Have you received a penalty notice from the New York Workers’ Compensation Board (WCB)? If so, you need to take action immediately. To avoid extremely high fines, interest, and a potential stop-work order that can destroy your business, you must appeal the penalty. In addition to steep fines, the WCB can hold business owners personally liable.
Even if the business lacks the funds to pay the penalty, the WCB can continue collection efforts by seeking a judgment against the business owners, including sole proprietors and partners. For corporate entities, all board members also have personal liability.
A penalty against the owners of a business gives the WCB the right to place liens against any real estate, including the business owner’s personal residence. As a result, the owner is unable to sell or refinance his or her home. The WCB can also levy bank accounts and seize other personal assets.
In addition, criminal charges can be filed against the owners and board members. These charges can result in additional fines, felony records, and time in jail or prison. With potential consequences this severe, it’s critical to respond to and appeal these judgments. If you have received a penalty notice, don’t delay. Contact an employment law firm experienced in these types of penalties. You have the right to a penalty review. This review can reduce fines and stop collection activities and stop-work orders. A review can save your business.
New York State WCB penalties are on the rise
In recent years, the state has increased enforcement efforts for workers’ compensation insurance law. The more aggressive enforcement has resulted in more business owners facing scrutiny. Though some business owners may have legitimate exceptions from the workers’ compensation insurance rule, they still receive violation notices and, if they do not respond with proof of the exemption, are fined. Other businesses receive violations when they have been compliant. They must prove compliance within a short 10-day time period or face fines. The state has also increased fines to a draconian level. These fines can easily destroy a small business.
If you have received a violation notice or penalty notice, take it seriously. Responding and appealing are essential. Contact an employment law firm experienced in WCB appeals to protect your business.
How violation notices and penalties occur
If you carry no workers’ compensation insurance, your company is in extreme danger, especially if a worker is seriously injured on the job. Many work-related injuries result in liability for medical biills, lost wages, and other compensable damages. Often, these total in the hundreds of thousands. In those cases, the WCB will in all probability receive a report of the injury and respond with a violation notice and penalty. This penalty includes requiring the employer to pay all expenses related to the injury, plus fines and interest. A stop work order is also likely. In this case, seeking legal counsel is essential to saving the business.
The WCB also takes a more proactive approach. It keeps a database of all employers in the State of New York. The list is collected from multiple state agencies, including the Department of State. To ensure each company in the database is compliant, the WCB requires all workers’ compensation insurance carriers to report when a policy is opened, terminated, or altered. All self-insured companies must report their activity as well.
The database is set up to flag any possible lack of compliance or policy lapses. An automatic notice is sent to all companies that are flagged. If a flagged company responds within the ten-day time limit and proves that it has insurance, is self-insured, or is exempt, then no penalty is assessed. Failure to provide proof results in a penalty being automatically assessed.
The WCB fines noncompliant companies at least $2,000 per ten days without workers’ compensation insurance. Additionally, the WCB adds interest and can assess other penalties at its discretion. The company must appeal a penalty within 30 days.
Upon appeal, the WCB may uphold the penalty, rescind the penalty, or reduce the penalty. If the company can prove good faith and compliance, there is a chance that the penalty will be rescinded. Since the WCB does not wish to force companies out of business, it may reduce the fines in less egregious cases. A skilled attorney can negotiate on your behalf to reduce fines and protect your business and personal assets.
Ignoring the penalty is the worst thing a business owner can do. If the business owners simply refuses to pay the penalty, the WCB sends to account to collections. It may attach business assets and the personal assets of the owner. The WCB will then get a court judgment, which allows it to seize assets.
You’ve worked too hard developing your business to have it destroyed by WCB fines and stop-work orders. Our attorneys will appeal the penalty and negotiate on your behalf. We will protect your business- and personal assets. If you have received a WCB penalty, call now.
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