What's happening
This bill requires regular workers' compensation audits for employers, with stricter annual onsite audits for construction companies and penalties for noncompliance or fraud.
Why it matters
Tightens oversight and accountability for employers, especially in the construction industry, by mandating regular, in-person audits and immediate post-policy reviews. this directly addresses sectors where workers’ compensation fraud and misclassification have historically been problems.
Imposes steep financial penalties (three times the estimated annual premium) on employers who fail to provide full access to records or permit physical inspections during audits. creating a strong deterrent against noncompliance and making it riskier for companies to avoid scrutiny.
Explicitly categorizes intentional misrepresentation of payroll, employee duties, or other key data as fraud under both workers’ compensation and criminal law. this could lead to both civil and criminal penalties, signaling tougher enforcement and potential legal consequences for employers who attempt to evade proper compensation costs.
Exempts self-insured employers and group self-insured trusts, focusing enforcement on those purchasing traditional insurance. this potentially incentivizes more rigorous internal controls for those still subject to audits, while recognizing the distinct regulatory framework for self-insured entities.
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Who cares
Headline styles
Reward Accurate Comp Audits
Plain English, a few words. Used as the page title.
Sponsors
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History
- Referred to labor
- Referred to labor
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
86
2017-2018 Regular Sessions
IN ASSEMBLY (Prefiled)
January 4, 2017
Introduced by M. of A. CAHILL -- read once and referred to the Committee on Labor
AN ACT to amend the workers' compensation law, in relation to providing incentives for productive workers' compensation audits
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The workers' compensation law is amended by adding a new section 112-a to read as follows:
§ 112-a. Audits of employers. 1. (a) Employers in all classes other than the construction class shall be audited not less frequently than biennially and the chair or board may provide for more frequent audits of employers in specified classifications based on factors such as amount of premium, type of business, loss ratios, or other relevant factors. In no event shall employers in the construction class, generating more than the amount of premium required to be experience rated, be audited less frequently than annually. The annual audits required for construction classes shall be a physical, onsite review of original payroll records, employee records, checkbooks, cash book (disbursements and receipts), general ledger, contracts, tax returns including quarterly payroll filings, and original certificates of insurance. The audit shall be conducted no more than ninety days after the expiration of a policy period. At the completion of an audit, if requested by the auditor, the employer or officer of the corporation and the auditor must print and sign their names on the audit document affirming the accuracy of the information provided therein. As required by section one hundred twelve of this article, employers shall make available all books and records necessary for the payroll verification audit and permit the auditor to make a physical inspection of the employer's operation. If an employer fails to provide reasonable access to all such books and records necessary for a payroll verification audit, including a physical
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01603-01-7
A. 86 2
inspection of the employer's operation, the employer shall pay an additional premium to the carrier of three times the most recent estimated annual premium.
(b) If an employer knowingly understates or knowingly conceals payroll, knowingly misrepresents or knowingly conceals employee duties so as to avoid proper classification for premium calculations, or knowingly misrepresents or knowingly conceals information pertinent to the computation and application of an experience rating modification factor, said knowing misrepresentations or knowing concealments shall be considered fraudulent practices in violation of applicable provisions of section one hundred fourteen of this article and insurance fraud in violation of applicable provisions of section 176.05 of the penal law.
(c) If during the course of an audit conducted under this section, an insurance carrier obtains information indicating a violation of the provisions of paragraph (b) of this subdivision, then the carrier shall report such information to the board.
2. This section shall not apply to employers that self-insure or employers that are members of a workers' compensation group self-insured trust.
3. For the purposes of this section, "construction class" means the work or occupation described in "Group 3" of subdivision one of section three of this chapter.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
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