and increases in
the earnings of insurers. They allege that the authorities in New York have exerted
pressure to keep the amount for calculating compensation at $40.00 per week, one
of the lowest levels in the U.S.
In accordance with Section 13(a) of the New York State Workers' Compensation Law,
the employer is required to pay as soon as possible for an injured worker's
medical treatment, surgical treatment, optometry services, crutches, eyeglasses,
and other devices, as required by the nature of the injury or the recovery process,
as well as necessary nursing or hospitalization services and prostheses.
Under the terms of the New York State Workers' Compensation Law, the application
to obtain compensation for occupational injuries or illness may be submitted to the
employer or the New York State Workers' Compensation Board at any time after seven
days have elapsed since the event that caused the worker's disability or injury,
or at any time after his or her death. The New York State Workers' Compensation
Board will conduct or order the corresponding investigation and, at the request
of any of the parties, will schedule a hearing.
Within 30 days following submission of the application to obtain workers' compensation
or following the hearing, the New York State Workers' Compensation Board will rule
on the admissibility of the payment of compensation and will record that ruling with
the Chairman of the New York State Workers' Compensation Board. The Chairman of the
New York State Workers' Compensation Board will notify the parties of the ruling.
In accordance with the New York State Workers' Compensation Law, the State Board must
penalize employers and/or their insurers when they prolong the hearings period by using
delaying tactics. If the issues are not resolved within two years following their submission
to the Board, the Board Chairman may order the case transferred to an expedited hearings
section. In this section, disputes are settled in a single hearing.
The New York State Workers' Compensation Law provides that the decisions or rulings
of the New York State Workers' Compensation Board are final and binding, unless reversed
or modified on appeal. Within 30 days following notice of the decision or ruling,
either party may submit a brief to the New York State Workers' Compensation Board
seeking modification or review of that decision or ruling. The New York State Workers'
Compensation Board will resolve the matter as soon as possible, justifying
its decision. That decision can be appealed either before the full New York State
Workers' Compensation Board or a third department of the appeals division of the
New York State Supreme Court. In both cases, the appeal must be filed within 30
days following notice from the New York State Workers' Compensation Board
regarding its decision on the appeal.(1)
Regarding the petitioners' argument that the insurance companies and the Board may
delay the award of compensation for occupational injuries and illnesses, this assertion
is consistent with that made by Linza Ford, Executive Director of the Injured
Workers Coalition of New York State, a non-profit organization that provides legal
assistance to injured workers in New York State, who estimates that the
average waiting time for receiving workers' compensation in the Brooklyn office,
New York's largest office, is four years, but the process may also take
five or more years.
In this regard, the First Report of Review from Mexico's NAO left pending and the
U.S. NAO failed to provide a response to the information requested by Mexico's NAO in
the consultations for cooperation regarding waiting times under the law for award of
a compensation claim. In this regard, the U.S. NAO only referred to the prescribed
periods during which sick or injured workers must submit their claims, and indicated
that in 2001, cases heard by the Board were resolved in an average of 162 days
after submission. It did not provide information on the legal terms for the compensation
award process.
Regarding the petitioners' argument that the Board's judges block the claims of
workers by allowing companies and/or insurance companies to argue anything in order
to justify their refusal to pay workers' compensation and provide medical treatment,
this assertion is in line with the observation made by the non-governmental organization
National Mobilization Against Sweatshops, in its It's About TIME! campaign,
citing a study conducted by the Mt. Sinai Occupational Health Clinic,
a medical and research center attached to the Mount Sinai School of Medicine in New
York. The study notes that for 80% of patients with repetitive-stress syndrome the
claim for workers' compensation is not initially accepted by the insurance companies,
as they reject the medical evaluations submitted by the workers and use opinions
produced by physicians hired by the insurance companies.(2)
Similar arguments are found in the 1998 report by the American Federation
of Labor and Congress of Industrial Organizations (AFL-CIO) and the organization
of occupational health and safety unions, workers and professionals called the New
York Committee for Occupational Safety and Health, Unjust Treatment: Independent
Medical Examinations & Workers Compensation in New York State.(3) According to
this report, each year 500,000 occupational injuries or illnesses are reported
to the New York State Workers' Compensation Board. Thousands of these cases are
challenged by insurance companies for reasons that are frequently far removed
from true medical analysis. The report indicates that the adjudication processes
are tortuous, since the insurance companies systematically dispute the degrees of injury
or illness, even when the Board has already accepted other similar cases.
The report by the AFL-CIO and the New York Committee for Occupational Safety
and Health disputes the impartiality of these independent medical examinations
(IMEs), since the doctors hired by the insurance companies issue biased diagnoses.
Based on the initial IMEs, the insurers can unilaterally, without any hearing and
without prior notice, suspend the payment of benefits or medical treatment.
Although under the New York State Workers' Compensation Law a worker may request
a Board hearing to appeal the insurance company's decision, it may take between
six weeks and six months to schedule that hearing. The answers and information
provided by the U.S. NAO make no reference to the IMEs or the terms under which
appeals against insurance company decisions must be resolved.
Some of the irregularities the report points out with respect to IMEs are:
(i) the legislation governing the IMEs is practically non-existent; for example,
they may be performed by doctors not licensed in New York; (ii) the IMEs are
performed outside clinical or appropriate settings; (iii) the IMEs are
unprofessional, do not consist of a serious medical study, and in most cases last
no more than 20 minutes; (iv) the worker is not allowed to bring witnesses, even
a spouse; (v) many workers who do not speak English have problems communicating with
the doctors; (vi) doctors are not specialists in occupational illnesses or injuries.
Given the increasing demand for IMEs, the insurance companies get doctors through
subcontractors without directly certifying their medical qualifications.
The information provided by the U.S. NAO does not specify whether the New York State
Board has ever imposed penalties on employers or insurance companies that prolong the
hearings period by using delaying tactics.
Regarding the petitioners' argument that the New York State Workers' Compensation
Board suspends the payment of compensation for occupational hazards before issuing
a decision or ruling, the U.S. NAO reported that pursuant to Section 23 of the
New York State Workers' Compensation Law employers or their insurers may only
suspend the payment of workers' compensation when the Board's decision is
being appealed. To request suspension of payment, the employer or insurer must
formally submit the request to the Board.
According to the AFL-CIO report cited above, insurers may unilaterally, without any
hearing and without prior notice, suspend the payment of benefits or medical treatment
based on what is determined in the IMEs performed by doctors hired by the insurance
companies.
Mexico's NAO found that in March 1998 the United States Court of Appeals for the
Third Circuit in Pennsylvania decided in the Barnett v Sullivan case that insurance
companies violate constitutionally guaranteed due process rights when they act as
an arm of the state and unilaterally suspend the payment of compensation without any
hearing.
Regarding the petitioners' claims that the amounts and maximum payment periods
for compensation for occupational injuries or illnesses have declined, according to
information provided by the U.S. NAO, Article 2, Section 15 of the New York State
Workers' Compensation Law provides the amounts and payment periods for total
permanent disability, total temporary disability, partial permanent disability,
and partial temporary disability.
The non-governmental organization, the National Mobilization against Sweatshops,
a petitioner in the Public Communication, alleges that the New York State workers'
compensation system does not provide sufficient financial assistance and medical care
to workers who are sick or injured due to their employment. It indicates that the
New York State Workers' Compensation Law is one of the state laws in the U.S.
with the lowest rates of compensation for disability (a maximum of $400 per week
and a minimum of $40 per week).(4) In contrast, the system does allow for the
excessive enrichment of insurance companies. Alone these same lines, a report
from the National Association of Insurance Commissioners noted that in 1994 insurance
companies in New York State collected two million dollars in workers' compensation
insurance premiums, from which they paid out only one million dollars in workers'
compensation and medical expenses.(5)
Mexico's NAO noted that the Work Loss Data Institute, an independent private
company that develops databases on health and productivity in the U.S., published
a study in February 2003 called State Report Cards for Worker's Comp,(6)
in which state compensation systems are ranked according to their performance. That
study is based on the survey of occupational injuries and illnesses conducted by the
OSHA Bureau of Labor Statistics in 2000. The study includes six variables: rates of
incidence, worker absenteeism, average duration of disabilities, delays in recovery
rates, key conditions (lower back problems and carpal tunnel syndrome). Each
state is rated according to these variables. New York State obtained the
lowest rating.
Based on the foregoing, doubts remain as to whether the actions of the New York
State labor authorities were in keeping with U.S. government commitments under
the North American Agreement on Labor Cooperation (NAALC), in that the petitioners'
arguments are consistent with various reports or studies issued by non-governmental
organizations, medical and research centers, as well as unions with respect to
ensuring that proceedings before New York State labor authorities are fair,
equitable, and transparent.
These reports or studies by non-governmental organizations, medical and
research centers, and unions question the effective application of the New York
State Workers' Compensation Law on the part of the competent labor authorities
in terms of the waiting times for adjudication of compensation claims, penalties
imposed on employers when they use delaying tactics to improperly prolong hearings
on compensation awards, and the actions of the competent authority regarding appeals
from insurance companies to deny compensation to workers suffering occupational
injuries or illnesses. In addition, it is not clear what remedies are available
to workers, whether they use them, and whether migrant workers know about them in
cases where insurance companies improperly suspend the payment of benefits or medical
treatment.
Regarding the petitioners' claims that the amounts and maximum periods for
payment of compensation for occupational injuries and illnesses have declined,
although data were identified in studies indicating that these amounts are low
compared to other states in the U.S., it is recognized that such amounts are
established in the New York State Workers' Compensation Law. Based on the foregoing,
as established in Article 2 of the NAALC, which recognizes the right of the Parties to
establish internally their own labor standards and consequently to adopt or modify
their labor laws and regulations, Mexico's NAO makes no determination.
4.3 Protection of Migrant Workers
The petitioners assert that some workers who qualify to receive workers' compensation
do not quality to receive another type of government benefits due to their migrant status.
They allege that workers of foreign origin who do not speak English are unable to
understand what happens in the hearings, since the translation services are inadequate,
insufficient, or non-existent.
According to the petitioners, most foreign workers who suffer occupational injuries
or illnesses in New York State do not seek help from their respective consulates
because they believe the competent authority is the New York State Workers'
Compensation Board and that the consulates could not help them.
The U.S. NAO reported in its responses to the consultations for cooperation of
February 27, 2003 that all migrant workers, including those who have obtained
citizenship and residents and non-residents enjoy the same rights that the New
York State Workers' Compensation Law grants to U.S. workers.
In accordance with the Joint Ministerial Statement between the STPS and the DOL of
April 15, 2002 regarding the labor rights of immigrant workers, Mexico's Secretary
of Labor and Social Welfare and the U.S. Secretary of Labor confirmed their
commitment to vigorously applying labor laws in their area of jurisdiction
in order to protect all workers, regardless of their migrant status.
The petitioners' arguments are consistent with the assertions of a newspaper
investigation to the effect that migrant workers wait months or sometimes years to
receive workers' compensation or medical treatment. There are also data that
point to the existence of a series of obstacles like language, cultural
differences, and a complex bureaucracy that keep such workers from receiving benefits.
These assertions are also supported in a study by the Mt. Sinai Clinical
Center for Occupational and Environmental Medicine, a specialized department of the
Mount Sinai School of Medicine in New York, regarding low-wage workers in New
York's manufacturing industry, which employs mostly migrant workers. The study
concludes that workers have to wait at least two years to see results on their
claims before the Board. The same study found that most workers, 95% of whom
are migrants, received no compensation at all during the time they were
injured.(7)
According to that study, the main problem facing migrant workers, particularly undocumented
workers, is that most of them are hired for temporary work as laborers, are paid directly in
cash, and cannot prove their employment relationship. They often return to their native
countries with no compensation at all.
Regarding protection of migrant workers, although the U.S. NAO indicated that these workers
enjoy the same rights as U.S. workers under the New York State Workers' Compensation Law, there
are arguments regarding serious obstacles such as language, cultural differences and a complex
bureaucracy that prevent these workers from enforcing their rights. Thus, most of them receive
no compensation at all for occupational injuries or illnesses.
The U.S. NAO provided Mexico's NAO with information regarding a free telephone number the New
York State labor authority established to inform workers about their rights in Spanish. Mexico's
NAO believes it would be useful to know how these services have operated and whether they have
been effective in informing workers of their right to receive compensation when they are injured
or become sick due to their work, regardless of their migrant status, and whether this has had
any effect on allowing migrant workers to enforce that right.
V. Recommendation
The review conducted by Mexico's NAO and its reports of review were carried out in the
context of the NAALC. The review does not seek to create supranational mechanisms, since under
the NAALC it is not the role of NAOs to judge or modify the legislation of the other Parties.
The purpose of the reports of review by Mexico's NAO, pursuant to the NAALC, is to bring to the
attention of the U.S. labor authorities the issues relating to the alleged failure to comply
with labor law as presented in Public Communication MEX 2001-1.
Based on the technical consultations held with the U.S. NAO in February 2003 and February
2004, as well as available public information, Mexico's NAO has determined that:
Regarding prevention of occupational injuries and illnesses, doubts remain regarding how the
provisions of the New York State Workers' Compensation Law have been applied. These provisions
require employers to keep records of occupational accidents and illnesses that occur in their
companies and establish penalties that the competent authority must impose in the event of
failure to comply with this requirement, and how this relates to the prevention of occupational
accidents and illnesses.
Regarding compensation in the case of occupational injuries and illnesses, doubts remain as
to whether the actions of the New York labor authorities were in keeping with the U.S.
government's commitments under the North American Agreement on Labor Cooperation (NAALC), in
that the petitioners' arguments are consistent with various reports or studies issued by non-
governmental organizations, medical and research centers, as well as unions, with respect to
ensuring that proceedings before the New York State labor authorities are fair, equitable, and
transparent.
The reports or studies by non-governmental organizations, medical and research centers, and
unions question the effective application of the New York State Workers' Compensation Law by the
competent labor authorities with respect to the waiting times for awarding compensation claims,
the penalties to be imposed on employers when they use delaying tactics to improperly prolong
hearings on compensation awards, and the actions of the competent authority regarding appeals
from insurance companies to deny compensation to workers who are injured or become ill due to
their work.
In this regard, the First Report of Review from Mexico's NAO left open and the U.S. NAO did
not provide an answer to the information requested by Mexico's NAO in the consultations for
cooperation on the subject of legal waiting times for compensation claim awards. In this regard,
the U.S. NAO referred only to the prescribed periods for sick or injured workers to submit their
claims and indicated that in 2001 the cases heard before the Board were resolved in an average
of 162 days after being submitted. It did not provide information on the legal terms for the
compensation award process.
In addition, the information provided by the U.S. NAO does not specify whether the New York
State Board has ever imposed penalties on employers or insurance companies that prolong the
hearings period by using delaying tactics. Doubts also remain regarding the remedies available
to workers, whether they use them, and whether migrant workers know about them, in cases where
insurance companies improperly suspend the payment of benefits or medical treatment.
Regarding the petitioners' claims that the amounts and maximum payment periods of
compensation for occupational injuries and illness have declined, although data were identified
in studies indicating that these amounts are low compared to other states in the U.S., it is
recognized that these amounts are established in the New York State Workers' Compensation Law.
Thus, pursuant to the provisions of Article 2 of the NAALC, which recognizes the right of the
Parties to establish internally their own labor standards and consequently to adopt or modify
their labor laws and regulations, Mexico's NAO makes no determination.
Regarding protection of migrant workers, Mexico's Secretary of Labor and Social Welfare and
the U.S. Secretary of Labor confirmed in the Joint Ministerial Statement between the STPS and
the DOL on the labor rights of immigrant workers (2002) their commit to vigorously apply labor
laws within their sphere of jurisdiction in order to protect all workers regardless of their
migrant status. The U.S. NAO indicated that these workers enjoy the same rights as U.S. workers
under the New York State Workers' Compensation Law. However, there is evidence of serious
obstacles such as language, cultural differences and a complex bureaucracy that prevent these
workers from enforcing their rights. Thus, most of them receive no compensation for occupational
injuries or illnesses.
The U.S. NAO provided information regarding a free telephone number that the New York labor
authority established to inform workers about their rights. Mexico's NAO believes it would be
useful to know how these services have operated, whether they have been effective in informing
workers about their right to receive compensation when they are injured or become ill due to
their work, regardless of their migrant status, and whether this has had the effect of allowing
migrant workers to enforce that right.
For reasons of confidentiality, the U.S. NAO made no reference to the status of the
compensation proceedings of the petitioners. Thus, Mexico's NAO does not have sufficient
information to establish the relationship between failures by U.S. federal labor authorities and
New York State labor authorities to effectively apply labor law and U.S. obligations under the
NAALC.
Mexico's NAO feels that it needs to have more in-depth knowledge of the relationship between
the issues raised by the petitioners in Public Communication MEX 2001-1 and progress made on the
actions recommended in the report of review issued by Mexico's NAO on November 8, 2002.
Based on the foregoing and on Article 9 of the Mexican NAO's regulations on public
communications, Mexico's NAO recommends that Mexico's Secretary of Labor and Social Welfare
request Ministerial Consultations with the U.S. Secretary of Labor, pursuant to the provisions
of Article 22 of the NAALC, in order to address issues relating to the prevention of
occupational injuries and illnesses; compensation in cases of occupational injuries or illnesses
; and the protection of migrant workers in the U.S.
END NOTES
1. Article 2, Section 23, New York State Workers' Compensation Law.
2. It's About TIME! www.nmass.org/nmass/wcomp/workerscomp.html
3. Published on the website of the New York Committee for Occupational Safety and Health: www.nycosh.org/IME_Report1.html
4. www.nmass.org/nmass/wcomp/workerscomp.html
5. Source: National Association of Insurance Commissioners, "Report on Profitability By Line By State," 1998.
6. Official Disability Guidelines www.odg-disability.com/pr_repsrc.htm
7. Newsday, New York, published on July 24, 2001 on its website www.newsday.com/news/ny-work-comp724,0,4905984,print.story
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