Violations of Workers Compensation Law (Liability and Penalties)
The Workers’ Compensation Act (WCL) considers that most people who provide services to a for-profit business are employees of that business. An employee is a person who performs under the supervision, direction, and control of an employer, whether on or off its premises. this applies if the worker is
- part time,
- full time,
- temporary,
- seasonal,
- casual work/day laborer,
- rented,
- borrowed, or
- Unpaid, including volunteers and family members.
- has a valid workers’ compensation insurance policy,
- is self-insured for workers’ compensation,
- is legally exempt from having to obtain workers’ compensation coverage, and/or
- keeps true and accurate business records.
-
for five or fewer employees
Failure to secure workers’ compensation coverage for five or fewer employees within a 12-month period is a misdemeanor punishable by a fine of between $1,000 and $5,000.
-
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for more than five employees
Failure to obtain workers’ compensation coverage for more than five employees within a 12-month period is a Class E felony punishable by a fine of between $5,000 and $50,000 and is in addition to any other penalties that may apply. apply.
civil penalty (wcl §52 [5])
- An employer who fails to provide coverage for 10 or more consecutive days may be fined up to $2,000 for each 10-day period of non-compliance, or no more than twice the cost of compensation for your payroll for the period. of said breach.
- this is in addition to all other penalties, fines or assessments.
- When an employer fails to provide sufficient business records for the president to determine the employer’s payroll for the period requested for calculation of the penalty, the weekly payroll claimed for each employee, corporate officer, sole proprietor or partner will be the weekly wage new york state average times one and a half.
- if the employer is a corporation, the president, secretary and treasurer will be responsible for the sanction.
- if an employer has been convicted of failing to insure workers’ compensation coverage for employees within the preceding five years, that employer will be guilty of a class d felony upon conviction of a subsequent offense and will be You will be fined between $10,000 and $50,000, in addition to any other penalties, including fines.
- cases investigated by the board are referred to the new york state attorney general’s office for prosecution.
- all salary and medical benefits granted to any of its employees.
- Legal representation is required to defend against a workers’ compensation claim.
- assessments of up to $2,000 for each 10-day noncompliance period.
- any other sanctions the board may issue for noncompliance as described above (wcl §52[5]).
- intentionally and materially understating or concealing payroll,
- hide employee duties to avoid proper classification, or
- hide any other information necessary to calculate the premium paid to ensure compensation,
- pay workers “off the books”,
- not reporting wages paid to undocumented workers,
- misclassifying employees as “independent contractors”,
- misclassifying a company’s job to a classification that is less hazardous (for example, identifying all roofers as secretarial staff), and/or
- intentionally misrepresenting or concealing information necessary to calculate the premium paid.
- number of employees
- employee classification
- information on employee accidents
- wages paid to employees for four years
- sole proprietor
- partners
- president, secretary and treasurer of a corporation
subsequent failure to secure coverage
criminal sanction (wcl § 52 [1] (b))
additional responsibilities
(wcl §26-a)
Uninsured employers are responsible for the following costs resulting from an uninsured claim:
The uninsured employer can also be sued by an injured employee.
misrepresentation
penalties for misrepresentation
civil and criminal penalties
An employer must keep accurate records of the number of employees, classification, wages, and accidents for its business for four years. (wcl §131)
any attempt by an employer to
can result in a fine of up to $2,000 for each 10-day period of non-compliance or twice the cost of compensation. additionally, the fine for criminal conviction can be from $1,000 to $50,000. (wcl §52 [1] (d))
examples of misrepresentation
examples of misrepresentation include failure to pay applicable workers’ compensation premiums
not keeping accurate payroll records
criminal sanction (wcl §131 [1])
every employer must keep an accurate record of the following:
These records must be open to inspection at any time and as often as necessary for inspection by board investigators, licensed auditors, accountants, or inspectors of the insurer with which the employer is insured, or by any other entity authorized by law.
Any employer who fails to keep accurate records, fails to provide records as required, or falsifies any record is guilty of a misdemeanor and subject to a fine of between $5,000 and $10,000 in addition to any other penalties provided by law.
Any employer who has been subject to criminal penalties under this section in the preceding 10 years shall be guilty of a class e felony and subject to a fine of between $10,000 and $25,000 in addition to any other penalties provided by law .
civil penalty (wcl §131 [3])
If an employer fails to keep accurate payroll records, the chairman of the board may impose a fine of $1,000 for each 10-day period of non-compliance. this penalty is in addition to all other penalties, fines or levies, or an amount not to exceed twice the cost of compensation for your payroll during the period of such noncompliance. Fees collected will go into the Uninsured Employers Fund.
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When an employer fails to provide business records necessary for the president to determine the employer’s payroll during the period requested for the calculation of the penalty provided in this section, the imputed weekly payroll for each employee, corporate officer, sole proprietor or partner will be the new york state average weekly wage, multiplied by one and a half.
If the employer is a corporation, the president, secretary and treasurer will be responsible for the sanction.
stop work orders
If workers’ compensation coverage is not in effect, or if there is any outstanding debt to the board, a stop work order can be issued for a business. A stop work order requires the immediate suspension of all business activities. (wcl §141-a)
disabling
new york state government entities, including state, county and municipal agencies, may not enter into a public works contract with businesses on a debarment list. the 2007 workers’ compensation reform legislation included provisions that would prevent employers with various types of workers’ compensation violations from bidding on public works projects. (wcl §141-b)
Those convicted of a misdemeanor under the wcl, and any affiliated entity substantially owned by such person, or those subject to civil fines, penalties, or a stop-work order under the wcl, have one-year ban on bidding for public works contracts or subcontracts with the state. (wcl §26, 52 or 131). There is a five year ban on felony convictions or violations of the discrimination provisions of the wcl. (wcl §125 or 125-a)
see the list of disqualification of public works contracts
violations of the fair play law
Contractors who violate the fair play law by failing to properly classify employees will be subject to civil penalties of up to $2,500 per employee misclassified for a first violation and up to $5,000 per employee misclassified for a second violation within a period of five years. year period. A workers’ compensation judge will impose the civil penalties contained in the law based on the evidence presented at the hearing.
first offense
A business may be subject to criminal prosecution (a misdemeanor) with a sentence of up to 30 days in jail, a fine of up to $25,000, and disqualification from bidding or awarding any public works contract for up to one year for a first offense.
later violations
Subsequent misdemeanors would be punishable by up to 60 days in jail, a fine of up to $50,000, and disqualification from bidding or awarding public works contracts for up to five years.
Penalties under the act are in addition to all existing civil and criminal penalties for misclassification, failure to provide required coverage, or other violations of wcl, labor law, or tax and finance law.
not reporting an injury
Failure to file a First Report of Injury form, or if it is not filed on time, can result in a fine of up to $2,500.
personal responsibility
The following people are personally responsible for a business not obtaining workers’ compensation insurance:
do you need help?
The Office of the Business Advocate can help employers with penalties and what you need to do to comply. visit the advocate for business page for additional information, or contact the office directly by calling (518) 486-3311 or emailing [email protected].
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These employees must be covered by the employer for workers’ compensation insurance, as well as disability benefits insurance and paid family leave.
Reading: What happens if you don’t have workers compensation insurance
The board monitors the insurance coverage status of every new york state employer that is subject to the wcl (over 800,000) and makes sure they maintain coverage for their employees. The board ensures that employers in similar industries are subject to similar costs of doing business with respect to required insurance.
sanction process
In most cases, if the board does not have an employer’s coverage information for a specified period of time, it will mail an inquiry notice to the company, asking it to show that it is in compliance with the wcl.
the board may require proof that the business
if an employer fails to provide this information, the board will assume the employer is in violation of (wcl §52 [5]) and will mail the first penalty notice. noncompliance penalties can be as high as $2,000 for each 10-day gap in coverage. by the time an employer receives their first penalty notice, the penalty can be more than $12,000. the penalty accrues over the period of time the employer did not have workers’ compensation coverage and had people provide services to the business.
request a review
A company has 30 days from the date of the initial penalty notice to request a review of the penalty, explain why there was a gap in coverage, and request that the penalty be reduced. The board processes requests for review based on information provided by companies. this review may lead to the annulment, reduction or maintenance of sanctions.
collections
When a company has not paid the fine or has not filed a request for review on time, the board will implement a fine collection activity that includes, but is not limited to, the following debt collection activities: Obtaining (or presenting ) of a judgment against the employer without prior notice of the board, remission of the debt for offset against tax refunds and certain other payments from the state of new york pursuant to section 171-f of the tax law of the state of new york york. All money collected goes into the Employer Uninsured Fund, the special fund used to pay uninsured claims.
The board may review penalties for a reduction offer. If you would like to request an offer of reduction, please email [email protected] or submit a written request by mail to the New York State Workers’ Compensation Board, P.O. box 5200, binghamton, new york 13902.
payment of penalties
The Workers’ Compensation Board accepts checks, money orders, and online payments, including electronic debit from a checking or savings account and credit/debit cards. a request to make electronic payments can be sent by email to [email protected].
Payments by check may be made payable to the Commissioner of Taxes and Finance and mailed to the NYS Board of Workers’ Compensation, Attn Finance Office Room 331, 328 State Street, Schenectady, NY 12305.
