On December 6, 2024, Governor Kathy Hochul signed new legislation, S.6635/A.5745, to support employees facing job-related mental health issues. The law, which went into effect on January 1, 2025, will allow any employee to file for workers’ compensation for specific types of mental health injuries based on extraordinary work-related stress. Under the revised Section 10(3)(b) of New York’s Workers’ Compensation Law, “[w]here a worker files a claim for mental injury premised upon extraordinary work-related stress incurred at work, the [Workers’ Compensation Board] may not disallow the claim upon a factual finding that the stress was not greater than that which usually occurs in the normal work environment.”

How does this change the workers’ compensation law?

This is a marked expansion of coverage for employees in New York, as previously only first responders facing post-traumatic stress disorder were eligible for such benefits. The new law also removes the condition imposed on first responders bringing these claims—that the stress was incurred during a “work-related emergency.”  And as was the case with the legislation enacted in 2017 with respect to first responders, the removal of any requirement that the stress suffered be greater than normal stress sustained by similar workers will likely result in a significant increase in claims filed due to extraordinary work-related stress, although, as noted below, there are likely to be developments related to what qualifies as “extraordinary” for these purposes. Under the new legislation, an employee may soon seek a stress claim based on the usual irritations attributable to working in that position assuming that the stress is shown to be extraordinary. In other words, the cause of the employee’s stress will not be the impediment to the claim, but rather the degree and type of stress suffered.

Ultimately, the stress experienced and the emergence of that stress in the course of employment must be proven by the claimant, and the stress need not result from a single event or occurrence but can be cumulative. However, the question of whether a work-related stress claim is in fact “work-related” is deeply factual and is an issue to be resolved by the Workers’ Compensation Board. Similarly, the law does not define what constitutes an “extraordinary work-related stress,” so the scope of eligible claims will ultimately be left to Workers’ Compensation administrative law judges to interpret and will require significant evidence vis-à-vis expert medical testimony and documentation, which is certain to increase the costs and burdens associated with litigating these claims before the Workers’ Compensation Board.

What are the potential impacts of this change?

While there is likely to be a significant increase in workers’ compensation claims premised on work-related stress, there likely will be a parallel decline in emotional distress damage awards in employment-related litigation cases filed outside of the Workers’ Compensation Board. As a general rule (with some exceptions), when employees are injured in the course of employment, their sole remedy against their employer lies in their entitlement to recovery under the Workers’ Compensation Law. See N.Y. Workers' Comp. Law § 11. In relevant part, Section 11 provides that “[t]he liability on an employer prescribed by [Section 10] shall be exclusive and in place of any other liability whatsoever.” Thus, given the amendment to Section 10 to include mental health claims by any employee, once the employer’s liability for providing workers’ compensation benefits is established, the employee cannot sue that employer in court for damages sustained from the work-related mental health injury in most circumstances.  This is referred to as “workers’ compensation exclusivity” or the “workers’ compensation exclusive-remedy rule.”

However, there are notable exceptions to the workers’ compensation exclusive remedy rule, which allow a current or former employee to sue for emotional distress damages in arbitration or court. For example, the employer’s failure to maintain insurance coverage by one of the methods required by Sections 10 and 50 of the Workers’ Compensation Law permits the employee the option either to sue for the damages sustained as a result of the injury, or to seek the benefits provided under the Workers’ Compensation Law. Another exception to the exclusive liability rule is where the injury results from an intentional tort perpetrated by or at the direction of the employer; in that event, the employee has a common-law right of action for damages.

Thus, to the extent an employee alleges intentional infliction of emotional distress, as opposed to negligent infliction of emotional distress, such an intentional tort claim is permitted to proceed outside of the Workers’ Compensation Board as an exception to the Workers’ Compensation Law.¹

Will this change have a retroactive application?

The change went into effect on January 1, 2025. While the statute is silent as to whether it will apply retroactively, application of New York’s two-step framework for determining retroactivity suggests that only behavior occurring after January 1, 2025 will be considered for purposes of bringing a claim pursuant to Section 10(3)(b). Specifically, because the statute does not expressly state that it applies retroactively and because the statute creates a new substantive right, Section 10(3)(b) will likely be applied only to causes of action accruing after its effective date.²

Take-Aways

In light of this change, employers are encouraged to review their Workers’ Compensation policies to ensure coverage is updated to include coverage for all employees that purport to bring mental injury claims premised on work-related stress. Every business is different, so risks are unique. Businesses are encouraged to consult with labor and employment counsel regarding questions about the scope of the new legislation.