Workers' Compensation Coverage
Liability And Penalties For Violations Of Mandatory Workers' Compensation Insurance Coverage Requirements
An employer must keep accurate records of the number of employees, classification, wages and accidents for their business for four years (WCL §131). Any attempt by an employer to:
- intentionally and materially understate or conceal payroll,
- conceal employee duties to avoid proper classification, or
- conceal any other information pertinent to the calculation of premium paid to secure compensation.
May result in a fine of $2,000 per every 10-day period of noncompliance or two times the cost of compensation.
Additionally, the fine for criminal conviction is from $1,000 to $50,000. (WCL §52(1)(d)).
Examples of misrepresentation include:
Failure to pay appropriate workers' compensation premiums by:
- Paying workers "off the books,"
- Not reporting wages paid to illegal aliens,
- Misclassifying employees as "independent contractors," and
- Misclassifying the work of a business to a classification that is less hazardous (identifying all roofers as secretarial staff), and/or
- Intentionally, materially misrepresenting or concealing information pertinent to calculation of premium paid.