Business owners often receive heart-stopping letters from the New York Workers Compensation Board (WCB). These letters state that their businesses have been flagged for possible noncompliance with the requirement that businesses carry workers’ compensation insurance. Once the WCB sends one of these notices, the onus is on the business owner to prove compliance with the law. Failure to do so results in severe penalties. These penalties are often in the tens- or hundreds of thousands of dollars.
Few businesses can absorb such stiff penalties. Worse, business owners can be held personally liable. Corporate board members are also personally on the hook. Egregious violations can result in criminal charges.
How to ensure compliance
All employers operating in New York State must carry workers’ compensation insurance. It makes no difference if the business operates in an industry where injuries are foreseeable, such as construction, or one where injuries seem unlikely, such as office work. Injuries can happen on any type of job. Office workers can experience back injuries, carpal tunnel syndrome, or even become injured in a fall on company property. If you are not carrying workers’ compensation insurance, don’t take a chance on finding yourself afoul of the New York WCB. Get insurance right away. If you think you may be exempt from workers’ compensation insurance, verify your exemption with an employment lawyer.
How WCB complaints happen
The worst case scenario for an employer is to have an employee get severely injured on the job when no workers compensation policy is in force. The WCB will be notified of this injury and pursue enforcement action. When this occurs, the employer is responsible for all of the medical and other related expenses for the injured employee. Serious on-the-job injuries quickly add into the hundreds of thousands of dollars.
On top of those expenses, the WCB Board will assess severe fines and penalties. At the minimum, the WCB Board will fine the business $2,000 per ten days that insurance was not in effect. The Board may also add additional penalties and interest, as well as pursue criminal charges.
The WCB also maintains a database of all New York State employers. This database is cross referenced with information supplied by workers’ compensation insurance carriers. The WCB requires all workers’ compensation insurance carriers to report when polices are opened, modified, or terminated. Self-insured plans are also required to report to the WCB. When a company in the database appears to be out of compliance, a notice is automatically sent to the company.
Never ignore these notices. The law requires the company to respond within 10 days. Failure to do results in a finding of noncompliance. The WCB Board will then assess a fine.
To avoid a fine, the business must respond to the notice within the ten-day time limit. The response must prove that the company has workers’ compensation coverage, is self-insured, or is exempt from coverage requirements.
Appealing a workers’ compensation judgment
If you have received a judgment, contact a law firm that handles appeals for WCB fines. The appeals process has strict requirements. An appeal must be filed within 30 days of the notice. Failure to do so means the judgment becomes final.
Once judgments become final, the WCB will send the account to a collections agency. It will also continue to assess additional fines and interest. If fines still remain unpaid, the WCB will get a court judgment against the business and its owners. At that point, the businesses assets may be seized and a stop work order could be imposed. The business may be forced to close.
Also, the business owners and board members may have their personal assets seized. Collection actions may include liens against real estate and levies against bank accounts. Even after monies are collected, fines may continue to be assessed and interest may continue to accrue.
Though these consequences are dire, they can be avoided by appealing the judgment. Upon appeal, fines may be rescinded, reduced, or upheld. Failure to appeal leads to the worst possible scenario, which can result in business closure and seizure of personal assets. When the judgement is appealed by a reputable law firm, these dire consequences are avoided.
In some cases, the fine may be rescinded when the employer can adequately explain the lapse in coverage. Cases of unintentional noncompliance may also be rescinded. Also, mitigating circumstances and proof of current compliance can stop collections activity and may provide a reduction in the fine, penalties, or interest.
The New York WCB does not want to put people out of business. When you receive a notice of noncompliance, it is possible to get the fine rescinded or reduced. If you have received a WCB notice of noncompliance, contact a law firm experienced in appealing WCB judgments. We can stop collection activity and protect your business.
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