New York’s workers’ compensation system will receive an overhaul in order to cut costs for employers while raising benefits for workers injured on the job. The new program is intended to give the state’s businesses a competitive edge.

The new agreement will include the first benefit raise in more than 10 years for injured workers and will also cut employer costs by $800 million or more annually. The gains in the program will be achieved by cutting the amount of awards now given for life to a relatively small group of people with “permanent, partial disabilities.”

Many of the permanent injuries are back injuries that don’t fall into any specific benefit level. These claims make up about 5% of the total claims each year, but they make up 50% of the costs of the program—or about $1.7 billion annually. The new program will place a cap of between four and ten years on these current lifetime-benefits, based on the severity of the type of injury. The new parameters apply to future, and not present beneficiaries.

The new agreement calls for benefits to rise from a current maximum of $400 a week to $600 weekly in three years. These new payments would be pegged to two-thirds of the state’s average weekly wage and would get annual inflation-rate increases. Benefits are not taxed.

All employers have workers’ compensation costs, regardless of their industry. Manufacturing, however, has far higher costs, because it has higher liabilities than typical office work.