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Workers' Compensation Board

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Adoption of Part 308 to Title 12 NYCRR

Employer Compliance, Enforcement, Record and Report Requirements and Stop-Work Orders

Chapter 6 of the Laws of 2007 enacted sweeping reforms to the Workers' Compensation Law (WCL). One of the major themes of the reform legislation was the elimination of fraud, which includes the failure of employers to obtain and maintain workers' compensation coverage or keep required records. The reform legislation amended WCL §52(5) to increase the civil penalty imposed by the Chair on employers who fail to obtain or maintain workers' compensation coverage. Prior to the reform legislation, the civil penalty was $250 for each ten day period of non-compliance or a sum not in excess of two percent of the employer's payroll. The reform legislation increased it to $1,000 for each ten day period of non-compliance or two times the cost of compensation. Section 131 was amended to require employers to keep additional records, increase the criminal penalty for failing to keep the required records and impose a civil penalty the same as that for failing to obtain or maintain coverage.

The workers' compensation reform legislation also amended WCL §§ 2 to define the term "cost of compensation" and added §141-a regarding stop-work orders. The definition of "cost of compensation" in WCL §2 (22) directs the Board to adopt a regulation that sets forth how cost of compensation will be calculated. WCL §141-a authorizes the Chair, or his designee, to, among other things, examine and copy business records and issue a stop-work order when an employer has failed to secure workers' compensation coverage or pay penalties. Subdivision (2) of WCL §141-a directs the Chair to, "specify by rule the business records that employers must maintain and produce to comply with this section." Subdivision (4) of WCL §141-a authorizes the Chair to require an employer to file periodic reports showing the employer's compliance with the coverage requirements for a period not to exceed two years when a stop-work order is removed. The content of such reports must be specified in rules of the Board. Also, an employer who has been issued a stop-work order may request a redetermination of the issuance of such order.

This rule adds a new Part 308 to Title 12 NYCRR to implement these provisions. A Notice of Proposed Rule Making was published in the April 28, 2010, edition of the State RegisterLink to External Website. The public comment period ended on June 14, 2010. The Board did not receive any comments. At its July 20th monthly meeting, the Board voted unanimously to adopt Part 308. A Notice of Adoption was published in the August 4, 2010, edition of the State Register. Part 308 was effective immediately upon publication on August 4th.