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.
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part of the reform, having "all states" in section 3.c is no longer
valid.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.
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