PART I

REPORT OF THE INDUSTRIAL COMMISSIONER

To the Legislature:

Herewith I beg to report to you with respect to the operations of the Labor Department for the fiscal year ended June 30, 1922. While the statistical data and bureau reports are generally related to the fiscal year, I shall not confine myself to that period, but will discuss the administrative problems of the Department as of the present time.

PERSONNEL

There have been few changes in the personnel of the supervisory officers of the Department. I desire to record, however, that on May 1, 1922, Robert F. Coleman of Buffalo, succeeded Stanley L. Otis of New York, as Director of the Bureau of Workmen's Compensation, Mr. Otis having on that day been transferred to the position of Referee in the hearing and determination of compensation claims in the New York City office of the Compensation Bureau.

Major Arthur T. Smith of Rochester, John J. Blackford of Yonkers, and John B. Smith of Saratoga Springs, were appointed Referees in the Compensation Bureau, one in place of James McLusky who resigned as Referee, and the two others in new positions provided for in the appropriations made at the last session of the Legislature. Since the close of the fiscal year William A. Abbott, Referee in the Albany office, has also resigned.

There has been the usual heavy "turn over" in the clerical and inspection forces of the Department. It is a matter of regret and a fruitful cause of inefficiency that the State service, because of low pay and because of the necessarily hampering restraints of Civil Service, does not attract and retain the best employees available. While many do remain for years in the state service and become well nigh indispensable to the efficient running of the Department, on the other hand in the lower grades particularly there is a constant coming and going, training of new employees only to lose them to private business as soon as they have become valuable, and with frequent long gaps in positions while Civil Service lists are being canvassed, candidates interviewed, and often waiting for examinations to establish eligible lists.

A more elastic budget, more liberal salary levels and a greater opportunity to reward individual initiative and merit within the Civil Service groups would tend greatly to increase the efficiency of the State service.

FINANCES

Attached hereto is a financial statement of the expenditures of the Department for the fiscal year, together with a copy of the payroll as of July 1, 1922. The Department kept well within its appropriations and no deficiency appropriations were requested or required. In fact, some small balances were turned back to the Treasury.

Owing to an increase in the number of claims for compensation, however, due in part to the great increase in industrial activity and due in part also to the changes in the law and court decisions whereby thousands of maritime and longshore cases came again under compensation, it was necessary to request an appropriation for a number of additional positions in the Compensation Bureau. Not all of these new positions allowed, however, were filled until the beginning of the present fiscal year.

Pursuant to the provisions of section 77 of the Compensation Law (renumbered section 126 in the revised law) the total expense incurred in the administration of the Compensation Law was ascertained as soon as could be after the close of the fiscal year, and on December 14, 1922, I made an order assessing upon each carrier, including the State Fund and each self-insurer, the proportion of such expense which the total of its payments of compensation bore to the total amount of compensation payments. The total payments of compensation during the fiscal year were $15,267,058.20 while the expense of administering the Law amounted to $491,944.20. The State Fund's proportion of this amounted to $43,496.48. It is expected that the entire $491,944.20 will be collected at an early date and will be turned into the State Treasury.

In addition, the entire cost of administering the State Fund was ascertained to be $280,812.19 and this amount likewise has been turned into the Treasury. Accordingly, of the entire cost to the State of administering this great Department, namely $1,500,000, there was reimbursed to the State the sum of $772,756.39.

In other words, approximately 50 per cent of the cost of running the Department was raised by the Department by direct assessment upon the industries of the State and not by general taxation.

ORGANIZATION

Substantially no change in the organization of the Department has taken place during the past year, and the experience of a year and a half demonstrates that in a general way the present form of organization is the correct one. The bureaus as at present constituted have under their control all related activities, and the various divisions of the bureaus all cooperate one with another in a very satisfactory manner,

In one respect, however, I think the organization might be made more efficient. The law was evidently designed to remove the Commissioner as far as possible from the judicial side of the Department, and while in theory that is entirely correct, in practice it would work for the more smooth and efficient running of the Department if the Commissioner was given directly the authority to hear and determine claims for workmen's compensation in the same manner as members of the Board, and he should also be a full voting member of the Board on all matters of appeals from orders, the adoption of industrial codes, and the granting of variations from the law and rules. This right should be vested in the Commissioner with power to delegate it to the Deputy Commissioner in his absence. It is certainly an anomalous situation for the Commissioner to sit with the Board in the consideration of matters of vital import to the Department and have no voice in the determinations taken. Moreover, in the present situation, with the work of the Industrial Board in the hearing and review of compensation cases carried on by them as individuals. and not as a Board, it sometimes happens that there is no member of the Board available to hear a particular calendar, either for a whole day, or more often for a part of a day, and the Commissioner has been compelled to sit as a reviewing officer. His decisions, however, must be submitted to the Board for confirmation, which is, of course, purely perfunctory, and entirely unnecessary.

Undoubtedly better coordination of the work would be brought about if whenever a vacancy shall occur in the position of Chairman of the Industrial Board, the law should provide that the Industrial Commissioner be ex officio Chairman of the Board as was provided in the law in 1913, prior to the consolidation of the Departments. The Board could then elect one of its members to act as presiding officer in the absence of the Commissioner.

This same recommendation was made by me to the Knight Committee in 1920 when it held hearings on the question of organization of the Department, and the experience of the past two years has strengthened my opinion in that regard.

WORKMEN'S COMPENSATION

Approximately 50 per cent of the activities of the Department relate to the administration of the Workmen's Compensation Law. The work of the Bureau is generally speaking well in hand. The report of the Director of the Bureau is submitted herewith and reference is made thereto.

The effort has been during the past two years to systematize and organize the work of the examination and hearing of claims so as to make the work proceed smoothly and rapidly, to eliminate the delays, and while administering the law in a sympathetic manner and with the fullest benefit to the claimants, yet to insist upon fairness and justice to all,

The complete revision and amendment of the Workmen's Compensation Law at the last session of the Legislature marked a very great advance in compensation legislation.

The provision striking out entirely the 60 day limitation upon medical treatment for which an employer must be responsible, and requiring him to furnish medical treatment for so long as the nature of the injury and the process of recovery requires, irrespective of the length of time, was a very logical step and one greatly in the interest of the injured worker.

The provisions for reaching the evils of non-insurance have worked admirably in more effective handling of the non-insurer and in compelling him to take out insurance to cover his workmen. The extent to which they have reduced the number of noninsurers, however, is unknown, for the reason that the noninsurer is not known to the authorities generally until an accident occurs and a claim for compensation is made. The work of the factory and mercantile inspectors in checking up on the insurance of all employers visited by them in their inspection rounds. has been excellent and productive of great good.

The law was also amended to provide that an employer by insuring his employees is deemed to have elected to bring all his employees under the law, whether they are engaged in work of a hazardous nature or not, and the insurance carrier, having accepted a premium for covering them cannot, after an accident occurs, now plead that the employment is not covered under the law. This has eliminated much litigation and has secured compensation without question to many injured persons who otherwise might have received nothing.

Particularly useful is the provision of the amended law that throws upon a general contractor liability for compensation to the injured employees of a sub-contractor unless the sub-contractor has insured them. Some fears were entertained at the time this amendment was under consideration that it would lead to double insurance. This has not been the case, however, and there has been little administrative difficulty under it.

ADVANCE PAYMENTS OF COMPENSATION

Without doubt one of the best provisions in the Compensation Law was the provision enacted in 1921, amending section 25 to provide for payments of compensation in advance of an award. This provision declares the very heart and essence of compensation, namely, that it shall be paid in like manner as wages, promptly and as due, without waiting for an award or order of the Department unless the right to compensation is controverted.

In either case, whether payments of compensation are begun or the right is controverted, notice of that fact must be given. promptly to the Commissioner and to the claimant. Payments once begun must continue unless notice is promptly given to the Commissioner of their cessation and the reason therefor, so that the case can promptly be placed on the calendar for hearing.