MTA blames vendor transition for workers comp payment delays

The president of New York City Transit said Monday the firm recently tasked to handle workers’ compensation claims “weren’t ready as they should have been” when taking on the responsibility, leading to delays in payouts for some workers in the last month. 

Demetrius Crichlow made the comments Monday at a meeting of the agency’s Bus Committee where he explained that the firm Sedgwick had issues transitioning legacy staff's workers compensation claims in the weeks after the MTA started using the firm in May. 

"As with any changes, especially this large, we learn early lessons on how we can work with Sedgwick and our labor partners,” Crichlow said at the meeting. "It's regrettable that this happened but it's our goal to make sure to get it right and not to have the issue happen again." 

The MTA moved all management for workers compensation claims to Sedgwick May 19 and by mid-July had informed Transport Workers Union Local 100 that the company was not yet able to process half of the workers compensation claims made before the transition. That’s up to 2,500 claimants possibly missing out on paychecks, Local 100 said.  

After being informed of the mishap, John Chiarello, Local 100’s president, penned a letter July 18 to MTA head Janno Lieber in protest of the “incalculable harm that your shockingly bad mismanagement is causing to members of Local 100.” 

He wrote that Local 100 did not agree with the MTA’s “unilateral” decision to move claims processing from in-house to a third-party operator and warned of issues with the transition before it began.

“During our meetings on the topic earlier this year, however, we received multiple assurances as to the capacity of Sedgwick to handle the current inventory of claims and we were further assured that an extended transition was not necessary as Sedgwick’s expertise was indisputable,” Chiarello wrote. “What is clear is that members of Local 100 who were injured on the job – who are entitled to indemnity payments from MTA Workers Compensation and Differential payments from the MTA – will not be getting checks that they and their families depend upon to survive.” 

After receiving a reply from one of Lieber’s subordinates, a frustrated Chiarello wrote a follow-up letter to the transit authority July 19 informing the MTA that a union-wide grievance had been filed about the delays. Crichlow then responded directly to the union leader July 25, writing that “transition related processing issues” created the delay and that 66 percent of recipients were paid within six days of when workers expected their payment and 33 percent were paid within seven days. 

“I regret any inconvenience created by these delayed payments during the transition to this new and improved system for workers compensation claims administration,” he wrote.

New York City-based Sedgwick has 10,000 clients across 80 countries and labels itself “the world’s leading risk and claims administration partner.” In her own letter to the TWU, Sedgwick’s managing director, Jennifer Keener, wrote to the MTA that the firm is “devoted to the wellbeing of NYCT” employees. 

“We are here to support employees through this process and are working diligently to ensure their needs are met,” she said. 

Frustrated Local 100 members testified at the MTA's board meeting Wednesday about their missed payments. Emily Louise Allen, a Local 100 retiree who said she receives workers compensation payments for neck and back injuries, told the board that her July check was 15 days late.

"If it can be on time for 24 years, how is it that its not on time now," she asked. "There is no reason for this company to be late."

Local 100 is not retracting its union-wide grievance, a union official said, but most of the outstanding delays have been resolved, or will be by July 31, the MTA has claimed.

Crichlow said in the Monday committee meeting that Sedgewick would start producing daily reports for NYCT on workers compensation claims and that he understood the gravity of missed paychecks for MTA employees.

hfreeman@thechiefleader.com