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Lawyers Fighting Your New York State Workers Compensation Penalty or Fine — Legal Analysis Part 1

Thumbnail image for top.lawyers.arrive.mag.2011.jpgWhat are the Risks of Non-Compliance with the Workers Compensation and Disability Benefits Law?

In recent years our experienced Penalty Defense Attorneys have been sought after because NYS has increased its efforts to penalize small businesses and homeowners who fail to secure workers compensation and disability benefits insurance coverage. Employers are required to have both insurance policies in place before the first day that an employee reports to work. Covered employers can obtain coverage from the New York Insurance Fund or private insurance carriers. If a business does not obtain the required insurance coverages, it faces severe civil (i.e. monetary) consequences and potential criminal charges. If a covered employer with more than 5 employees fails to obtain a workers’ compensation policy, it may be charged with a Class E felony and may be assessed a fine not less than $1,000 and not more than $50,000.00. See Section 52(1)(a). If a covered employer has less than 5 employees, it may be charged with a misdemeanor, a criminal charge that is lower than a felony, and may be issued a fine of not less than $5,000 and not more than $50,000.00. Section 52(1)(a). Repeat violations in the following five years are a basis for imposition of a Class D felony and a fine of not less than $10,000.00 and not more than $50,000.00. Section 52(1)(b). Importantly, if a small business does not have the workers compensation insurance and workers is injured, the employer could be responsible for all of the employee’s medical expenses and the total amount of the claim. This amount can be devastating for a business. Even if a worker is not injured at the work site, the Board can issue you significant monetary fines. Call now at (800) 893-9645 to speak with one of our experienced defense lawyers for a confidential telephone consultation and learn how to protect your business and assets. Our Firm has saved small businesses over One Million Dollars ($1,000,000.00) in penalties and fines.

What are the Civil and Criminal Penalties for not having required insurance coverages?

An employer who violates the WC law (knowingly or unintentionally) can be assessed a penalty of $2,000.00 for every 10 day period of non-compliance. See Section 52(5). In addition, companies are required to maintain employment records regarding their workers, classifications of their workers, wages paid, and if any work-related accidents occurred. See Section 131(1). Failure to preserve such documentation can be a basis for a fine of not less than $5,000.00 and not more than $10,000.00 and additional civil fines. Section 131(1). Repeat violators are subject to a Class E felony and a fine not less than $10,000.00 and not more than $25,000.00. Section 131(1). Not only can these fines and potential criminal charges can be a death sentence for most businesses, you could also be issued a Stop-Work Order. If you are not in compliance with the law, you may be forced to shut down your business until the Order is removed by New York State. Section 141-a(4). If your business is subject to such an Order, you will also be barred from certain public contracts. Section 141(b). Our lawyers can help you save your business and keep it open.

An employer who violates the DB law, intentionally or unintentionally, can be issued a penalty of not more than .5% of the company’s weekly payroll for the period of non-compliance and an additional amount not more than $500.00. Section 220. If an employee files a disability benefits claim and the company is not insured, it could be responsible for the employee’s benefits or 1% of the company’s payroll for period of non-compliance. Section 213. Finally, failing to carry insurance is a misdemeanor with a fine of not less than $100.00 but not more than $500.00 and/or imprisonment for not more than one year. Section 220.

As you can see, the penalties for non-compliance are severe. It is very important for you to secure experienced legal counsel as soon as you receive the penalty notice. Ignoring the notice is the worst thing you can do. Your fine could turn into a judgment by which New York State can seize your assets including your bank accounts. Not every employer is required to have coverage as the law provides for certain exceptions and defenses. Call now to speak with one of our Defense Lawyers at (800) 893-9645 to learn your rights.


Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.

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