New York Workers Compensation Fines
Faced with fines for failing to have the required New York State Workers Compensation coverage, companies often do not know what to do. Simply ignoring the penalty letters is not an option. This will lead to increased amounts of fines and penalties due. The penalties for non-compliance with workers compensation can range from a few thousand dollars to egregious amounts in the tens of thousands of dollars.
The Workers Compensation Board performs systematic audits of companies doing business in New York to make sure that these companies with employees in New York have the proper workers compensation coverage. My business clients are located throughout the United States in New York, California, Texas, Arizona, New Jersey, Florida, and Connecticut, and retained me when faced with these, often exorbitant, penalties.
Notice of these penalties is delivered in the form of a letter from the New York State Workers Compensation Board and they should not be ignored. The penalties for failing to have Workers Compensation coverage are both governed by Section 52 of the Workers Compensation Law and allow for both criminal and civil prosecution.
Criminal – Section 52(a) of the Workers’ Compensation Law provides that the:
Failure to secure the payment of compensation for five or less employees within a twelve-month period shall constitute a misdemeanor, and is punishable by a fine of not less than one thousand nor more than five thousand dollars. Failure to secure the payment of compensation for more than five employees within a twelve-month period shall constitute a class E felony, and is punishable by a fine of not less than five thousand dollars nor more than fifty thousand dollars in addition to any other penalties otherwise provided by law.
Civil – Section 52 of the Workers Compensation Law provides that:
The chair, upon finding that an employer has failed for a period of not less than ten consecutive days to make the provision for payment of compensation may impose upon such employer, in addition to all other penalties, fines or assessments provided for in this chapter, a penalty of up to two thousand dollars for each ten day period of non-compliance or a sum not in excess of two times the cost of compensation for its payroll for the period of such failure, which sum shall be paid into the uninsured employers’ fund. When an employer fails to provide business records sufficient to enable 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 1.5. Where the employer is a corporation, the president, secretary and treasurer thereof shall be liable for the penalty.
Can you be personally liable for these penalties even if you are incorporated?
The simple answer is yes. If you are an officer of a corporation, you are NOT protected by the “corporate veil, which ordinarily provides protection for corporate officers.
What about bankruptcy, can you discharge any debt owed to the Workers Compensation Board?
Generally speaking…No. Workers compensation debt owed is generally not dischargeable through bankruptcy.
Now that you have received a penalty letter what should you do?
- Breathe. If you’ve taken the step to call me, know I specialize in getting the best resolution available for my client. Unlike many attorneys, I am straight forward. I don’t tell you want you want to hear, that is for your friends and family. I will explain to you the good and the bad, so you know and understand all your options.
- Resolving these penalties can be a process that requires your involvement. With this being said, the goal is for you to run your business without having to worry any further about the Workers’ Compensation Board. My involvement means you run your business while I work for you to resolve the penalty and fines with the Board.
- While I can’t promise you a result, since every situation is different, I can tell you that I’ve been very successful in having these penalties reduced, if not eliminated altogether.
As concerned and frustrated as you may feel at this moment, please know that I am available to help. Whether by calling me at (845) 634-7701 or by contacting me by email at Scott@bf-legal.com, there is no charge for my consult.