Site Navigation

WCB Home Page
Change Font Size
Glossary of WCB Terms

Workers' Compensation Coverage


Liability And Penalties For Violations Of Mandatory Workers' Compensation Insurance Coverage Requirements

Penalties for Noncompliance

  1. Failure To Secure Coverage (Criminal) -- Section 52 [1] (a) of the Workers' Compensation Law provides that a failure to secure the payment of compensation for five or less employees within a 12 month period shall constitute a misdemeanor punishable by a fine of not less than $1,000 nor more than $5,000.

    Failure to secure the payment of compensation for more than five employees within a 12 month period shall constitute a class E felony punishable by a fine of not less than $5,000 nor more than $50,000 and is in addition to any other penalties otherwise provided by law.
  2. Subsequent Failure To Secure Coverage (Criminal) Section 52 [1] (b) Where any person has previously been convicted of a failure to secure the payment of compensation within the preceding five years, upon conviction for a subsequent violation such person shall be guilty of a class D felony, fined not less than $10,000 nor more than $50,000 and is in addition to any other penalties including fines otherwise provided by law.

    Cases investigated by the Board are referred to the Attorney General and the local district attorney's offices for prosecution.
  3. Misrepresentation (Civil and Criminal) -- 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:
    1. intentionally and materially understate or conceal payroll,
    2. conceal employee duties to avoid proper classification, or
    3. 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:
    1. Paying workers "off the books,"
    2. Not reporting wages paid to illegal aliens,
    3. Misclassifying employees as "independent contractors," and
    4. Misclassifying the work of a business to a classification that is less hazardous (identifying all roofers as secretarial staff), and/or
    5. Intentionally, materially misrepresenting or concealing information pertinent to calculation of premium paid.
  4. Failure To Secure Coverage (Civil) Section 52 [5] of the Workers' Compensation Law provides that the Chair, upon finding that an employer has failed for a period of not less than ten consecutive days to make the provision for payment of compensation may impose upon such employer, in addition to all other penalties, fines or assessments, a penalty of $2,000 dollars for each ten day period of non-compliance or a sum not in excess of two times the cost of compensation for its payroll for the period of such failure, which sum shall be paid into the uninsured employers' fund.

    When an employer fails to provide business records sufficient to enable the chair to determine the employer's payroll for the period requested for the calculation of the penalty provided in this section, the imputed weekly payroll for each employee, corporate officer, sole proprietor, or partner shall be the New York state average weekly wage, multiplied by 1.5. Where the employer is a corporation, the president, secretary and treasurer thereof shall be liable for the penalty.
  5. Failure To Maintain Accurate Payroll (Criminal) Section 131 [1] of the Workers Compensation Law provides that every employer shall keep a true and accurate record of the number of his or her employees, the classification of employees, information regarding employee accidents and the wages paid by him or her for a period of four years which records shall be open to inspection at any time, and as often as may be necessary to verify the same by investigators of the board, by the authorized auditors, accountants or inspectors of the carrier with whom the employer is insured, or by such other authorized by statute.

    Any employer who shall fail to keep such records, who shall willfully fail to furnish such record as required in this section or who shall falsify any such records, shall be guilty of a misdemeanor and subject to a fine of not less than $5,000 nor more than $10,000 in addition to any other penalties otherwise provided by law. Any employer that has previously been subject to criminal penalties under this section within the prior ten years shall be guilty of a class E felony, and subject to a fine of not less than $10,000 nor more than $25,000 in addition to any penalties otherwise provided by law.
  6. Failure To Maintain Accurate Payroll Records (Civil) Section 131 [3] of the Workers' Compensation Law provides that the Chair, upon finding that an employer has failed to keep accurate payroll records may impose upon such employer, in addition to all other penalties, fines or assessments, a penalty of $1,000 for each ten day period of non-compliance or a sum not in excess of two times the cost of compensation for its payroll for the period of such failure, which sum shall be paid into the uninsured employers' fund.

    When an employer fails to provide business records sufficient to enable the chair to determine the employer's payroll for the period requested for the calculation of the penalty provided in this section, the imputed weekly payroll for each employee, corporate officer, sole proprietor, or partner shall be the New York state average weekly wage, multiplied by 1.5. Where the employer is a corporation, the president, secretary and treasurer thereof shall be liable for the penalty.