S. 8387 2
section twenty-six of this [chapter] ARTICLE and to make payment of
compensation into the fund created under this section according to the
terms of any award including, without limitation, awards made pursuant
to subdivision five of section thirteen-g, subdivision two of section
thirteen-f, subdivision five of section thirteen-k, subdivision five of
section thirteen-l and subdivision six of section thirteen-m of this
article, payment of the award shall be promptly made from the fund
created under this section in accordance with the terms thereof and the
provisions of subdivision three of this section. The employer shall be
liable with the fund for payment of the award. Where the employer is a
corporation, LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNERSHIP OR
PARTNERSHIP, the president, secretary [and], treasurer, MEMBER AND PART-
NER thereof shall also be personally, jointly and severally liable with
the corporation, LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNER-
SHIP OR PARTNERSHIP for payment of the award. The employer shall pay the
award into the fund, in accordance with the time limitations contained
in section twenty-five of this article.
(b) No such award, however, for any service specified in subdivision
five of section thirteen-a of this article requiring advance authori-
zation of the employer in accordance with the provisions of such subdi-
vision, shall be payable from the fund unless advance authorization
therefor was secured from the representative of the fund or is deter-
mined by the board to be necessary. Notwithstanding any other provision
under this section, awards made pursuant to section fourteen-a of this
article shall not be the liability of the fund and shall not be payable
therefrom nor shall payment of the present value of benefits be required
to be paid into the aggregate trust fund pursuant to section twenty-sev-
en of this article in any case in which the uninsured employers' fund is
liable.
2. Uninsured employers' fund. (a) There is hereby created a fund
which shall be known as the "uninsured employers' fund" to provide for
the payment of awards against uninsured employers in accordance with the
provisions of this section and shall be available only for the purposes
stated in this subdivision, and the assets thereof shall not at any time
be appropriated or directed to any other use or purpose, except as set
forth in section fifty-a of this chapter.
(b) For the purpose of establishing and maintaining this fund, the
board, upon rendering a decision with respect to any claim for compen-
sation under this chapter that the employer liable therefor has failed
to secure the payment of compensation with respect thereto in accordance
with section fifty of this chapter, shall impose an assessment in the
sum of one thousand dollars for each ten day period of non-compliance or
a sum not in excess of two times the amount of the cost of compensation
for its payroll for the period of such failure against the employer and
direct its payment into the fund in connection with each such claim
wherein injury shall have occurred on or after the first of May, nine-
teen hundred fifty-nine, or in death cases where death as the result of
injury shall have occurred on or after said date.
(c) If the employer shall fail to pay these assessments into the fund
within ten days after date of mailing of notice thereof to [him or her]
THE EMPLOYER, such default shall constitute a default in payment of
compensation due pursuant to the provisions of section twenty-six of
this article and judgment therefor shall be entered in accordance there-
with, all other provisions of said section to be deemed applicable with
respect thereto, except to the extent that said provisions may be clear-
ly inconsistent with the provisions of this section. All sums collected
S. 8387 3
from an uninsured employer with respect to any claim for compensation
referred to in this section but not payable from the fund, except fines
collected from such employer pursuant to section fifty-two of this chap-
ter whether such collection is made prior or subsequent to entry of
judgment against such employer, shall be deemed in payment of an appli-
cable first in satisfaction of any compensation and benefits due from
such employer with respect to such claim and security demand, if any, in
connection therewith and only when such obligations are satisfied in
full shall the balance of said sums collected, if any, be deemed payment
in satisfaction of and applicable to the assessments above prescribed in
this section.
(d) All sums recovered from uninsured employers on judgments entered
for failure to pay assessments as hereinbefore provided and for failure
to pay compensation and benefits which were paid from the fund herein
created, shall upon such recovery be paid into said fund.
(e) All awards made on or after July first, nineteen hundred sixty-
nine for every case of injury causing death for which there are no
persons entitled to compensation, and where there are persons entitled
to compensation but the total amount of such compensation is less than
two or five thousand dollars as the case may be exclusive of funeral
benefits, pursuant to the provisions of subdivision three of section
twenty-five-a of this article shall be paid into the uninsured employ-
ers' fund.
(f) As promptly as practicable after July first, nineteen hundred
ninety-one and annually thereafter as soon as practicable after January
first in each succeeding year, the chair shall ascertain the condition
of the uninsured employers' fund. The chair shall transfer to the fund
out of the moneys collected pursuant to subdivision two of section one
hundred fifty-one of this chapter an amount which will raise the net
cash assets of the fund to the level of either the amount spent by the
fund in the prior year, or the amount estimated to be expended by the
fund in the succeeding year, whichever is greater, except that such
requirement shall not apply between August first, two thousand eight and
August first, two thousand fifteen to the extent that section fifty-a of
this chapter permits the fund to be at a different level.
3. The commissioner of taxation and finance shall be the custodian of
the uninsured employers' fund and shall invest any surplus moneys there-
of in securities which constitute legal investments for savings banks
under the laws of this state and in interest bearing certificates of
deposit of a bank or trust company located and authorized to do business
in this state or of a national bank located in this state secured by a
pledge of direct obligations of the United States or of the state of New
York, or in accordance with the provisions of section ninety-eight-a of
the state finance law, in an amount equal to the amount of such certif-
icates of deposit, and may sell any of the securities or certificates of
deposit in which such fund is invested, if necessary for the proper
administration or in the best interest of such fund. Disbursements from
such fund as provided by this section shall be paid by the commissioner
of taxation and finance upon vouchers signed by the [chairman] CHAIR.
The commissioner of taxation and finance, as custodian of such fund,
as soon as practicable after August first, nineteen hundred sixty-two
and annually thereafter, shall furnish to the [chairman] CHAIR of the
board a statement of the fund, setting forth the balance of moneys in
the said fund as of the time of the preceding statement, the income of
the fund, a summary of payments out of the fund on account of compen-
sation ordered to be paid therefrom by the board, medical and other
S. 8387 4
expenses, and all other charges against the fund in the interim and
setting forth the balance of the fund remaining to its credit as of the
end of the period being reported. Such statement shall be open to public
inspection in the office of the [chairman] CHAIR, and a copy thereof
shall be transmitted by the [chairman] CHAIR to the superintendent of
financial services. The superintendent of financial services may examine
into the condition of such fund at any time on [his] THEIR own initi-
ative or on request of the [chairman] CHAIR. [He] THE SUPERINTENDENT OF
FINANCIAL SERVICES shall verify the receipts and disbursements of the
fund, and shall ascertain the liability of the fund upon all cases in
which awards of compensation have been made and charged against said
fund and shall render a report of such facts to the [chairman] CHAIR.
Such report shall also be open to public inspection in the office of the
[chairman] CHAIR.
4. Upon notice to the representative of the fund, the board, if in its
discretion it deems the interests of the fund will be best served there-
by, may compromise the amount for which judgment has been entered
against an employer pursuant to this section and the judgment entered
may be modified accordingly. Such compromise shall be effective without
the necessity of obtaining the approval of any other state official
thereto, but shall not reduce the amount of benefits payable to or on
behalf of any claimant under this section.
5. The [chairman] CHAIR of the [workmen's] WORKERS' compensation board
shall appoint an employee of the board who is an attorney at law duly
admitted to practice in the state of New York to serve as the represen-
tative of the fund created under this section and shall assign to assist
[him] SUCH ATTORNEY in the discharge of [his] THEIR duties as such
representative under the provisions of this section, such other employ-
ees of the board as the [chairman] CHAIR deems necessary for this
purpose. Such representative may apply to the [chairman] CHAIR for
authority to hire such medical and other experts and to defray the
expense thereof and of such witnesses as are necessary to a proper
defense of the claim within an amount in the discretion of the [chair-
man] CHAIR and, if authorized, such amount shall be a charge against
said fund. The representative of the fund may appear for and represent
the interest of the fund in any case in court involving the rights of
the fund against another not in the same employ as the employee who
received benefits under this chapter and whose injury or death was
caused by the negligence or wrong of such other.
6. Whenever it appears, in a claim for benefits under this chapter,
that the employer may have failed to secure the payment of compensation
in accordance with section fifty of this chapter, the fund shall be
given notice of all proceedings in the claim. In such event, the
provisions of this chapter with respect to procedure, the right to be
heard and the right to apply to the board for review of a referee's
decision and to appeal to the courts shall be reserved to the claimant,
to the uninsured employer, and to the fund. Upon the application of the
representative of the fund for a modification or rescission or review of
an award, the board may review any award, decision or order and, on such
review, may affirm, reverse, or modify any decision or award as the law
and the facts may require, or take such other action as may be in the
interest of justice. An appeal to the appellate division of the supreme
court, third department, or to the court of appeals shall not operate as
a stay of the payments by the uninsured employer or by the fund of the
compensation required by the terms of the award or of the payment of the
doctor's bills found to be fair and reasonable. Where such award is
S. 8387 5
reduced or rescinded upon appeal, the uninsured employer or the fund,
whichever made payment, shall be entitled to reimbursement in a sum
equal to the compensation in dispute paid by such party to the respond-
ent pending adjudication of the appeal, and, if the claim for workers'
compensation is disallowed, to a sum equal to the amount of the doctor's
bills paid by such party pending adjudication of the appeal. Such
reimbursement shall be paid from administration expenses as provided in
section one hundred fifty-one of this chapter upon vouchers approved by
the chair. To the extent of any reimbursement to the fund, the uninsured
employer shall be entitled to reimbursement from the fund for payments
made into the fund in accordance with subdivision one of this section.
6-a. In the event that the board is unable to determine the identity
of the responsible insurance carrier for the employer within thirty days
of the filing of a new claim, the board shall:
(a) appoint the uninsured employers' fund as the responsible party
until such time as the identity of the responsible insurance carrier for
the employer is determined. Upon such appointment, the uninsured employ-
ers' fund shall immediately commence payments and provide medical care
in accordance with the provisions of this chapter;
(b) schedule a hearing to determine the identity of the responsible
insurance carrier for the employer and to determine such claim for
compensation in accordance with the provisions of subdivision one of
this section; and
(c) provide notice of such claim and hearing to the employer by certi-
fied mail, return receipt requested, with a direction that the employer
provide proof of having insurance in effect as provided by section ten
of this article.
7. All the rights, powers, and benefits of the employer under section
twenty-nine of this [chapter] ARTICLE shall become the rights, powers
and benefits of the fund in any case in which the fund has paid or is
paying compensation to an injured employee or [his] THEIR dependents
under this section. If the employer has also paid compensation to or on
behalf of the injured employee or [his] THEIR dependents in such case
any recovery by the fund pursuant to subdivision one of section twenty-
nine shall first be applied to repayment of any awards paid by the fund
to or on behalf of the injured employee or [his] THEIR dependents in
such case, the balance then applied to any outstanding unsatisfied
demand for security in said case and assessments imposed against the
employer pursuant to the provisions of this section, the remainder, if
any, to be returned to the employer. If the employer has also paid
compensation to or on behalf of the injured employee or [his] THEIR
dependents in such case, that portion, if any, of a recovery by the fund
pursuant to subdivision two of section twenty-nine which is in excess of
the total amount of compensation awarded to or on behalf of such injured
employee or [his] THEIR dependents and the reasonable and necessary
expenditures incurred in effecting such recovery shall be apportioned
between the injured employee or [his] THEIR dependents and the fund in
the manner provided in said subdivision two. The balance of said recov-
ery shall first be applied to reimburse the fund for its reasonable and
necessary expenditures in effecting such recovery and the remainder
shall be applied to repayment of any award paid by the fund to or on
behalf of the injured employee or [his] THEIR dependents in such case.
If there still remains a balance it shall first be applied to the
outstanding unsatisfied demand for security, if any, in said case and
assessments, if any, imposed against the employer pursuant to the
S. 8387 6
provisions of this section; the remainder, if any, to be returned to the
employer.
7-a. Notwithstanding any other provision of section twenty-nine of
this article to the contrary, a compromise by the claimant of [his or
her] THEIR cause of action as set forth in said section twenty-nine of
this article, in an amount less than the sum paid to or on behalf of the
claimant from the uninsured employers' fund, shall be made only with the
written consent of the chair.
8. The provisions of this section with respect to the liability of the
uninsured employers' fund to pay awards against uninsured defaulting
employers shall apply only to claims wherein the injury shall occur on
or after the first day of October, nineteen hundred sixty-two, or where-
in death shall occur as the result of an injury sustained on or after
the aforesaid first day of October.
9. The [chairman] CHAIR may make reasonable regulations for the proc-
essing and payment of compensation out of the uninsured employers' fund.
10. The liability of the [chairman] CHAIR, the commissioner of taxa-
tion and finance, the fund and the state of New York with respect to
payment of any compensation, benefits, expenses, fees or disbursements
properly chargeable against the uninsured employers' fund shall be
limited to the assets in said fund and they shall not otherwise in any
way or manner be liable for the making of any such payment.
11. All assessments payable pursuant to the provisions of this section
shall be liens against the assets of the employer liable therefor with-
out limit of amount, subordinate, however, to claims for unpaid wages
and prior recorded liens.
12. Whenever the term employer is used in this section it shall be
deemed to include without limitation a contractor liable for the payment
of compensation pursuant to section fifty-six of [the workmen's compen-
sation law] THIS CHAPTER.
13. Notwithstanding any other provision of this chapter, in any case
of injury or death to the president, secretary, treasurer or any other
officer charged with the obligation of obtaining workers' compensation
insurance, of a corporation, any awards of compensation or medical
expenses payable to or on behalf of such officer or to [his] THEIR
surviving spouse, children and dependents as defined by section sixteen
of this article made against the corporation as an uninsured employer
solely because of the injury or death of such officer, shall in no event
be the liability of the uninsured employers' fund and shall not be paya-
ble therefrom.
14. Notwithstanding any other provision of this chapter, in any case
of injury or death to a self-employed person or to a partner of a part-
nership as defined in section ten of the partnership law, any awards of
compensation or medical expenses payable to or on behalf of such self-
employed person or partner of a partnership or to [his] THEIR surviving
spouse, children and dependents as defined by section sixteen of this
article made against the self-employed person or partnership as an unin-
sured employer solely because of the injury or death of such self-em-
ployed person or partner, shall in no event be the liability of the
uninsured employers' fund and shall not be payable therefrom.
15. NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER, IN ANY CASE
OF INJURY OR DEATH TO A SELF-EMPLOYED PERSON OR TO A MEMBER OF A LIMITED
LIABILITY COMPANY AS DEFINED IN SECTION ONE HUNDRED TWO OF THE LIMITED
LIABILITY COMPANY LAW, ANY AWARDS OF COMPENSATION OR MEDICAL EXPENSES
PAYABLE TO OR ON BEHALF OF SUCH SELF-EMPLOYED PERSON OR MEMBER OF A
LIMITED LIABILITY COMPANY OR TO THEIR SURVIVING SPOUSE, CHILDREN AND
S. 8387 7
DEPENDENTS AS DEFINED BY SECTION SIXTEEN OF THIS ARTICLE MADE AGAINST
THE SELF-EMPLOYED PERSON OR LIMITED LIABILITY COMPANY AS AN UNINSURED
EMPLOYER SOLELY BECAUSE OF THE INJURY OR DEATH OF SUCH SELF-EMPLOYED
PERSON OR MEMBER, SHALL IN NO EVENT BE THE LIABILITY OF THE UNINSURED
EMPLOYERS' FUND AND SHALL NOT BE PAYABLE THEREFROM.
§ 2. Section 52 of the workers' compensation law, as amended by chap-
ter 6 of the laws of 2007, subdivision 5 as amended by section 19 of
part GG of chapter 57 of the laws of 2013, is amended to read as
follows:
§ 52. Effect of failure to secure compensation. 1. (a) Failure to
secure the payment of compensation for five or less employees within a
twelve month period shall constitute a misdemeanor, and is punishable by
a fine of not less than one thousand nor more than five thousand
dollars. Failure to secure the payment of compensation for more than
five employees within a twelve month period shall constitute a class E
felony, and is punishable by a fine of not less than five thousand
dollars nor more than fifty thousand dollars in addition to any other
penalties otherwise provided by law. It shall be an affirmative defense
to any criminal prosecution under this section that the employer took
reasonable steps to secure compensation.
(b) Where any person has previously been convicted of a failure to
secure the payment of compensation within the preceding five years, upon
conviction for a subsequent violation such person shall be guilty of a
class D felony, and fined not less than ten thousand nor more than fifty
thousand dollars in addition to any other penalties including fines
otherwise provided by law.
(c) Where the employer is a corporation, LIMITED LIABILITY COMPANY,
LIMITED LIABILITY PARTNERSHIP OR PARTNERSHIP, the president, secretary
[and], treasurer, MEMBERS AND PARTNERS thereof shall be liable for fail-
ure to secure the payment of compensation under this section. It shall
be an affirmative defense to any action against any officer of a corpo-
ration, MEMBER OF A LIMITED LIABILITY COMPANY OR PARTNERS OF A LIMITED
LIABILITY PARTNERSHIP OR PARTNERSHIP under this section that the
officer, MEMBER OR PARTNER took reasonable steps to ensure that the
corporation, LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNERSHIP OR
PARTNERSHIP secured compensation, that proper internal procedures were
in effect to do so, and that proper internal controls existed to monitor
compliance with said procedures.
(d) If at any time an employer intentionally and materially under-
states or conceals payroll, or intentionally and materially misrepre-
sents or conceals employee duties so as to avoid proper classification
for calculation of premium paid to secure compensation, or intentionally
and materially misrepresents or conceals information pertinent to the
calculation of premium paid to secure compensation, such employer shall
be deemed to have failed to secure compensation and shall be subject to
the sanctions applicable to this section.
(e) A stop-work order issued because an employer is deemed to have
failed to secure compensation under section one hundred forty-one-a of
this chapter shall have no effect upon an employer's or carrier's duty
to provide benefits under this chapter or upon any of the employer's or
carrier's rights and defenses.
2. All fines imposed under this chapter, except as herein otherwise
provided, shall be paid directly and immediately by the officer, MEMBER
OR PARTNER collecting the same to the [chairman] CHAIR, and shall be
paid by [him] THEM into the uninsured employers' fund created under
section twenty-six-a of this chapter, provided, however, that all such
S. 8387 8
fines collected by justices of towns and villages shall be paid to the
state comptroller in accordance with the provisions of section twenty-
seven of the town law and section 4-410 of the village law respectively.
3. In any prosecution hereunder the failure of the employer to file
with the [chairman] CHAIR, within ten days after demand, a statement
subscribed by the employer and affirmed by [him] THEM as true under the
penalties of perjury showing specifically (a) the name of the stock
company, mutual corporation or reciprocal insurer in which such employer
is insured and the number and the date of issuance and term of such
policy of insurance, or (b) that the said employer is insured with the
state fund in which case [he] THEY shall give the number of such policy
of insurance, the date of issuance and term thereof, or (c) that the
said employer has been authorized to do business as a self-insurer
pursuant to section fifty of this article, giving the date of said
authorization, or (d) a legal reason, if any, why said employer is not
required to secure compensation, shall constitute prima facie evidence
that the employer has failed to secure compensation as herein required.
The statement to be filed herein shall be subscribed by the employer or
if the employer is a corporation, LIMITED LIABILITY COMPANY, LIMITED
LIABILITY PARTNERSHIP OR PARTNERSHIP by one of the officers, MEMBERS OR
PARTNERS herein named in which [he] THEY shall state that [he has] THEY
HAVE read such statement subscribed by [him] THEM and knows the contents
thereof and that same is true of [his] THEIR own knowledge.
4. If, however, there has been an accident and the board shall have
made an award against the employer as a non-insured employer, the making
of such award, except in a case where the employer had secured compen-
sation insurance which was in effect at the time of the accident but the
carrier later became insolvent, shall constitute prima facie evidence of
an employment by the employer of an employee in an occupation in which
the said employer was required to carry compensation and of the failure
of the employer to secure the payment of workers' compensation on the
date of the accident involved in said award. A certified copy of such
award shall be received as competent evidence of the making thereof in
any criminal prosecution hereunder.
5. The chair, upon finding that an employer has failed for a period of
not less than ten consecutive days to make the provision for payment of
compensation required by section fifty of this article, may impose upon
such employer, in addition to all other penalties, fines or assessments
provided for in this chapter, a penalty of up to two thousand dollars
for each ten day period of non-compliance or a sum not in excess of two
times the cost of compensation for its payroll for the period of such
failure, which sum shall be paid into the uninsured employers' fund
created under section twenty-six-a of this chapter. When an employer
fails to provide business records sufficient to enable the chair to
determine the employer's payroll for the period requested for the calcu-
lation of the penalty provided in this section, the imputed weekly
payroll for each employee, corporate officer, sole proprietor, or part-
ner shall be the New York state average weekly wage, multiplied by 1.5.
Where the employer is a corporation, LIMITED LIABILITY COMPANY, LIMITED
LIABILITY PARTNERSHIP OR PARTNERSHIP, the president, secretary [and],
treasurer, MEMBER AND PARTNER thereof shall be liable for the penalty.
If the employer shall within thirty days after notice of the imposition
of a penalty by the chair pursuant to this subdivision make an applica-
tion in affidavit form for a redetermination review of such penalty the
chair shall make a decision in writing on the issues raised on such
application.
S. 8387 9
§ 3. Subdivision 3 of section 131 of the workers' compensation law, as
amended by chapter 6 of the laws of 2007, is amended to read as follows:
(3) The chair, upon finding that an employer has failed to keep true
and accurate records as required by this section, may impose upon such
employer, in addition to all other penalties, fines or assessments
provided for in this chapter, one thousand dollars for each ten day
period of non-compliance or a sum not in excess of two times the cost of
compensation for its payroll for the period of such violation, which sum
shall be paid into the uninsured employers' fund created under section
twenty-six-a of this chapter. When an employer fails to provide business
records sufficient to enable the chair to determine the employer's
payroll for the period requested for the calculation of the penalty
provided in this section, the imputed weekly payroll for each employee,
corporate officer, sole proprietor, MEMBER, or partner shall be the New
York state average weekly wage, multiplied by 1.5. Where the employer is
a corporation, LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNERSHIP
OR PARTNERSHIP, the corporation, LIMITED LIABILITY COMPANY, LIMITED
LIABILITY PARTNERSHIP OR PARTNERSHIP and any of the following shall be
liable for the penalty provided in this subdivision: the president,
secretary [and], treasurer, MEMBERS AND PARTNERS, RESPECTIVELY. If the
employer shall within thirty days after notice of the imposition of a
penalty by the chair pursuant to this subdivision make an application in
affidavit form for a redetermination review of such penalty, the chair
shall make a decision in writing on the issues raised on such applica-
tion.
§ 4. Subdivision 1 of section 220 of the workers' compensation law, as
amended by section 18 of part SS of chapter 54 of the laws of 2016, is
amended to read as follows:
1. Any employer who fails to make provision for payment of disability
or family leave benefits as required by section two hundred eleven of
this article within ten days following the date on which such employer
becomes a covered employer as defined in section two hundred two of this
article shall be guilty of a misdemeanor and upon conviction be punisha-
ble by a fine of not less than one hundred nor more than five hundred
dollars or imprisonment for not more than one year or both, except that
where any person has previously been convicted of a failure to make
provisions for payment of disability or family leave benefits within the
preceding five years, upon conviction for a second violation such person
shall be fined not less than two hundred fifty nor more than one thou-
sand two hundred fifty dollars in addition to any other penalties
including fines otherwise provided by law, and upon conviction for a
third or subsequent violation such person may be fined up to two thou-
sand five hundred dollars in addition to any other penalties including
fines otherwise provided by law. Where the employer is a corporation,
LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNERSHIP OR PARTNERSHIP,
the president, secretary, treasurer, MEMBER, PARTNER, or officers exer-
cising corresponding functions, shall each be liable under this section.
§ 5. This act shall take effect immediately.
