S T A T E O F N E W Y O R K
________________________________________________________________________
320
2021-2022 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 6, 2021
___________
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 ASSEM-
BLY, 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, GENERAT-
ING MORE THAN THE AMOUNT OF PREMIUM REQUIRED TO BE EXPERIENCE RATED, BE
AUDITED LESS FREQUENTLY THAN ANNUALLY. THE ANNUAL AUDITS REQUIRED FOR
CONSTRUCTION CLASSES MAY BE A PHYSICAL, ONSITE REVIEW OF ORIGINAL
PAYROLL RECORDS, EMPLOYEE RECORDS, CHECKBOOKS, CASH BOOK (DISBURSEMENTS
AND RECEIPTS), GENERAL LEDGER, CONTRACTS, TAX RETURNS INCLUDING QUARTER-
LY PAYROLL FILINGS, AND ORIGINAL CERTIFICATES OF INSURANCE. THE AUDIT OF
ALL EMPLOYERS SHALL BE CONDUCTED NO MORE THAN ONE HUNDRED TWENTY 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
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.
LBD01633-01-1
A. 320 2
INSPECTION OF THE EMPLOYER'S OPERATION, THE EMPLOYER SHALL PAY A
SURCHARGE TO THE CARRIER OF TWO TIMES THE MOST RECENT ESTIMATED ANNUAL
PREMIUM.
(B) EMPLOYERS THAT FAIL TO PROVIDE REASONABLE ACCESS TO THE CARRIER
FOR THE PURPOSE OF CONDUCTING AN AUDIT SHALL BE REPORTED TO THE NEW YORK
COMPENSATION INSURANCE RATING BOARD.
(C) 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 KNOW-
INGLY 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 CONSID-
ERED 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.
(D) IF DURING THE COURSE OF AN AUDIT CONDUCTED UNDER THIS SECTION, AN
INSURANCE CARRIER OBTAINS INFORMATION INDICATING A VIOLATION OF THE
PROVISIONS OF PARAGRAPH (C) 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 on the first of January next succeed-
ing the date on which it shall have become a law.