An employer's failure to provide disability and Paid Family Leave benefits coverage as required by law will subject the employer to penalties and the cost of any claims associated with the noncompliance. The Board has the authority under the Disability and Paid Family Leave Benefits Law to determine when coverage is required. Sole proprietors, partners of a partnership, and the president, secretary and treasurer of a corporation may be held personally liable for an employer's failure to secure disability benefits insurance.
Liabilities and penalties for not having the required disability and Paid Family Leave benefits coverage include, but are not limited to the following:
Section 220 (2) of the Disability and Paid Family Leave Benefits Law
The Board shall impose upon an employer a penalty not in excess of 1/2 of one percent of the employer's payroll during the period of noncompliance PLUS an additional sum not in excess of $500 for each period of noncompliance.
Section 220 (1) of the Disability and Paid Family Leave Benefits Law
Failure to secure required disability and Paid Family Leave benefits insurance is a misdemeanor, punishable by a fine that may range from $100 to $500, or imprisonment for up to one year, or both a fine and imprisonment.. Additional violations can result in even larger fines: a second violation of the Law within five years may result in a fine that may range from $250 to $1,250, and a third or subsequent violation of the Law within five years may result in a fine of up to $2,500.
Liability for Claims Against an Uninsured Employer
Section 213 (1) of the Disability and Paid Family Leave Benefits Law
In addition to the penalties assessed under Section 220, subdivision 2, the employer is liable for either the total value of any disability or Paid Family Leave benefits claims paid by the Special Fund for disability benefits during the period of noncompliance OR one percent of the employer's payroll during the period of noncompliance, whichever is greater.
If you have any additional questions regarding disability and Paid Family Leave benefits coverage requirements, please call the Bureau of Compliance at (866) 298-7830.
The Office of the Advocate for Business can assist employers with penalties and what you need to do to get in compliance. Visit the Advocate for Business page for additional information, or contact the office directly by calling (518) 486-3311, or emailing firstname.lastname@example.org.