New York Workers’ Compensation Defense for Uninsured Employers

New York Workers’ Compensation law requires almost all employers operating in New York State to have workers' compensation coverage for their employees. New York Employers must purchase insurance coverage through an insurance carrier or obtain authorization from the Workers’ Compensation Board to be self-insured. Employers must obtain and keep in effect workers' compensation coverage for their employees; there must be no lapse in coverage even when switching insurance carriers.

However, there are only very limited situations where for-profit businesses are exempt from providing workers' compensation coverage, including:

1. The business is owned by one individual with no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors and is not a corporation; or

2. The business is a partnership under the laws of New York State, and there are no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors; or

3. 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 and there are no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors. Specifically, if two people own the corporation, each person must own at least one share of stock and between them own all the shares of stock in the corporation. In addition, they both must be corporate officers and between the two of them hold all the offices of the corporation.

A Few Things New York Employers Should Know

An employer must also keep accurate records of the number of employees, classification, wages and accidents for their business for four years. Failure to keep adequate and/or accurate records may result in a fine of $1,000 per every 10-day period of noncompliance or two times the cost of compensation. Additionally, the fine for criminal conviction is from $1,000 to $50,000.

Some examples of misrepresentation include failure to pay appropriate workers’ compensation premiums by:

1. Paying workers “off the books”,
2. Not reporting wages paid to illegal aliens,
3. Misclassifying employees as “independent contractors,” and
4. Misclassifying the work of a business to a classification that is less               hazardous (identifying all roofers as secretarial staff), and/or
5. Intentionally, materially misrepresenting or concealing information pertinent to calculation of premium paid.

Liability for Claims Filed by an Injured Employee and Employer is Uninsured

Under New York Workers’ Compensation law, an employer 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. The cost of medical treatment and compensation could be in the hundreds of thousands of dollars per injury.

It is also important to note that a sole proprietor, partners or the president, secretary and treasurer of a corporation are personally liable for a business’ failure to secure workers’ compensation insurance.

If you are an uninsured employer and your employee filed a claim for New York Workers’ Compensation benefits as a result of a Workplace injury or illness, you should consult with an experienced New York Workers’ Compensation Defense attorney. The liability could be devastating and could cause you to go out of business. Put our qualified Queens Workers’ Compensation lawyer s to work for you and defend your rights.