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Uninsured Employer Defense

Defense of Uninsured Employers in Workers’ Compensation Claims

Most employers in the state of New York are required to obtain and keep worker’s compensation coverage. You may think that your business is in a safe occupation or industry where a workplace accident or injury is unlikely, but penalties for noncompliance can be incurred even without a workers’ compensation claim ever being filed. The Workers’ Compensation Board (WCB) routinely monitors the coverage status of all employers in the state, and if they find out you are uninsured, you could face both civil and criminal penalties and find your business operations seriously hampered. Attorney Peter Cordovano represents uninsured employers and defends them in WCB proceedings and hearings in New York State courts.

New York workers’ compensation offenses and defenses

New York State Workers’ Compensation Law provides many different offenses that could subject an employer to civil or criminal penalties, or both. These offenses include:

  • Failure to Secure Coverage
  • Subsequent Failure to Secure Coverage
  • Intentional Misrepresentation (paying workers “off the books,” not reporting wages paid to undocumented workers, misclassifying employees as independent contractors, etc.)
  • Failure to Maintain Accurate Payroll Records

There are specific elements which must be proven in order to convict someone of any one of the above offenses or subject an employer to civil penalties. As a Workers’ Compensation attorney with years of additional experience in personal injury civil litigation and criminal defense, Peter Cordovano has the skills and abilities necessary to provide strong, effective defense before administrative law judges, board panels, and the courts.

Civil penalties for noncompliance

The WCB can levy administrative penalties against an employer for failing to maintain required coverage. These penalties amount to $2,000 per every 10-day period of noncompliance on top of any workers’ compensation award due to an injured employee. The employer is liable to the injured worker for both compensation and medical costs, which can run into the hundreds of thousands of dollars for a serious injury. The Board may assess additional penalties as well.

To make matters worse for a business owner, depending upon the structure of the business (partnership, sole proprietorship), owners and officers of the business could be held personally liable for these payments.

If you believe you have grounds to challenge an injured worker’s claim, you can still challenge it, but as an uninsured employer you would have to pay for your own legal representation to defend against the claim, whereas if you had coverage, then such legal defense would likely be covered under your policy.

Criminal penalties for noncompliance

It is possible for the authorities to go after an uninsured employer for criminal sanctions as well. An uninsured employer with five or less employees can be found guilty of a misdemeanor and subjected to fines between $1,000 and $5,000. An uninsured employer with more than five employees may be found guilty of a Class E felony and subjected to fines between $5,000 and $50,000. An employer who is found guilty of violating the law and has a previous conviction within the past five years can be convicted of a Class D felony, which carries a minimum fine of $10,000.

Stop work orders

Yet another penalty which may befall an uninsured employer is the issuance of a Stop Work Order, which requires the immediate cessation of all business activities. The WCB has the power to issue a Stop Work Order if you do not have workers’ compensation coverage in place or if you owe any outstanding debt to the Board. As an employer, you could find yourself debarred from participating in any public works contract or subcontract for one year, or five years if you receive a felony conviction for one of the offenses described above.

Help is available to Uninsured Employers

Whether you are being subjected to civil or criminal penalties, you have the right to defend yourself in court or before the Board, and to have an attorney advise you and represent you. If you are charged with civil penalties, you can seek a redetermination review, but you must act quickly or you can lose your right to review. It is often possible to explain the lapse and ask for a reduction in the penalty. In criminal court, you would have the full range of options for your defense available, as well as the right to appeal any conviction to a higher court.

We can help you defend against the charges before the WCB or in court. Attorney Peter Cordovano has years of practice before the WCB and is also an experienced civil litigator and criminal defense lawyer. The burden is on the state to prove the case against you, and you may have many options and strategies available in your defense. If you are charged with failing to maintain workers’ compensation insurance in Orange, Dutchess or Ulster county, call on Peter M. Cordovano, P.C. in Highland, Poughkeepsie, Arlington, and Kingston for strong, effective defense.

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