Regardless of how many days have passed since you received a penalty notice from the New York State Workers Compensation Board, our goal is to respond quickly, even if it’s simply to acknowledge the notice and inform the Board we are gathering the required documents. If we do not show a good faith effort to resolve the issues:
- The Board can refer the matter to a collection agency.
- A judgment can be entered against you.
- Your bank accounts can be frozen.
- You can be directed to stop working, until you provide proof of coverage.
- In some of the worst cases, warrants can be issued for the arrest of a business’ owners or officers.
Here are some of the other things you need to know about the process.
Applications for Review of Penalties can be addressed anywhere between two weeks and two to six months.
The Board does not have any clear timelines for resolving these matters. Where there are more complicated or non-traditional business structures, many workers, or multiple periods without insurance, the Board will typically take longer to address your penalties. That’s why we gather as much information as possible from the outset. The easier we can make it for the Board to find you either had or weren’t required to have insurance during the periods at issue, the more likely we are to resolve your penalties quickly.
The Board might respond, even after a long time, with a request for additional information.
If the Board’s examiner can’t easily tell that a worker does not need to be covered by worker’ compensation, disability, and Paid Family Leave insurance, you will be asked for additional information and evidence. This can be annoying and feel invasive, but it is in your best interest to provide the information. If you do not, the Board will presume the worker was an employee requiring coverage, and you might be ineligible for a reduction in the penalties.
You might continue to receive penalty statements while your matter is under review.
An Application for Review of Penalties does not automatically stay, or stop, the penalties and interest from accumulating. Please forward the penalty statements to me, when you receive them, as I use them as an excuse to remind the Board that your penalties are still under review. This sometimes prompts a decision on the Application.
You might receive inquiries or notices from other State agencies, while your Application is pending.
The Board can share information with other State agencies. If it appears likely that you have misclassified employees as freelancers, independent contractors, permalancers, subcontractors, or other independent business owners, you might receive inquiry notices from the Department of Labor regarding your payroll tax withholdings, which pay for unemployment insurance. The Department of Taxation and Finance might also contact you about other underpaid taxes. I can refer you to an attorney who handles tax controversies, if you do not already work with one.
You might have to get separate counsel to defend an uninsured WC claim.
Sometimes, when disgruntled employees learn that you do not have WC insurance, they will file claims to make the situation worse. At other times, an employee might simply have a legitimate accident during an uninsured period. Either way, your penalty situation will get worse. You will likely owe the penalties for failure to insure—as well as the costs of the injured employee’s medical expenses and lost earnings. To help you weigh the costs of insurance against the benefits, here is an example of a typical WC claim:
Susan is a 45-year-old receptionist with a prior back injury that acts up from time to time, but it never really causes time off from work. There have been some changes to her regular duties, and she is stressed out from trying to keep up with the new job requirements. Her back is tighter every morning when she gets up, and she needs to move around more during the day, but she sometimes gets so busy that she forgets—until she can’t walk to her car as easily at the end of her shift. One day, as she is leaving, she drops her keys on the floor in the lobby. When she bends over to pick them up, she feels a sharp pain and is unable to stand up straight again.
Your staff is well-trained to respond to workplace injuries, and Susan is taken to an immediate care center. She is told to stay out of work for a week and follow up with her primary care physician (“PCP”). She does, and her PCP refers her to a WC doctor, because the PCP is unfamiliar with the WC system and billing. The WC doctor refers her to an attorney who instantly recognizes that Susan makes a lot of money each week. If they can show her back injury is limiting her work abilities permanently, they can earn thousands of dollars an hour in fees. They think, “This is almost too easy!”
It is. Susan’s average weekly wage is $600.00, and her WC rate will be based on this. If she is classified with a 50% lost wage-earning capacity (“LWEC”), she will be entitled to 300 weeks of compensation at the $200.00 LWEC rate, or $60,000.00—on top of all medical and lost time expenses up to the date her permanent impairment is determined. Plus, she’ll still be entitled to lifetime medical expenses for her back injury.
The claim alone will cost more than $60,000.00. The insurance premiums to cover her for a year would have probably been less than $900.00, and you would have been provided an attorney to defend you.
DISCLAIMER: This article is intended only as general information about workers compensation penalty negotiations. It is not legal advice. Additionally, some laws and procedures might have changed since the original post date. If you need specific legal advice about your penalty, please contact an experienced attorney to discuss your unique circumstances.