Significant Workers Comp. Change In NY

WC Policy Change Affects Insured Employers in NY

Under a new law that took effect on Sunday, September 9, insured employers who have employees in New York must provide "full" workers compensation coverage in the state, according to the state's Workers Compensation Board.Before this law was enacted, a multi-state employer could cover employees in New York under an "all states" endorsement to its workers comp policy unless the employer exceeded certain benchmarks, such as the amount of money its workers earned while in the state, stated Steve Carbone, head of education for the board's Bureau of Compliance.

With this new law, all insured employers must specifically state that they have coverage for New York workers under item 3A of a policy's information page, Mr. Carbone said. The new mandate stems from a workers comp reform law signed into law on March 13, 2007.

Mr. Carbone was unable to elaborate as to why legislators made the policy language mandatory. But he noted there have been instances of out-of-state contractors failing to adequately insure when hiring New York-based subcontractors with New York employees.Employers that are self-insured in other states, but not New York, must also comply, Mr. Carbone said. Penalties for failing to comply can add up, according Mr. Carbone.The statutory penalty for failing to comply is $1,000 for each 10 days that an employer does not have coverage. In addition, a noncompliant employer with five or fewer employees can be found guilty of a misdemeanor and fined an additional $5,000.An employer who has six or more employees can be found guilty of a felony and fined an additional $50,000. Employers without adequate workers compensation coverage can also be sued by an employee in civil court.