NY Workers Comp Board Goes After Businesses without Coverage

The New York State Workers’ Compensation Board has issued 1,000 stop-work orders to New York businesses that have failed to carry workers’ compensation insurance.

Published on September 8, 2008

The board was given the authority to take this type of action less than 14 months ago and issued it first stop-work order in July 2007.

Also, $7 million in fines were also levied statewide against those businesses. Of that, $5.49 million in fines were for businesses that did not have the mandatory insurance protection for injured workers and $1.57 million were for failing to produce business records that show items like the number of employees, the wages paid and classification of employees.

“The public can expect our compliance staff to aggressively enforce the law that says businesses in this state must carry insurance to protect its workers,” Workers’ Compensation Board Chairman Zachary Weiss said in a prepared statement.

The collected fines are placed into the Uninsured Employers Fund, which is used to pay the claims of injured workers whose employers do not carry the required insurance. New York’s fund is currently operating at a surplus, standing today at $49.2 million.

In June, the penalty for failing to maintain insurance coverage was increased to $2,000 for every 10 days out of compliance, up from the $1,000 penalty established as part of the 2007 Workers’ Compensation Reform Act. Before the reforms were implemented, the penalty was $250 for every 10 days.

Since March, 931 stop-work orders have been issued. Board investigators serve them on compliance sweeps. Carriers must also advise the state whenever a workers’ compensation policy is written or canceled, which makes it easier to identify businesses that don’t carry insurance.