Violations of Workers’ Compensation Law (Liability and Penalties) (2024)

The Workers' Compensation Law (WCL) considers most individuals providing services to a for-profit business to be employees of that business. An employee is a person who performs under the supervision, direction, and control of an employer either on or off their premises. This applies whether the worker is

  • part-time,
  • full-time,
  • temporary,
  • seasonal,
  • casual/day labor,
  • leased,
  • borrowed, or
  • unpaid – including volunteers and family members.

These employees must be covered by the employer for workers' compensation insurance as well as disability and Paid Family Leave benefits insurance.

The Board monitors the insurance coverage status of every New York State employer that is subject to the WCL (more than 800,000) and ensures they maintain coverage for their employees. The Board ensures employers in similar industries are subject to similar costs of doing business regarding required insurance.

Penalty Process

In most cases, if the Board does not have an employer's coverage information for a specific period of time, it will mail an inquiry notice to the business, asking the business to show it is complying with the WCL.

The Board may require proof that the business

  • 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
  • is keeping true and accurate business records.

If an employer fails to provide this information, the Board will assume that the employer is violating the (WCL §52 [5]) and will mail the first penalty notice. The penalties for noncompliance can be as high as $2,000 for every 10-day period without coverage. By the time an employer receives their 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.

Request a Review

A business has 30 days from the date of the initial penalty notice to request a review of the penalty, explain why there was a lapse in coverage and ask for the penalty to be reduced. The Board processes requests for review based on information provided by businesses. This review may result in penalties being rescinded, reduced, or upheld.

Collections

When a business has either not paid the penalty or has not submitted a timely request for a review, the Board will implement collection activity on the penalty which includes but is not limited to the following debt collection activities: obtainment (or filing) of a judgment against the employer without further notice from the Board, referral of the debt for offset against tax refunds and certain other New York State payments pursuant to Section 171-f of the New York State Tax Law. All monies collected are deposited into the Uninsured Employer's Fund, the special fund used to pay uninsured claims.

The Board may review penalties for an offer of reduction. If you would like to request an offer of reduction, please email PCU@wcb.ny.gov or send a request in writing by mail to New York State Workers’ Compensation Board, P.O. Box 5200, Binghamton, NY 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 billing@wcb.ny.gov.

Payments by check can be made payable to the Commissioner of Taxation and Finance and mailed to the NYS Workers’ Compensation Board, Attn Finance Office Room 331, 328 State Street, Schenectady, NY 12305.

Penalties for Being Uninsured

Failure to Secure Coverage

Criminal Penalty (WCL §52 [1] (a))

  • 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.

  • For more than five employees

    Failure to secure 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.

Civil Penalty (WCL §52 [5])

  • An employer who doesn't provide coverage for 10 or more consecutive days could receive a penalty up to $2,000 for each 10-day period of non-compliance, or no more than two times the cost of compensation for its payroll for the period of such failure.
  • This is in addition to all other penalties, fines or assessments.
  • When an employer fails to provide sufficient business records for the Chair to determine the employer’s payroll for the period requested for the calculation of the penalty, the claimed 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 liable for the penalty.

Subsequent Failure to Secure Coverage

Criminal Penalty (WCL § 52 [1] (b))

  • If an employer has been convicted of not securing workers' compensation coverage for employees within the previous five years, that employer will be guilty of a class D felony upon conviction of a subsequent violation and 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 Office of the Attorney General for prosecution.

Additional Liabilities

(WCL §26-a)

Uninsured employers are responsible for the following costs resulting from an uninsured claim:

  • All wage and medical benefits awarded to any of their employees.
  • Legal representation required to defend against a workers’ compensation claim.
  • Assessments up to $2,000 for every 10-day period of noncompliance.
  • Any other penalties the Board may issue for noncompliance as described above (WCL §52 [5]).

The uninsured employer may 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 their business for four years. (WCL §131)

Any attempt by an employer to

  • intentionally and materially understate or conceal payroll,
  • conceal employee duties to avoid proper classification, or
  • conceal any other information necessary to calculate premium paid to secure compensation,

may result in a fine of up to $2,000 for every 10-day period of noncompliance or two times 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 appropriate workers' compensation premiums by

  • paying workers "off the books,"
  • not reporting wages paid to undocumented workers,
  • misclassifying employees as "independent contractors,"
  • misclassifying the work of a business to a classification that is less hazardous (e.g., identifying all roofers as secretarial staff), and/or
  • intentionally, misrepresenting or concealing information necessary to calculate premium paid.

Failure to Maintain Accurate Payroll Records

Criminal Penalty (WCL §131 [1])

Every employer must keep an accurate record of the following:

  • Number of employees
  • Classification of employees
  • Information regarding employee accidents
  • Wages paid to employees for four years

These records should be open to inspection at any time and as often as necessary for inspection by Board investigators, authorized auditors, accountants or inspectors of the carrier with whom the employer is insured, or by any other entities authorized by statute.

Any employer who fails to keep accurate records, fails to furnish records as required, or falsifies any records will be guilty of a misdemeanor and subject to a fine between $5,000 and $10,000 in addition to any other penalties otherwise provided by law.

Any employer that has previously been subject to criminal penalties under this section within the previous 10 years will be guilty of a class E felony, and subject to a fine between $10,000 and $25,000 in addition to any penalties otherwise provided by law.

Civil Penalty (WCL §131 [3])

If an employer fails to keep accurate payroll records, the Board Chair may impose a penalty of $1,000 for each 10-day period of non-compliance. This penalty is in addition to all other penalties, fines or assessments, or a sum not more than two times the cost of compensation for its payroll for the period of such failure. Fees collected will be paid into the uninsured employers’ fund.

When an employer fails to provide business records necessary for the Chair to determine the employer’s payroll for 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 shall 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 liable for the penalty.

Stop Work Orders

If workers' compensation coverage is not in place, or if there is any outstanding debt owed to the Board, a business may be issued a stop work order. A stop work order requires the immediate stop of all business activities. (WCL §141-a)

Debarment

New York State governmental entities including State, county and municipal agencies may not enter into a public works contract with businesses that are listed on a Debarment List. The 2007 Workers' Compensation Reform Legislation included provisions that would prevent employers that had various types of workers' compensation noncompliance infractions from bidding on public works projects. (WCL §141-b)

Those convicted of a misdemeanor under the WCL, and any substantially owned affiliated entity of such person, or those subjected to civil fines, penalties, or a stop-work order under the WCL, are barred for one year from bidding on public works contracts or subcontracts with the state. (WCL §26, 52 or 131). There is a five-year ban for felony convictions, or violators of the discrimination provisions of the WCL. (WCL §125 or 125-a)

View Public Works Contract Debarment List

Violations of the Fair Play Act

Contractors who violate the Fair Play Act by failing to properly classify employees will be subject to civil penalties of up to a $2,500 fine per misclassified employee for a first violation and up to $5,000 per misclassified employee for a second violation within a five-year period. A Workers' Compensation Law 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 penalty of up to 30 days in jail, up to a $25,000 fine, and debarment from bidding on or being awarded any Public Works contracts for up to one year for a first offense.

Subsequent Offenses

Subsequent misdemeanor offenses would be punishable by up to 60 days in jail, up to a $50,000 fine, and debarment from bidding on or being awarded any 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 the WCL, Labor Law, or Tax and Finance Law.

Failure to Report an Injury

Failure to file a First Report of Injury form, or failure to file it timely, may result in a penalty of up to $2,500.

Personal Accountability

The following individuals are personally liable for a business’ failure to secure workers’ compensation insurance:

  • Sole proprietor
  • Partners
  • President, secretary, and treasurer of a corporation

Need Help?

The Office of the Advocate for Business can assist employers with penalties and what you need to do to get in compliance. Visit the Advocate for Business page for additional information, or contact the office directly by calling (518) 486-3331, or emailing advocatebusiness@wcb.ny.gov.

Violations of Workers’ Compensation Law (Liability and Penalties) (2024)

FAQs

What is the penalty for workers comp in NY? ›

The penalties for noncompliance can be as high as $2,000 for every 10-day period without coverage. By the time an employer receives their first penalty notice, the penalty may be more than $12,000.

What is the penalty for workers comp in NJ? ›

by failing to obtain workers' compensation insurance coverage. This is in violation of NJSA 34:15-79 and is punishable by up to 18 months in jail and a $10,000 fine, in addition to substantial civil penalties.

How do I appeal a workers comp penalty in NY? ›

Appeals must be filed within 30 days of the filing date of the judge's decision [Workers' Compensation Law § 23]. Doctors, pharmacies and other medical service providers may not appeal. An injured worker may file an appeal regarding the payment of medical bills, by the insurer, to a treatment provider.

What is the liability of workmen compensation? ›

Workers' Compensation Liabilities means all Liability for or arising out of workers compensation from and after the date of first injury, exposure, incidence, event or other occurrence, regardless of when claims, expenses or medical assistance therefrom are made or incurred.

Can you be terminated while on workers comp in NY? ›

If you're on workers comp after an injury and you're covered by the FMLA, your employer can't fire you within twelve weeks of your injury. Your employer also can't fire you after twelve weeks of suffering an injury if they solely based their reason for firing you on the fact that you filed a workers comp claim.

How long does it take to settle a workers comp case in NY? ›

How Long Does It Take to Reach a Settlement for Workers' Comp? The entire settlement process—from filing your claim to having the money in your hands—can take around 12-18 months depending on the details of your case and whether or not you have legal representation.

Can you get fired on workers comp in NJ? ›

No, a New Jersey employer cannot fire you for filing a workers compensation claim. It is illegal for an employer to let you go because you filed a claim.

How long does it take to settle a workers comp case in NJ? ›

Many factors affect the time between your work injury and getting a workers' compensation settlement. Some cases can take several weeks; others may take a couple of years.

Can you terminate an employee on workers comp in NJ? ›

In most cases, you can still be terminated from your job while receiving workers' compensation. But there are circumstances in which being fired while on workers' comp may be against the law in New Jersey.

What is Section 23 of the New York State workers Compensation Law? ›

Section 23 is part of NY Labor Law 241, and specifically covers protections for workers in construction, demolition, and excavation. The code covers a wide range of construction work aspects, laying out clear standards for running a safe job site and enforceable provisions when injuries occur.

Can workers comp stop paying without notice in NY? ›

An employer cannot simply stop paying you these benefits. There is a process they must take to notify you of the change. You have the right to petition against that change as well. That provides you with some protection against losing your benefits for no reason.

Can you waive workers compensation rights NY? ›

Workers' compensation claims may not be released or waived unless the employer and employee follow a prescribed settlement process. A release agreement executed after an employee has filed a workers' compensation claim is valid if the release has been approved by the New York State Workers' Compensation Board (N.Y.

What are employer liabilities? ›

Employer's liability is the legal responsibility of an employer to pay damages to an employee who suffers a work-related injury or illness, which can often result in an expensive lawsuit. Your employer's liability insurance can help offset those legal costs, as well as any settlement.

Is employers liability the same as general liability? ›

While general liability covers a business from 3rd party claims such as customer injuries or negligence, it does not provide coverage for employee-related negligence. Employers liability fills the gap by responding to legal claims filed by injured workers.

Which of the following is not typically provided by workers compensation? ›

Illegal activities: Employee injuries due to illegal activities at the worksite are not covered by an organization's workers' compensation insurance policy. Policy violations: Workers' comp does not cover employees who are injured while violating company policies, procedures and protocols.

Does my employer have to hold my job while on workers comp in NYS? ›

Employers are not required to hold positions.

Workers' Compensation Law does not require your employer to keep your job open for you. However, most employers do take injured workers back. Stay connected with your employer about your job status.

What is the employer's responsibility when a worker is injured? ›

After an injury or illness occurs, your employer must: Provide a workers' compensation claim form to you within one working day a work-related injury or illness is reported. Return a completed copy of the claim form to you within one working day of receipt.

What happens if you quit your job while on workers comp in California? ›

If you quit while on workers' compensation, you lose the right to collect temporary disability benefits. Workers who suffer severe injuries on the job may be given a permanent disability rating. If you have a permanent disability, quitting before your condition stabilizes could reduce the amount you ultimately receive.

What is the highest workers comp settlement in New York? ›

New York State law does not limit the amount you may receive if you decide to settle your workers' compensation claim. The maximum settlement amount is whatever your representation and the insurance carrier's representation agree to set in your individual case.

What is the biggest workers comp settlement? ›

$6.2 million workers comp settlement for a construction worker struck in the head (Virginia) An 18-year-old construction worker suffered a traumatic brain injury after being struck by a heavy piece of equipment on the job.

How long does it take to get a compensation payout? ›

After your claim has settled you should receive your compensation between 14 – 21 days. This depends on if your claim was settled in or out of court.

Does my employer have to hold my job while on workers comp in NJ? ›

Workers' compensation benefits provide income protection, not job protection, and an employer can legally fire an employee who is out on disability. There are situations, however, where an employee may have legal grounds to file a lawsuit against their employer for wrongful termination.

Can my employer cancel my health insurance while on workers comp in NJ? ›

There is nothing in the New Jersey Workers' Compensation law that prevents an employer from discontinuing an employee's health benefits coverage while they are unable to work as a result of a job-related injury.

How does workers comp work near New Jersey? ›

Workers' compensation is a “no fault” insurance program that provides medical treatment, wage replacement, and permanent disability compensation to employees who suffer job-related injuries or illnesses. It also provides death benefits to dependents of workers who have died as a result of their employment.

What is Section 20 of workers comp in NJ? ›

Section 20 Workers Compensation Benefits

The goal is to reach an amicable settlement on your behalf. The term Section 20 comes from NJSA 34:15-20, the portion of the New Jersey State statutes that discusses disputed workers compensation cases. The end result is that the parties agree to a lump sum settlement.

How long does it take for workers comp to pay NJ? ›

Claims that are not in dispute may be paid as soon as 30 to 60 days of filing, and in fact, where there is no dispute you may be entitled to interest if the payment is delayed beyond 60 days. If your employer or the insurance company disputes some aspect of your claim, your case may have to be scheduled for trial.

What is a permanency award in NJ? ›

What is a Permanency Award? A permanency award is a type of workers' compensation benefit in New Jersey. This benefit is provided to employees who suffer partial or total loss of a body function after a work injury.

Is workers comp taxable in NJ? ›

Fortunately, workers' compensation benefits are not taxable. Neither the New Jersey Division of Taxation nor the Internal Revenue Service (IRS) taxes medical or disability benefits received through workers' comp.

What is Section 11 of NY workers compensation law? ›

Section 11 of the New York Workers' Compensation Law also bars third parties from suing an injured worker's employer for contribution or contractual indemnification unless the employee has sustained a “grave injury” as defined by law.

What is Section 13 of NYS workers compensation law? ›

Any compensation claimant who pays a fee to a provider of health care for medical care or treatment under this chapter shall have a cause of action against such provider of health care for the recovery of the money paid, which cause of action may be assigned to the chair in trust for the assigning claimant.

What is Section 125 of the New York workers compensation law? ›

New York State Workers' Compensation Law Section 125 makes it unlawful for any employer to: (1) inquire into whether a job applicant has previously filed a claim for compensation benefits, or (2) discriminates in hiring a job applicant who has filed a claim.

Can I sue my employer for not paying me on time NY? ›

You have two options for recovering unpaid wages. You can file a wage claim with the New York Department of Labor, which will investigate your claim, hold a hearing, and help you recover any wages your employer owes. Alternatively, you can file a lawsuit in court.

Do you have to pay workers comp back in NY? ›

The New York City Employees Retirement System (NYCERS) can and will demand money back. ¾'s is the most you can collect. You must pay back whatever you get in Comp money to NYCERS, or stop getting Comp payments. NYCERS WILL come after you.

Is workers comp mandatory in NY? ›

Is Workers' Compensation Coverage Required? Virtually all employers in New York State must provide workers' compensation coverage for their employees (WCL §2 and 3).

What is Section 29 of the New York State Workers Compensation Law? ›

Thus, under Workers' Compensation Law Section 29(1), the carrier is granted the opportunity to maintain a lien against monetary relief the claimant receives from a third-party action and recover two-thirds of the paid indemnity compensation and medical expense on the workers' compensation claim.

What is New York Workers Compensation Law section 44? ›

Workers' Compensation Law § 44 provides that in occupational disease cases “[t]he total compensation due shall be recoverable from the employer who last employed the employee in the employment to the nature of which the disease was due and in which it was contracted.” In other words, the responsible employer in ...

What is NY Workers Compensation Law Section 10? ›

According to workers' compensation law, WCL §10, in order for an employee to be entitled to workers' compensation benefits, he or she must be an actual employee of the employer when they are injured at work.

Under what situations an employer is not liable to pay compensation to the employee? ›

the injury is self-inflicted; the death or incapacity results from the injury (including all occupational diseases which are specified in the ECO) that the employee has falsely claimed to be free of to the employer; or.

What are examples of employee liabilities? ›

Some common examples of employee liabilities are: Legal liabilities: Employees must comply with all applicable laws and regulations, such as employment laws, safety standards, and privacy regulations. Failure to do so may result in fines, penalties, or even legal action against the individual or the company.

Can an employer be held liable? ›

Employers are vicariously liable under the doctrine of "respondeat superior" for the negligent acts or omissions by their employees in the course of employment. The key phrase is "in the course of employment".

Which of the following would not be covered under employers liability insurance? ›

However, employers' liability insurance does not cover legal costs from employee lawsuits charging discrimination, sexual harassment, or wrongful termination. To cover these situations, an employer would need to purchase a separate type of policy called employment practices liability insurance (EPLI).

What state has the highest workers compensation? ›

New Jersey, which has the highest rates in the country, requires every employer to carry workers' comp coverage, unless they are covered by a federal program.

What is the legal term for employer liability? ›

Vicarious liability is a legal term that is often used in employee-employer situations when an employee will cause harm to somebody, and the employer is held vicariously responsible because of their professional relationship with the employee.

What is not included in compensation? ›

Employees' contribution to social security schemes are not included in compensation of employees, whereas, wages and salaries in cash and windfall gains are included in compensation of employees.

Which situation qualifies an employee for workers compensation coverage? ›

Which situation qualifies an employee for workers' compensation coverage? Employees may be eligible for workers' compensation if they suffer an accident or injury while working. Illnesses that occur as a result of exposure in the work environment may also be covered by the employer's policy.

What is the primary objective of workers compensation? ›

The primary objective of the unit is to return the injured or ill employee(s) to gainful employment as quickly as possible.

What is the coming and going rule for workers comp in NY? ›

Going from and coming to work

Normally, injuries incurred during regular commutes to and from work are not covered by workers' compensation as the time spent and act of commuting is not part of the scope and course of employment. This is called the going-and-coming rule.

What is the statute of limitations for workers comp in NY? ›

If you have been injured while on the job in New York, you should pursue the benefits you are entitled to as soon as you can. The statute of limitations for workers' compensation claims is two years.

How does workers comp work in NY? ›

Workers' compensation is a no-fault system that provides wage replacement benefits and lifetime medical care for work-related injuries and illnesses. All for-profit employers and most not-for-profit employers must carry workers' compensation insurance to cover all their employees.

What is NY Work Comp Law 13? ›

Any compensation claimant who pays a fee to a provider of health care for medical care or treatment under this chapter shall have a cause of action against such provider of health care for the recovery of the money paid, which cause of action may be assigned to the chair in trust for the assigning claimant.

How long does it take to get paid from workers comp in NY? ›

Within 18 days of notification of Injury/Illness

The insurer begins the payment of benefits if lost time exceeds seven days. Insurers will often accept a claim and promptly begin paying benefits.

Who is exempt from workers compensation in NY? ›

Workers' Compensation coverage is not required if the business is a one or two person owned corporation, with those individuals owning all of the stock and holding all offices of the corporation (each individual must hold an office and own at least one share of stock).

How long do I have to sue for work related injuries in NY? ›

If you want to sue your employer for an injury incurred at work, you have to do it within three years in most cases. This time limit is known as the statute of limitations.

What is the statute of limitations for injury in NY? ›

The statute of limitations is different for every type of lawsuit, but the personal injury statute of limitations in New York is generally 3 years from the date you were injured or the date you were diagnosed with the injury.

How long does NYS compensation last? ›

The maximum number of weeks is set forth in statute as follows: 525 weeks for loss of wage earning capacity of greater than 95% 500 weeks for loss of wage earning capacity of greater than 90% through 95% 475 weeks for loss of wage earning capacity of greater than 85% through 90%

How much do you get paid on workers comp in NY? ›

Compensation Rates

An injured employee is entitled to a compensation rate equal to two-thirds of the average weekly wage (AWW) in New York State for the 52-week period immediately prior to the date of accident. The rate is subject to prescribed maximums and degree of disability.

Who pays for my health insurance while on workers comp in New York? ›

If you cannot work because of your work-related injury, you could receive lost wages benefits from your employer's workers' compensation insurer. You can pay your health insurance premiums from the lost wage benefits you receive from workers' compensation.

What is the minimum rate for workers comp in New York State? ›

Minimum Weekly Benefit

The weekly benefit cannot be less than the minimum benefit amount. The minimum benefit amount is $150.00 per week for accidents occurring after 5/1/13.

References

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