DiNapoli's Audit of Asbestos Control Bureau Finds Problems

The New York State Office of the State Comptroller, run by Thomas P. DiNapoli, performed an audit titled "Assessment and Collection of Selected Fees and Penalties" of the New York State Department of Labor (NYSDOL) to determine if the NYSDOL was assessing and collecting all required fees and penalties.  The audit covered the period April 1, 2008 through July 31, 2011. The focus of this blog will be on the comments made regarding the Asbestos Control Bureau (ACB).

The overall key findings of the audit found:

• The NYSDOL does not assess and collect all required fees and fines.  In total, the Department did not collect about $3.8 million, including associated penalties.
• The NYSDOL does not have accurate records to show who is required to pay boiler inspection and asbestos-related project fees.  As a result, the health and safety of New York State residents may be at risk and potential revenue is not realized.

Details of this audit found:

• Most contractors adhere to the self-notification process and pay the required project notification fee.
• However, the Department has no method for determining whether there are other contractors that should be paying the fee, or how much the fee should be.
• As a result, there is no way to know how much more the Department could be collecting in revenue each year.
• To determine whether there are contractors which did not pay the required project notification fee, we obtained a list of landfills throughout the State that accepted asbestos and reviewed their associated documentation. In total, landfills accepted asbestos from 50 projects during our audit period where the amount of asbestos contaminated refuse disposed was at least ten tons.  We found that 45 out of the 50 contractors paid the project notification fee (one was exempt).  We averaged the amount paid by the 45 projects and estimate that the Department could have collected an additional $6,992 for the remaining four projects ($1,748 per project).
• The audit noted that the project notification fee was not equitable, as small asbestos projects can pay as much as those that are much larger. For example, a project with 1,725 linear feet and 35,263 square feet would pay the same $4,000 maximum fee as a project with 1,650 linear feet and 1,000 square feet. The Department should review this structure to determine whether a more equitable fee structure could be created based on the size of a project to provide greater equity and possibly increase revenue. Fees are statutorily set and any revisions would have to be sought through a change in the statute establishing the fees.

NYSDOL ACB's response to the audit is included in the document.  That response was:

• In 2011, NYSDOL used a reconcilitaion of Department records to ensure and verify that asbestos contractors, building owners, & others in the regulated community follow all regulations.
• This reconcilitation included examination of air monitoring records, demolition permits, site-specific variances, surveys, & waste manifests.
• Elevated air monitoring reports are cross checked with notifications listed in the system.
• Demolition permits from all major cities and many towns, villages, & smaller cities have been obtained.  Local fire companies is listed as another source of information, regarding a list of fires in their area (late 2011 this started).
• In early 2012 contact with all major landfills that accept friable waste for access to data was established.  Some of these landfills have begun sending monthly waste manifests for their site.  ACB has now expanded the contact to landfills outside NYS that accept waste from NY.
• ACB has discussed possibly changing the fee structure, however, revisions need legislative action.

Based on the above, ACB feels this is sufficient to protect the public.  We strongly disagree!  We recommend the following, in addition to what they are already doing:

• ACB should investigate all emergency response, plumbing, electrical, roofing, floor tile, and siding contractors for licensing and certification of their workers.  If these contractors indicate the subcontracting of asbestos work require proof of subcontracting, and proof of asbestos inspections performed before they performed work on materials that were not ACM.
• ACB should investigate Department of Public Works, Water Authorities, and other water works companies that manage asbestos cement pipe systems for licensing, certification, and work practices. 
• ACB should also initiate contact with landfills that accept nonfriable ACM (construction /demolition waste) throughout NYS.  Most of the illegal dumping is going on at these sites.
• ACB should cross train the Boiler inspectors to recognize ACM.  This would allow them to inform the ACB of suspicious activities.

As we've complained before, ACB needs to spend more time/resources investigating those that are breaking the rules by not notifying, not air monitoring, and not disposing ACM properly versus those in the asbestos industry who according to Mr. DiNapoli's audit are mostly following the rules.

Related articles

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• Nassau: 61 unlicensed contractors caught in Sandy sting
• The practical manifestation of safety leadership

What Out-of-State Employers with Employees Working in New York State Need to Know.

We received a recent newsletter from Dan Borgna at the Dale Group.  The newsletter discussed the Workers Compensation/Disability requirements for out-of-state contractors.  We found it very interesting with permission from Mr. Borgna of the Dale Group (Thank you for allowing us to reprint it) here is the newsletter post:  

 

If you have no office location in New York, but have employees on site in NY, this article is important to your business.

WORKERS COMPENSATION INSURANCE REQUIREMENTS

New York State workers' compensation insurance covers employees for work-related accidents, injuries or illness.   
As part of the 2007 Workers' Compensation Reform Legislation, all out-of-state employers with at least one employee working in New York State will be required to carry a full statutory New York State workers' compensation insurance policy. The workers' compensation insurance policy must be effective no later than the first day you have employees working in NY State.  

Misconception - "I have all states coverage listed in section 3.c of my home state workers compensation policy".
Reality- As part of the reform, having "all states" in section 3.c is no longer valid. "NY" must be specifically listed in section 3.a of the workers compensation declarations page or endorsement. 
Penalties - Failure to maintain this coverage can result in the following: 

1.     Failure to carry Workers' Compensation Insurance for more than 5 employees within a twelve month period is a class E felony and is punishable by a fine not less than $5,000 nor more than $50,000.

2.     For 5 or less employees within a twelve month period, it is a misdemeanor punishable by a fine not less than $1,000 nor more than $5,000.

3.     Subsequent convictions within a 5 year period shall constitute a class D felony and fines not less than $10,000 nor more than $50,000.

4.     Any employer who fails to maintain a workers' compensation policy when it is required or owes a fine or assessment to the Board may be issued a stop-work order, meaning the business must shut down all activity until the order is lifted.

5.     A penalty in the sum of $2,000 for each ten-day period of non-compliance or a sum not in excess of two times the cost of compensation for the period of such failure may be imposed 

DISABILITY BENEFITS INSURANCE REQUIREMENTS

NY State statutory disability benefits (DB) insurance coverage is totally different from and is not included in NYS workers' compensation insurance coverage. Statutory NY State disability benefits insurance covers employees for off-the-job accident, injury or illness.
If you have one or more employees for 30 days in a calendar year, you are required to obtain NYS disability benefits insurance coverage. Such insurance must be effective no later than four weeks after the 30th day you have employees.  

Penalties under the Disability Benefits Law 

1.     Failure to carry Disability Benefits Insurance is a misdemeanor punishable by a fine of not less than $100 nor more than $500 or imprisonment for not more than one year, or both, with increased monetary penalties for second and third or subsequent violations, and

2.     Where an employee of a non-insured employer is disabled due to an off-the-job injury or illness, the noninsured employer will be responsible for payment of the amount of benefits to which the employee is entitled or for payment of 1% of his/her payroll for the period of non-compliance, whichever is greater. And

3.     Where an employer fails to carry Disability Benefits Insurance, the Chair will impose a penalty not in excess of ½ of 1% of the employer's weekly payroll for the period of non-compliance and a further amount not in excess of $500 

Employees traveling through the State not stopping for deliveries, pick-ups, or other work are not deemed to have worked a day here. An employer that has reason to know that it will meet these criteria in the current year, even if it has not done so in the prior year, must obtain the required coverage.

For a complete description of the Form and Regulation, please visit the following link at the New York State Workers Compensation Board.

http://www.wcb.ny.gov/content/main/forms/oc923.pdf 

If you are concerned that your company may not be compliant, please contact Dan Borgna at Dale Group (973)437-9664 or danb@dalegroup.com who will be happy to discuss the matter with you.

Related articles

• Does your business need workers' compensation insurance? (hiscoxusa.com)
• Workers Compensation back-and-forth (timesunion.com)
• Evidence exists of productivity benefits of OHS but no one is using it (safetyatworkblog.com)