New York Workers’ Comp Board Issues 1,000th Stop Work Order

September 9, 2008

Less than 14 months after it was granted the authority, the New York State Workers’ Compensation Board has issued 1,000 stop work orders to New York businesses that have failed to carry workers’ compensation insurance.

“The stop work order is an important component of the 2007 reform effort because it demonstrates New York’s commitment to protecting workers,” Chairman Zachary S. Weiss said. “The public can expect our Compliance staff to aggressively enforce the law that says businesses in this state must carry insurance to protect its workers. It’s the right thing to do.”

A total of $7 million in penalties was also levied statewide against those businesses. This includes $5.49 million in penalties to businesses that did not have the mandatory insurance protection for injured workers. There were also $1.57 million in penalties for failing to produce business records that show, for example, number of employees, wages paid, and classification of employees.

Those penalties are placed in the Uninsured Employers Fund, which pays the claims of injured workers whose employers do not carry the required insurance. New York is one of only four states whose uninsured employer funds are currently operating in a surplus. New York’s balance has risen every year since 2005, and stands today at $49.2 million.

Gov. David Paterson has reaffirmed to the board his expectation that it will ensure all applicable laws and regulations protecting injured workers are enforced. In June, the penalty for failing to maintain insurance coverage was increased to $2,000 for every 10 days out of compliance, up from the $1,000 set in the 2007 Workers’ Compensation Reform Act. Previously, the noncompliance penalty was $250 for every 10 days.

While it issued the first stop work order on July 17, 2007, the board has stepped up its use of this tool. Since March, 931 stop work orders were issued. Board investigators serve them on compliance sweeps requiring employers to immediately cease all business operations. Carriers must advise the board after every workers’ compensation policy is written or canceled, and this data is captured in an easily searchable database. Businesses that don’t carry insurance are readily identified.

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