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Understanding the New CPAP Program Effective October 1, 2025

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Steven Bell, Vice President, Lovell Safety Management Co., LLC

If you’re a contractor in New York, you’ve likely heard of the Construction Classification Premium Adjustment Program (CPAP). For years, CPAP has provided a way for contractors who pay higher-than-average wages to receive premium credit on their workers’ compensation policies. The goal has always been simple: rewarding employers who invest in skilled, highly compensated workers.

Beginning with policies effective October 1, 2025, and later, the New York Compensation Insurance Rating Board (NYCIRB) is rolling out a redesigned CPAP. These changes will impact on how credits are calculated, how data is collected, and how contractors can ensure they don’t miss out on valuable premium savings.

Lovell is committed to making sure our contractor clients understand the changes, meet the new requirements, and receive every dollar of credit they’re eligible for. Here’s what you need to know.

Why the Change?

The old CPAP process relied heavily on employers filling out applications and submitting wage information once a year. Participation wasn’t as high as it should have been, and the single wage threshold didn’t always reflect the realities of today’s construction market.

The NYCIRB redesigned CPAP to:

  • Increase participation by making it automatic through the audit process.
  • Shift the burden to carriers, reducing paperwork for contractors.
  • Better compensate wage differences by applying credits at the class code level, not across the board.

In short: this is a modernization of CPAP that should make it easier for more contractors to benefit.

What’s Changing in CPAP

Here are the key updates contractors need to keep in mind:

  • No More CPAP Application
    You won’t have to apply for CPAP anymore. Instead, carriers (like NYSIF) will gather wage and hour data during your audit and submit it to the NYCIRB automatically.
  • Credits Based on Annual Payroll
    Instead of looking at a single quarter, credits will now be based on your entire year of payroll data, making results more accurate.
  • Class Code-Specific Wage Thresholds
    Gone are the days of one-size-fits-all wage tables. Credits will now be calculated for each eligible class code, using average hourly wages compared to prevailing NYS Department of Labor rates.
  • Estimated Credits at Quotation
    For the first time, carriers will calculate an estimated CPAP credit up front at the time of quotation, provided you submit the required data.
  • Final Credit Determined at Audit
    Just like with other parts of your policy, the final CPAP credit will be determined after the annual audit when your actual payroll and hours are verified. NYCIRB will finalize the number, and it will be applied at that point.

How Contractors Can Secure Their CPAP Credit

While CPAP is now built into the system, there are still important steps you’ll need to take to make sure your estimated credit is applied before your audit.

Deadlines Matter

To have your estimated credit applied and your policy rebilled before audit, you must:

  • NYSIF policyholders must submit your CPAP estimate within 6 months of your policy’s effective date.
  • If you miss this deadline, your credit will only be applied once the final audit is completed.

What You’ll Need to Submit

To calculate your estimate, contractors will need to provide:

  1. Total payroll (straight time only) for all class codes.
  2. Number of employees for CPAP-eligible class codes and/or
  3. Average hourly wage for each CPAP-eligible class code on the policy.

 

 

Two Submission Options

Lovell and NYSIF are making it simple:

  • Complete the Excel spreadsheet provided by Lovell, or
  • Use the NYSIF Online CPAP Estimator.

How Lovell Is Helping

At Lovell, we know how valuable these credits can be for contractors. That’s why we’re taking a proactive approach:

  • Advance Notices – About 60 days prior to renewal, we’ll be sending notices (with the payroll spreadsheet attached) to clients who may qualify.
  • Hands-On Guidance – Our team will be available to help you complete the spreadsheet, use the estimator, and ensure your data is submitted correctly.
  • Ongoing Support – If there are any discrepancies between your estimate and what NYCIRB calculates at audit, we’ll coordinate with NYSIF on your behalf.

The bottom line: while CPAP is changing, you won’t have to navigate it alone.

What Contractors Should Do Now

Right now, no action is required. But as October 1, 2025 approaches, contractors should:

  1. Stay tuned for updates. Lovell will continue to provide guidance as NYCIRB finalizes implementation details.
  2. Gather payroll records. Accurate data will be the key to securing your CPAP credit.
  3. Be ready to respond. When you receive Lovell’s notice and spreadsheet, complete it promptly so you don’t miss the six-month window for an estimated credit.

Why This Matters for Contractors

Construction margins are often tight, and workers’ compensation is a significant expense. CPAP credits can add up to real savings—sometimes thousands of dollars annually—for employers who pay competitive wages.

The redesigned program is intended to make those savings more accessible and better aligned with today’s labor market. By working with Lovell and providing the right data on time, you can make sure you capture every bit of credit you deserve.

 

Final Thoughts

The new CPAP program is a positive change for New York contractors. It reduces paperwork, provides more accurate credits, and ensures high-wage employers are rewarded. But the new system also comes with new deadlines and data requirements that can’t be overlooked.

Lovell is here to guide you every step of the way—from sending the right forms to coordinating with NYSIF and ensuring your credit is applied.

Effective October 1, 2025, CPAP changes the game. Make sure you’re ready to play —and to save.

If you have questions about how these changes may impact your business, don’t hesitate to reach out to a Lovell representative at 1-800-556-8355.

 

Don’t Let Hackers Delay Your Projects

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OneGroup

Cyberattacks threaten your business operations, revenue stream, intellectual property, client data, and reputation. Protect your company from digital hazards.

In the construction industry, cybersecurity is no longer just an IT issue, it’s a business continuity issue. As firms adopt digital tools like project management software, drones, smart machinery, and cloud-based collaboration platforms, they become increasingly exposed to cyber threats. Construction companies often manage large volumes of sensitive data, including architectural plans, financial records, employee information, and client contracts. A breach can disrupt job site operations, delay timelines, compromise safety, and damage relationships with clients and subcontractors.

Cyberattacks are relentless. A 2024 Cloud Security Report by Check Point revealed that 73% of cybersecurity teams received 10 or more security alerts daily; 61% reported security incidents in the past year. Hacked once? Expect a return visit. According to IBM’s 2022 Cost of a Data Breach Report, 83% of companies experiencing a data breach were hit multiple times.

The cost of recovering from a cyberattack is more than paying a ransom. In 2024, cybercriminals hacked Change Healthcare, compromising the health data of one-third of Americans. Change Healthcare paid the hackers $22 million in Bitcoin to unlock data, without a guarantee that the data hadn’t been copied or sold. Experts estimate it will cost nearly $3 billion to cover fines, credit monitoring services, lawsuits, reputational damage, and network reconstruction. That’s on top of the ransom.

Cyberattacks can lead to bankruptcy. A 157-year-old college in rural Illinois was forced to close after a ransomware attack locked them out of their data. They never recovered from the lost enrollments and network damage.

Why the Construction Industry Is a Growing Target

Construction companies are increasingly vulnerable to cyber threats due to their reliance on digital tools, mobile devices, and cloud-based project management platforms. From blueprints and bid documents to subcontractor agreements and client data, the industry handles sensitive information that hackers find valuable.

Key vulnerabilities include:

  • Project delays and downtime: A ransomware attack can halt operations, delay timelines, and inflate costs.
  • Third-party risk exposure: Construction firms often work with multiple vendors and subcontractors, increasing the risk of compromised networks.
  • IoT and smart equipment: Connected devices on job sites can be entry points for cybercriminals.
  • Employee data and payroll systems: Hackers target HR systems for personal data and financial access.

What a Cyber Insurance Policy Can Do for Your Business

A well-structured cyber policy can help with:

  • Lost income due to project delays
  • Customer and subcontractor data breach notifications (legally required in most states)
  • Free credit monitoring for affected individuals
  • Legal defense, state fines, damages, and settlement awards
  • Reputational damage and public relations support
  • Restoration of computers, mobile devices, and networks
  • Technology improvements to prevent future hacks
  • Ransomware attacks
  • Breach response plans

OneGroup can help you decode complex cyber jargon and match you with a customized policy tailored to the construction industry.

Apply in Confidence

Insurance companies will scrutinize your cybersecurity. They’ll ask questions like:

  • How much personal and project data do you collect and store, including paper files?
  • Do you use antivirus software, strong passwords, and multifactor authentication?
  • Do you have a written cyber incident response plan?

Don’t let cyber threats bring your construction projects to a halt. Protect your business, your data, and your reputation before an attack hits. Reach out to Brett Findlay by calling 315-480-7027, he’ll connect you with a specialist who understands the unique risks facing contractors and can help you prepare with confidence.

Six Pertinent Provisions of the OBBBA for Construction Companies

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Nicholas L. Shires, CPA, Dannible & McKee, LLP

The One Big Beautiful Bill Act (OBBBA) introduces sweeping changes with significant implications for construction business owners and their leadership teams. As companies evaluate the legislation, it’s important to focus on the provisions most relevant to day-to-day operations. Here are six key areas to study.

  1. Accounting Exemption

For tax years beginning on or after July 4, 2025, contracts entered into for residential construction projects, per the amended definition under the OBBBA, generally qualify for an exception to the percentage-of-completion method of accounting.

That means, if eligible, you can use the completed-contract method (CCM) or other permissible methods. Under the CCM, for example, you can defer income until a project is substantially completed, which generally improves cash flow.

  1. Accelerated Depreciation

The OBBBA includes multiple provisions that will allow you to accelerate depreciation on eligible capital expenditures. These breaks can also improve cash flow, as well as make new investments in equipment and machinery more viable.

The law makes permanent 100% first-year bonus depreciation for qualified new and used assets acquired and placed in service after January 19, 2025. It also increases the Section 179 expense deduction limit to $2.5 million, with the phaseout threshold raised to $4 million. Those figures are effective for 2025, with annual inflation adjustments going forward.

In addition, the OBBBA creates a temporary 100% deduction for the cost of building “qualified production property” — for instance, facilities used to fabricate materials. This could boost demand for projects related to manufacturing. Construction must have begun after January 19, 2025, and before January 1, 2029, and the property must be placed in service before 2031.

  1. Bigger Business Interest Deductions

If you finance capital purchases, you may be able to deduct more of the interest under the OBBBA. The business interest deduction is generally limited to 30% of your adjusted tax income (ATI). Since 2022, though, deductions for depreciation, amortization or depletion were not added back to taxable income when calculating ATI. So, ATI was effectively measured based on earnings before interest and taxes, not earnings before interest, taxes, depreciation and amortization (EBITDA).

Beginning with the 2025 tax year, the OBBBA provides that ATI will again include depreciation, amortization and depletion in the calculation. In other words, ATI will revert to being calculated based on EBITDA. This will effectively increase the ATI base, generally raising the allowable business interest deduction.

  1. Distressed Community Construction Incentives

The quality opportunity zone (QOZ) program generally allows taxpayers to defer, reduce or exclude unrealized capital gains reinvested in qualified opportunity funds (QOFs). These funds invest in designated distressed communities across the country.

The OBBBA establishes a permanent QOZ policy that enhances the original program, which had been slated to sunset after 2026. The law also creates a new type of QOF for rural areas. Plus, the OBBBA permanently enhances the low-income housing tax credit. In sum, these programs could drive higher construction activity — including affordable housing and commercial development.

  1. Reduced Taxation of Overtime

For tax years 2025 through 2028, the OBBBA allows employees to deduct up to $12,500 ($25,000 for joint filers) of qualified overtime pay. This tax break is available regardless of whether a taxpayer itemizes. However, it begins to phase out when an individual’s modified adjusted gross income exceeds $150,000 (or $300,000 for joint filers).

The boost to take-home pay may make overtime more enticing to existing construction workers and job seekers considering the industry. But it also requires employers to track and report the amount of qualified overtime pay. What’s more, overtime pay will remain subject to payroll taxes and state income taxes.

  1. Elimination of Clean Energy Incentives

The OBBBA targets many of the clean energy incentives created or enhanced by the Inflation Reduction Act — including some that have spurred construction plans and projects. For instance, it eliminates the Sec. 179D energy-efficient commercial building deduction for buildings or systems on which construction begins after June 30, 2026.

The new law also eliminates the Sec. 45L new energy-efficient home credit for eligible contractors. The credit was due to expire in 2033, but it’s now available only for homes acquired on or before June 30, 2026.

And That’s Not All

The provisions highlighted here are only a portion of the changes in the OBBBA that could impact your construction business. Acting now is critical to identify the most relevant tax-law changes and take full advantage of the tax breaks available before opportunities are missed.

Nicholas L. Shires, CPA, is the partner-in-charge of tax services at Dannible & McKee, LLP, a certified public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, as well as Tampa, FL. With over 20 years of experience, Nick provides tax and consulting services to a wide range of clients, with a focus on the construction industry. For questions regarding the tax provisions of the One Big Beautiful Bill Act (OBBBA), contact Nick at nshires@dmcpas.com or (315) 472-9127. Learn more @ DMCPAS.com.

2025 Year in Review

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Earl R. Hall Executive Director – Syracuse Builders Exchange

As the fourth quarter of the year begins, we at the Syracuse Builders Exchange (SBE) reflect on the success of the past 12 months, as we begin to focus on 2026 with optimism and excitement.

The past year marked another period of record growth and achievement for SBE and our members. Guided by our mission to acquire and disseminate important industry information, further the best interest of the regional building and construction industry, and to foster and develop relationships within the industry, SBE delivered measurable value across our wide range of membership benefits and services throughout the year.

Acquiring and Disseminating Information

Through Syrabex’s e-plan room, weekly e-bulletins, periodic emails, and Construction Contractor Magazine, SBE acquired and disseminated timely and important information construction industry employers and their employees rely upon every day.  Whether it’s construction projects in the planning stages, projects actively bidding, bidders lists, contract awards, new federal or state legislation, information from our many professional partners or other information contractors need to know, SBE delivered using a wide range of communication mediums.

Education and Safety Training

SBE’s education and safety training programs reached both record participation and course offerings, equipping members with the skills and knowledge to navigate evolving industry technologies such as Building Information Modeling, safety standards, and general business practices. The Association delivered workshops, seminars, and certifications that not only advanced individual careers but helped employers provide a safer and more efficient working environment both on the job site and in the office.

Safety remained a top priority, with new training modules, additional training resources and instructors, and industry-wide campaigns designed to reduce incident rates for our member firms and the industry in general. These efforts underscored SBE’s commitment to not only our member employers, but ensuring every worker returns home safely at the end of the day.

Membership Growth and Engagement

Membership significantly expanded this past year, led by the migration of 100 new members from the Mohawk Valley Builders Exchange.  Absent those new members, SBE still experienced membership growth, driven by out-of-area contractors looking to take advantage of the Association’s services and the abundance of future construction opportunities central New York will offer over the next decade.

Sustained membership growth reflects the value of SBE’s services, the strength of our membership and the tremendous services our staff delivers every day to our member employers and their employees. Engagement through events, emails, phone calls, and electronic/digital platforms fostered stronger business relationships between our staff and members.

Today, SBE remains New York State’s oldest and largest construction industry Association with approximately1,070 member firms.  Never in the 153-year history of the Association has SBE had more members or more benefits and services.

Networking and Social Event

During the year, SBE provided the most networking and social events in the history of the Association, delivering:

  • Multiple “meet and greets” in the Utica region
  • Two sold-out golf tournaments (Syracuse and Utica)
  • Clay Sport Shooting for Charity
  • Meet the Generals
  • Clambake
  • Meet the MWBE/DBE/SDVO Contractors
  • Cabin Fever (Utica)
  • Two Construction Career Day events (Syracuse and Utica)

These events are vital to SBE’s membership as they strengthen professional relationships, foster collaboration, and create opportunities for members to share knowledge and best practices. These gatherings help connect contractors, suppliers, designers, and industry leaders, often leading to new business partnerships and project opportunities. They also build a sense of community within the industry, allowing members to exchange ideas, discuss challenges, and celebrate achievements together. Ultimately, SBE’s networking and social events enhance the value of one’s membership by promoting growth, visibility, and long-term success for both individuals and companies.

Looking Ahead to 2026

As SBE celebrates this year’s successes, we remain focused on future opportunities and challenges. Our priorities include partnering and collaborating with industry partners to advance workforce development initiatives, embracing technology innovation and new industry standards in our education and safety programs, enhancing the functionality within the e-plan room by applying Artificial Intelligence features to deliver faster and more effective outcomes for our end-users, delivering quality social and networking events, promoting New York State’s only construction industry Multiple Employer Pension Plan (MEP) and continuing to be a strong advocate for SBE’s member employers and the industry.

SBE continues to have a meaningful impact on our contractors, their employees, and our regional community and industry partners.  As we look forward to building on this momentum in 2026, we are reminded that the success of the Association is the result of our loyal, diverse, and dedicated member firms.  On behalf of the SBE staff and Board of Directors, it has been a pleasure to service construction industry employers and their employees during the year.  

Benefits of Content Marketing

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Increased Brand Awareness

Consistently publishing valuable and relevant content helps to increase visibility. As your content reaches a larger audience, more people become familiar with your brand.

Establishes Authority and Expertise

By providing high-quality, informative content, you position your business as an authority in your field. This helps build trust and credibility with your audience.

Improved SEO and Organic Reach

Quality content that is optimized for search engines (SEO) can help your website rank higher on search engine results pages (SERPs). This boosts your organic traffic.

Engagement with Audience

Content marketing encourages interaction with your audience, whether through comments, shares, or likes. This helps in building a community around your brand.

Lead Generation

Well-crafted content can help attract potential customers and drive them down the sales funnel. Offering valuable content, like whitepapers or ebooks, in exchange for email subscriptions can be an effective way to gather leads.

Cost-Effective Marketing

Compared to traditional forms of advertising, content marketing can be a more affordable long-term strategy. Once content is created, it can continue to generate value over time without ongoing costs.

Better Customer Relationships

Content allows you to directly communicate with your audience, answer their questions, and address their pain points. This strengthens customer loyalty and satisfaction.

Supports Other Marketing Channels

Content marketing supports various other marketing efforts, like printed media, social media, email marketing, and paid ads. For example, blog posts can be shared on social media, driving traffic to your website.

Increased Conversion Rates

Engaging and relevant content can help move prospects closer to conversion by addressing their specific needs and demonstrating how your products or services can solve their problems.

Long-Term Results

Content that continues to provide  value can work for you over time, generating leads and traffic long after it’s published. Blog posts, videos, and infographics can attract new audiences months or even years after they’re created.

Builds Trust and Relationships

By offering useful, honest, and relevant information, your brand can build long-lasting relationships with its audience. This trust can eventually convert into higher customer loyalty and advocacy

In summary, content marketing helps you build stronger relationships with your audience, boosts your printed and online visibility, and can be more cost-effective than traditional advertising, all while providing long-term benefits.

Patriot Sons USA: A Certified SDVOB, Providing Experienced Asbestos Abatement

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By Elizabeth Landry

Frederick W. Dambach, President and CEO of Patriot Sons USA, has spent a lifetime in service—first to his country, and now to the health and safety of our communities. A U.S. Army veteran who served during both the Vietnam War and Operation Desert Storm, Dambach comes from a proud military family with deep-rooted traditions of service. His father served in World War II, and many of his siblings, cousins, and even his son have followed similar paths.

Throughout his civilian career, Dambach held a diverse range of roles—from working in power plants and building submarines to managing an electrical supply branch, selling computers, and serving as a high-voltage lineman. But it wasn’t until 2015, encouraged by his son, that he charted a new course. He enrolled in the Entrepreneur Bootcamp for Veterans (EBV) at Syracuse University, and in 2019, he founded Patriot Sons USA—a company focused on asbestos abatement and environmental remediation.

Drawing from firsthand experience with asbestos exposure during his early career, Dambach developed a passion for addressing the long-term health and environmental consequences of hazardous materials.

“Back then, we didn’t know the dangers. We worked with asbestos without any protection,” he recalled. “Now, I’ve become educated on the risks—and that knowledge drives our mission every day.”

Today, Patriot Sons USA is a federally registered and New York State-certified Service-Disabled Veteran-Owned Business (SDVOB) offering asbestos abatement, mold and lead remediation, and industrial cleaning services. The company plays a vital role on construction sites, often serving as the first team onsite to create safe working conditions for other trades by removing hazardous materials like asbestos, tile flooring, pipe insulation, or even biological contaminants such as pigeon guano.

“We’re in the business of cleaning up dangerous situations,” says Dambach. “Whether it’s abatement in a commercial building or an environmental hazard at a military facility, safety always comes first.”

Though the early years required persistence and patience, the company has seen significant growth in recent years, securing larger contracts across New York State—from Buffalo to Queens. Dambach credits this momentum to an expanding team of skilled professionals and a shared commitment to excellence.

“We’ve brought on some key full-time team members, including a project manager with over 20 years of experience,” Dambach shared. “And I’ve learned a lot from my son. The student has truly become the teacher.”

Patriot Sons USA may still be a young company in the broader construction contracting space, but its mission is grounded in discipline, integrity, and a genuine desire to serve—principles rooted in Dambach’s military background.

“We started out wanting to serve the VA and fellow veterans. That mission has evolved, but our values haven’t. We take pride in our work, prioritize safety, and don’t cut corners. We’re Patriot Sons for a reason—we aim to lead by example.”

Looking ahead, Dambach envisions the company expanding into emergency response services and broadening hazardous material cleanup efforts. More importantly, he hopes Patriot Sons USA will be a family legacy—continued by his children and grandchildren with the same purpose and pride.

“At the end of the day, it’s not just about profit,” he reflected. “It’s about doing work that matters—leaving a legacy of impact, honor, and purpose. In the military, you’re given a mission. In the private sector, you create your own. This is mine, and it feels right.”

From all of us at CNY Publications, Construction Contractor Magazine, and the Syracuse Builders Exchange, we extend our deepest gratitude to Fred Dambach and his family for their continued service—to our country, our industry, and our community.

 

Nexus Requires Compliance and Begins by Filing Tax Returns

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Shawn T. Layo, CPA, Dannible & McKee, LLP

“Nexus” is a Latin term that refers to the relationship of a taxing jurisdiction that enables it to subject your business to taxation. In addition to your business’s home state and city, other states and local jurisdictions where you conduct business can have nexus.

Traditionally, nexus was determined by a physical presence such as a branch office or construction location, but e-commerce has extended the definition of nexus. Today, having employees, equipment or even significant sales activity in another state could establish nexus, and with it, a requirement to file tax returns and potentially pay taxes.

Sales Tax Nexus

Sales tax nexus laws vary widely by state and can be triggered by seemingly small activities. For example, if you have an employee in a new state or buy some machinery there, that alone can subject you to sales tax. While these activities may mandate a contractor to file sales tax returns in that jurisdiction, that does not mean the company will owe taxes there. So, it is imperative that you are aware of the administrative burdens of entering new jurisdictions, as non-compliance can be costly. The same state can also have different standards for different taxes, such as income and sales tax.

Construction companies often must collect and remit sales tax on the total charge to the customer for any repair, maintenance and installation services provided. If taxes are not collected and paid, your business will be liable and could face penalties and interest. Many businesses go bankrupt due to unpaid sales taxes and the compounding penalties that follow. Just because a job is small or out of state doesn’t mean it escapes scrutiny.

Income/Franchise Tax

You already file income or franchise taxes in the state and jurisdiction where your company is based. However, if you operate in multiple states through offices, warehouses or employees traveling into another state or generating meaningful sales there, you may need to file tax returns in those states.

It’s critical to stay up to date on filing income/franchise tax returns in all appropriate jurisdictions. If your business ever has to bring a lawsuit in that state, your company must be qualified to do business there as a foreign corporation and filing tax returns supports this qualification. Most states require minimal paperwork and often a certificate of good standing from your home state to register to do business in another state. Your attorney can help you with filings and compliance issues.

When doing business in multiple states, it is imperative to know how each state computes and allocates its overall net income and, subsequently, how that net income is taxed. If you generated $1M of income in a year, but half your sales are attributable to State A and the other half are attributable to State B, does each state tax $500k? Potentially, each state has different rules for computing and allocating income. You may need to track revenue on a job-by-job, state-by-state basis and track the equipment and labor employed in each. How to do this depends on how each state allocates their income and whether they factor in sales, wages and/or property employed in and out of the state.

Voluntary Disclosure Programs

If you find that your construction business has not been properly filing sales or income/franchise taxes, you will likely be liable for back taxes, penalties and interest in each state and/or jurisdiction. A positive note is that the statute of limitations is set at three years after filing, after which the taxing authority can’t audit your return.

If you realize after the fact that you should have filed in a tax jurisdiction but did not talk to your tax consultant about filing an amended return, you may also be liable for back taxes, penalties and interest. However, many states have “voluntary disclosure” programs that encourage businesses to catch up by filing outstanding or amended returns. In many cases, penalties are waived, and payment terms can be very favorable. Keep in mind that it is better to voluntarily come forward than to be found out by the taxing authority. If you have any questions about nexus and what it may mean for your business, please contact us.

Shawn T. Layo, CPA, is a tax partner at Dannible & McKee, LLP, a certified public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, as well as Tampa, FL. With more than 24 years of experience, Shawn specializes in providing tax planning and compliance services for a variety of clientele with a focus on construction, architectural and engineering, multi-state corporations and high-net-worth individuals. For more information on this topic, contact Shawn at slayo@dmcpas.com or (315) 472-9127. Visit our website at DMCPAS.com to learn more.

2024 NY Workers’ Comp Bills: What Construction Companies Need to Know

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The Lovell Safety Management Executive Team

In 2024, the New York State Legislature passed four workers’ compensation bills that could reshape how claims are managed. Two of these bills were signed into law by Governor Hochul, and two were vetoed. Construction companies, which already operate in high-risk environments, should pay close attention to these changes, especially as they affect claim costs, mental health claims, and treatment protocols.

1.Signed into Law: Limited Mental Stress Claims Expansion (A.5745/S.6635, amended by A.1677/S.0755)

Governor Hochul signed this bill on December 6, 2024, with chapter amendments finalized in January 2025. It expands eligibility for workers’ compensation mental stress claims but only for specific psychiatric diagnoses.

What Changed?
Previously, only police officers, firefighters, and EMTs could file mental injury claims without showing their stress was “greater than” that of a similar coworker. Now, all employees, including those in construction, will be eligible to file a mental stress claim (only in mental-mental injury claims)—as long as their diagnosis fits into one of three psychiatric conditions:

• Post-Traumatic Stress Disorder (PTSD)

• Acute Stress Disorder

• Major Depressive Disorder

To qualify for benefits the employee must prove that:

• The stress arose out of an extraordinary work-related stress that is attributable to a distinct work-related event or series of events that are:

• Directly related to employment and

• Occurring during the performance of the employee’s work duties

Impact on Construction
Construction workers frequently face traumatic events: serious injuries, falls from heights, or fatal accidents. This new law may increase:

• Claims related to mental health after job site incidents.

• Challenges in disputing those claims due to the now-subjective stress threshold.

• Length and complexity of claims, potentially delaying return-to-work timelines.

Recommendation: Immediately investigate and report mental stress claims to Lovell. The new standard applies to specific mental claims and the old standard of the “stress being greater than that of a similar worker” remains in effect for other types of mental stress claims. Legal counsel at Lovell/NYSIF will determine which standard is applicable based on the facts of the case. Train field supervisors to document traumatic events with pertinent information. Strengthen mental health resources for workers and ensure HR is prepared to handle these claims sensitively but rigorously.

2. Signed into Law: Occupational Therapy & Physical Therapy Assistants Now Allowed to Treat Claimants Governor Hochul signed this long-standing bill on September 27, 2024. It authorizes licensed occupational and physical therapy assistants to treat injured workers under supervision of licensed physical therapists and occupational therapists.

What Changed?
Previously, New York law only allowed licensed OT/PT providers to treat injured workers. This bill now permits OT/PT assistants to perform treatment, so long as they work under the supervision of an authorized OT/PT.

Impact on Construction
Many injured construction workers need some form of physical rehabilitation. This change:

• Should improve therapy accessibility.

• Is not expected to increase claim costs significantly, as assistants are already commonly used in comp cases.

3. Vetoed: Out-of-Network Pharmacy Access (A.1219-A/S.1974-A)

This bill would have allowed injured workers to bypass the employer’s designated pharmacy network under certain conditions. Governor Hochul vetoed the bill on December 13, 2024.

Why Was It Vetoed?
The Governor cited:
• Increased litigation over “qualifying” conditions.

• Delays in benefit delivery due to added bureaucracy.

• A rollback of pharmacy cost savings won in the 2007 comp reforms.

Some examples that would have allowed workers to use non-network pharmacies included:

• Delays of more than 72 hours in receiving prescribed meds.

• Denial of reauthorization requests.

• Disputes between treating physicians and IMEs.

Instead of the bill, the Workers’ Compensation Board (WCB) issued new regulations, clarifying when a worker may use a non-network pharmacy at the end of 2024, providing a 60-day comment period and then based on comments, finalization of the new regulations.

Impact on Construction
The veto preserves critical cost controls for employers and carriers. Most construction employers in a Lovell Safety Group will not see major changes as NYSIF already provides first-fill prescriptions pending establishment or acceptance of the claim.

4. Vetoed: Medical Treatment Guidelines Rollback (A.6832-A/S.6929)

This bill was vetoed on November 22, 2024, and would have fundamentally altered how treatment is approved in NY workers’ comp.

What the Bill Would Have Done
• Undermined the Medical Treatment Guidelines (MTGs) by letting providers bypass them.

• Eliminated the Prior Authorization Request (PAR) process.

• Forced carriers to rely on costly Independent Medical Exams (IMEs) for treatment reviews which may delay treatments.

Why It Was Vetoed?
Governor Hochul argued the bill would:

• Lead to over-treatment and questionable procedures.

• Increase litigation and delay care.

• Undo years of reform aimed at improving outcomes and lowering costs.

Impact on Construction
The veto protects construction employers from:

• Skyrocketing treatment costs.

• Legal disputes over unnecessary
or non-evidence-based care.

• System abuse seen prior to MTG
and PAR implementation.

Bottom Line for Construction Employers

The 2024 legislative session brought both relief and risk for New York construction firms in 2025. While some protections were preserved through vetoes, the signed mental stress bill opens the door to more complex, subjective claims.

Key Takeaways:
• Expect more mental stress claims tied to specific traumatic events, especially after serious job site incidents.

• OT/PT assistants can now legally assist in the treatment of injured workers, potentially speeding up recovery.

• Pharmacy access rules are evolving but the cost-saving structure remains in place for now.

• The veto of Medical Treatment Guidelines (MTG) rollbacks is a win for employers concerned about runaway treatment costs.

The Governor also passed two workers’ compensation bills in her Budget that would expand access to treatment. Those bills will allow for residents and fellow physicians in a Graduate Medical Program to treat claimants and permit carriers to pay for medical treatment pending a decision on compensability. 

Lovell Safety Management closely monitors legislative developments, actively working to reduce the impact of potential negative changes on the members of our five construction and eight general industry workers’ compensation safety groups. Our programs are designed to return profits to members in the form of dividends, and to date, Lovell safety group members have received over $1.28 billion in dividend savings. The 2025 legislative session closed in mid-June, and we will provide a full update on any new developments or additional legislative changes in early 2026.

In summary, the 2024 legislative session brought both relief and risk for New York construction firms in 2025. While some protections were preserved through vetoes, the signed mental stress bill opens the door to more complex, subjective claims. For any questions regarding workers’ compensation and the legislation, please contact Lovell at 1-800-556-8355.

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NYS 2025 Workers’Compensation Updates

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Brett Findlay, Vice President, Business Risk Specialist, OneGroup

 Overview of 2025 Workers’ Compensation Changes in New York State
New York State continues to see positive trends in workers’ compensation. For the tenth year in a row, an aggregate rate decrease is expected. Additionally, the New York State Assessment dropped again in January 2025. With these encouraging trends setting the tone for 2025, let’s take a closer look at the specific updates to workers’ compensation rates and assessments that could impact employers across New York State.

Upcoming Rate Reduction
On May 8, 2025, the Board of Governors for the New York Compensation Insurance Rating Board (NYCIRB) announced they voted to file their annual loss cost indication with the New York State Department of Financial Services. This filing, once reviewed and approved, will take effect on October 1, 2025.

The proposed change reflects a 13.2% average decrease in the overall loss cost (or rate) level. This figure is based on NYCIRB’s standard ratemaking methodology and applies to policies renewing on or after the effective date.

However, this 13.2% reduction is an aggregate average—the actual impact will vary depending on the classification codes used in your policy. Some businesses may see more significant savings, while others may experience smaller changes or even increases depending on their specific risk profile and claims history.
The workers’ compensation market remains soft overall, but volatility continues due to the experience modification rating (EMR) formula changes introduced in 2022. These changes can significantly affect individual policy premiums, especially for businesses with fluctuating claims experience.

If you have questions about how these changes might affect your policy or renewal timeline, consider reaching out to OneGroup and see if they can help you review your coverage and workers’ compensation plan.

Policy Timing and Planning
These rate changes only apply to policies renewing on or after October 1, 2025. If your policy renews before then, the new rates won’t apply until your next renewal. It’s a good idea to review your classifications now to better forecast future costs.

New York State Assessment Decrease
In January 2025, the New York State Assessment rate dropped from 9.2% to 7.1%, marking the largest single-year reduction in several years. This assessment is a mandatory surcharge applied to all workers’ compensation policies in New York to fund the state’s Workers’ Compensation Board and related programs.

This latest decrease continues a multi-year trend of declining assessment rates:

• 2021: 11.8%
• 2022: 10.2%
• 2023: 9.8%
• 2024: 9.2%
• 2025: 7.1%

Since 2021, the assessment rate has dropped by nearly 40%, resulting in a cumulative reduction of almost 20% in aggregate costs to policyholders. This trend reflects improved system efficiency and reduced administrative costs at the state level.

For employers, this means lower overall premium costs, even before factoring in the upcoming rate reductions. However, the actual savings will depend on your total payroll, classification codes, and claims history.

If you’re unsure how this impacts your current or future premiums, contact us we can help you analyze your policy and identify opportunities for savings.

What This Means for Contractors
These changes can significantly impact your insurance costs. For personalized guidance, reach out to OneGroup’s team of specialists dedicated to risk management and construction industry insurance.

For more information on renewing your insurance, you may reach out to Brett Findlay at 315-280-6376 or by email at BFindlay@OneGroup.com

If You Work On Both Public And Private Projects, You Must Understand The Concept Of Annualization.

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By Gabrielle Kehoe, Sheats and Bailey, PLLC

As you all know, if you work on public projects, either New York or Federal, you must pay prevailing wages.  The prevailing wage rate is based on geography and classification of the work being performed.  Prevailing wages consist of two things: hourly wages and supplemental (or fringe benefit) wages.  The former is the wage paid to the employee in his/her check and supplemental wages are meant to represent the hourly value of benefits like health insurance, retirement contributions or paid time off.

Supplemental wages, what counts?

If your company contributes to a retirement plan, provides health insurance, disability insurance, sick leave or vacation pay, training or apprenticeship programs, or more, those qualify as supplemental benefits or “bona fide” benefit contributions.  However, statutorily required payments such as social security, workers’ compensation, or reimbursements for travel expenses are not included in fringe benefits.

What weight do these benefits bear on prevailing wages?

Under both New York and federal law, contributions to bona fide benefits can offset the prevailing wage’s supplemental wage allocation.  If your company contributes to a bona fide benefits plan, you can deduct these contributions from that supplemental wage allocation.  However, New York and federal projects differ on how to calculate these contribution deductions.

New York’s calculation

Under New York’s Labor Law, annualization is used to calculate deductions. Annualization requires that all qualifying benefits paid to an employee to be identified and totaled for the year.  Then, that total must be divided by the total hours the employee worked on both public and private projects. Once that is calculated, the hourly rate for the annual bona fide benefits paid to an employee is found.  This number should be compared to the supplemental fringe benefits set on the prevailing wage schedule, and the difference between the two must be paid weekly to the employee.

For example: Let’s say the total annual contributions to a bona fide benefits plan for one employee equals $10,000 and that employee worked full time on both public and private projects for a total of 2,080 hours.  Meaning, there was $4.80 paid ($10,000/2080 hrs) to that employee in fringe benefits every hour on top of their hourly rate over the past year.  Now consider that the hourly supplemental benefit rate is $39.80 on top of the basic hourly wage rate.  Only $35.00 needs to be paid on top of the basic hourly wage to satisfy the prevailing wage rate.

Federal calculations

Federal law differs from New York in that there are two different ways to calculate supplemental wage deductions.  The choice between the two relies on whether the employee has immediate eligibility (or are expected to become eligible) and immediate 100% vesting (i.e., there are no conditions to be satisfied to receive the contributions to the plans) of the prevailing wage contributions for their bona fide benefit plans or if the employee has not yet and is not expected to qualify for the plans due to being a member of an excluded class.

First is the dollar-for-dollar method. This method can be used toward fringe benefit obligations for contributions to eligible retirement plans.  To be eligible the retirement plan must require that the employee be immediately eligible for the plan and 100% vesting (i.e., has complete ownership) of the plan contributions.  This formula excludes hours worked on non-governmental or ineligible projects. This method allows full credit for the amount of contributions made on Davis-Bacon Work.

For example: an employee worked 1,000 hours on Davis-Bacon projects and the fringe benefit rate is $10 an hour for the year.  The employer contributes $7.00 an hour to a fully vested, immediately eligible retirement plan for an employee working on a Davis-Bacon project, the employer can then credit the full $7.00/hour or $7,000.00 a year toward their fringe benefit obligation. Please note this dollar-for-dollar method cannot be used when calculating a credit on fringe benefits for NYS prevailing wage projects.

Second, like New York, the annualization method is used when an employee does not have immediate or expected eligibility to the bona fide benefits plan.  This formula allows for all hours worked on both eligible government projects to be balanced against the total hours worked on ineligible projects.

This will look like New York’s annualization calculation from the previous section.

How can fringe benefits be paid to laborers?

Under New York and federal law, these benefits can either be paid in weekly cash wages, or on a bona fide benefits plan, such as a retirement account.  However, those who work both State and Federal Jobs need to make sure they do not apply the dollar-for-dollar federal method when determining contribution credits on New York prevailing wage jobs.  The dollar-for-dollar method can only be applied to federal projects, and New York only uses the annualization method to calculate prevailing wages.  Misapplying the dollar-to-dollar method on New York jobs can lead to underpayment of fringe benefits and result in a DOL audit and costly fines. 

The information provided in this article is not intended to serve as specific legal advice for any particular situation. Competent legal and experienced counsel should be consulted.