2012 EMPLOYMENT LAW UPDATE: Since January 1, 2012, hundreds of small businesses and homeowners, who employed workers or nannys, respectively, have received penalities or judgments for failing to carry workers’ compensation insurance. While it is reasonable to penalize employers for failing to carry the required coverage to protect if a worker gets injured on the job, the penalty levels are draconian and do not seem reasoanble under the circumstances. For example, if a small business did not a carry worker’s compensation insurance policy which is typically approximately $500.00, New York State may have fined that same small business employer over $50,000.00 for this violation. Among the businesses issued a penalty or judgment were celebrities Jay-Z, music superstar, and Al Franken, former Star of Saturday Night Live and current Minnesota Senator. While there is an important policy reason for employers to carry worker’s compensation insurance to protect employees and so that the costs are proportionately spread among all employers, these level of draconian penalties are causing employers to close their operations and terminate any employees they may have had. In the end, employees are losing their jobs, small businesses are closing and New York State is stuck referring the judgments to debt collectors to collect these improbable amounts. If you have received a notice of penalty or notice of judgment, contact one of our experienced New York attorneys to learn how to protect your assets. Our NYS Workers Compensation Board Penalty Defense Lawyers have saved small businesses and homeowners over $1,000,000.00 in penalties and fines and can help you.
Under the Law, employers (and homeowners who employ a nanny in under circumstances) are required to carry insurance for employees for work-related accidents or injuries. If an employer has one or more employees, the Company is required to obtain a workers’ compensation insurance policy. There are only a few limited circumstances where coverage is not required – generally, the following employers are exempt from coverage:
The company is owned by one person and said person holds all corporate office titles and is the only employee; and The company is owned by a husband and wife and they hold all of the corporate office titles and are the only employees.
In a particularly problematic provision for companies and homeowners, if a well-intentioned family member (including a spouse or adult child) works for the business and even if that relative does not collect a salary, that family member is considered an employee by the Workers Compensation Board. Furthermore, in recent years, the Workers Compensation Board has increased its scrutinizes small businesses that utilize independent contractors and may consider them employees depending on the circumstances. Simply calling an individual an independent contractor is not a sufficient basis for not carrying worker’s compensation insurance coverage.
PENALTIES FOR FAILING TO CARRY WORKERS’ COMPENSATION INSURANCE Under Section 52 of the Law, if a business with more than five employees fails to carry a required workers’ compensation policy, its owners could be subject to a class E felony. If an employer with fewer than five (5) workers fails to carry a required workers’ compensation policy, such failure shall constitute a misdemeanor. Critically, if an employer does not have worker’s compensation insurance and an employee suffers a work-related injury, the employer shall be responsible for all of the costs of the worker’s compensation claim including but not limited to the employee’s medical bills and compensation payments. These costs are in addition to the fines and penalties issued by the New York State Workers Compensation Board. Non-compliant employers are issued a penalty in the sum of $2,000.00 for each ten-day period it lacks coverage in 2012. See Section 52(5).
Employers who have received a “Notice of Penalty” or Judgment from the New York State Workers’ Compensation Board should immediately seek advice from experienced legal counsel. Our attorneys know the intricacies of the Workers’ Compensation Law and the Workers’ Compensation Board’s procedures and can assist you. We have saved our clients over $1,000,000 in penalties and fines. Call now to speak with one of our New York Workers Compensation Penalty Defense Attorneys at (800) 893-9645.
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