Unisured Employer Defense

uninsured employer

Protect your company and yourself when facing and Uninsured Employer Claim

Penalties for Noncompliance (Civil)

Penalties for Noncompliance (Criminal)

Stop Work Orders

Who Is Covered By The Workers’ Compensation Law?

Virtually all employers in New York State must provide workers’ compensation coverage for their employees (WCL 2 and 3). Employers must post notice of coverage in their place(s) of business (WCL 51).

Protect your company and yourself when facing and Uninsured Employer Claim

For almost 30 years, Peter M. Cordovano, PC has successfully defended the civil and criminal aspects of Uninsured Employers Claims. In all cases, Mr. Cordovano and his personable, knowledgeable and compassionate staff have substantially reduced fines and penalties for their clients in all cases to date, has eliminated the possibility of jail his clients faced on the criminal charges.

The law requires employers operating in New York State to have Workers Compensation coverage for their employees, with limited exceptions. Employers are required to obtain and keep Workers Compensation coverage in effect for all employees, even part-time employees and family members that are employed by the company.

When an employer not covered by workers’ compensation insurance, in addition to fines, penalties and potential jail time, the following should be kept in mind:

  • WCL 26-a states an employers is liable for a penalty of $2,000 per 10 day period of noncompliance, plus the actual award (including both compensation and medical costs), plus any other penalties the Board assesses for noncompliance. In cases involving severely injured employees, the medical costs alone could be in the hundreds of thousands of dollars per injury.
  • The sole proprietor, partners, president, secretary, and treasurer are held personally responsible.
  • All uninsured employer is responsible for all wage and medical benefits awarded to anyone ruled to be their employee. There is no cap on these benefits in New York.
  • An uninsured employer is responsible for obtaining and paying for any legal representation required defend against a workers’ compensation claim something that is provided under a worker’s compensation insurance policy’s coverage.

 

Penalties for Noncompliance (Civil)

The Board monitors the coverage status of all subject employers in the State. If the Board does not have coverage information for an employer for a specific period of time, it will send out an inquiry notice to a business requiring the business to identify how I is complying with the mandatory coverage provisions of the WCL. If an employer fails to provide this information within 10 days following the Board’s request, under the WCL, the Board is required to assume that the employer is violating the WCL. (WCL 52 [3])

If no response is received, the first penalty notice will be sent. The penalties for noncompliance are $2,000 for every 10-day period without coverage (WCL 52 [5]). By the time that an employer receives the first penalty notice, the penalty may be more than $12,000. The penalty accrues for the time period in which the employer had no workers compensation coverage and had individuals providing services to the business.

Once the Board levies a penalty, businesses have 30 days from the date of the initial penalty to seek redetermination review of such penalty, explaining why there was a laps in coverage and asking for the penalty to be reduced. Information about how to seek redetermination review is located on the back of the penalty notice. The Board processes the redetermination review of penalties based on information provided by the business. Redetermination determinations may result in penalties being rescinded, reduced or upheld.

If the business has no either paid or sought redetermination review of the penalty within approximately three months, the Board sends the penalty to collection agencies. If the collection agencies are not successful in collecting the penalty, then the Board is able to issue a judgment against the business for the delinquent penalty amounts. All monies collected are deposited into the Uninsured Employer’s Fund, the special fund used to pay no insurance claims.

 

Penalties for Noncompliance (Criminal)

  1. WCL 52 [5] (a) provides that a failure to secure the payment of compensation for five or less employees within a 12 month period shall constitute a misdemeanor punishable by a fine of not less than $1,000 nor more than $5,000.
  2. Failure to secure the payment of compensation for more than five employees within 12 month period shall constitute a class E felony punishable by a fine of not less than $5,000 nor more than $50,000 and is in addition to any other penalties otherwise provided by law.
  3. Additionally, the fine for criminal conviction is from $1,000 to $50,000. (WCL 52 [1] (d)).

 

Stop Work Orders

WCL 142-b states that a business may be issued a stop work order (which requires the immediate cessation of all business activities) if workers’ compensation coverage is not in place or if there is any outstanding debt owed to the Board. Receipt of a stop work order may lead to the debarment from any State, municipal or public body Public Works contract or subcontract for 1 year (5 years for felony conviction).

 

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