N.Y. WKC Law § 26-A — New York Code / Act WKC / Article 2 / Section 26-A
Procedure and payment of compensation in claims against uninsured defaulting employers
Status: in_force

§ 26-a. Procedure and payment of compensation in claims against\nuninsured defaulting employers. 1. (a) Notwithstanding any other\nprovision of this chapter, when a claim for compensation is filed by an\nemployee, or in case of death by the employee's dependents, and the\nemployer has failed to secure the payment of compensation in accordance\nwith section fifty of this chapter, to make deposit of security in\naccordance with section twenty-six of this chapter and to make payment\nof compensation into the fund created under this section according to\nthe terms of any award including, without limitation, awards made\npursuant to subdivision five of section thirteen-g, subdivision two of\nsection thirteen-f, subdivision five of section thirteen-k, subdivision\nfive of section thirteen-l and subdivision six of section thirteen-m of\nthis article, payment of the award shall be promptly made from the fund\ncreated under this section in accordance with the terms thereof and the\nprovisions of subdivision three of this section. The employer shall be\nliable with the fund for payment of the award. Where the employer is a\ncorporation the president, secretary and treasurer thereof shall also be\npersonally, jointly and severally liable with the corporation for\npayment of the award. The employer shall pay the award into the fund, in\naccordance with the time limitations contained in section twenty-five of\nthis article.\n  (b) No such award, however, for any service specified in subdivision\nfive of section thirteen-a of this article requiring advance\nauthorization of the employer in accordance with the provisions of such\nsubdivision, shall be payable from the fund unless advance authorization\ntherefor was secured from the representative of the fund or is\ndetermined by the board to be necessary. Notwithstanding any other\nprovision under this section, awards made pursuant to section fourteen-a\nof this article shall not be the liability of the fund and shall not be\npayable therefrom nor shall payment of the present value of benefits be\nrequired to be paid into the aggregate trust fund pursuant to section\ntwenty-seven of this article in any case in which the uninsured\nemployers' fund is liable.\n  2. Uninsured employers' fund.  (a) There is hereby created a fund\nwhich shall be known as the "uninsured employers' fund" to provide for\nthe payment of awards against uninsured employers in accordance with the\nprovisions of this section and shall be available only for the purposes\nstated in this subdivision, and the assets thereof shall not at any time\nbe appropriated or directed to any other use or purpose, except as set\nforth in section fifty-a of this chapter.\n  (b) For the purpose of establishing and maintaining this fund, the\nboard, upon rendering a decision with respect to any claim for\ncompensation under this chapter that the employer liable therefor has\nfailed to secure the payment of compensation with respect thereto in\naccordance with section fifty of this chapter, shall impose an\nassessment in the sum of one thousand dollars for each ten day period of\nnon-compliance or a sum not in excess of two times the amount of the\ncost of compensation for its payroll for the period of such failure\nagainst the employer and direct its payment into the fund in connection\nwith each such claim wherein injury shall have occurred on or after the\nfirst of May, nineteen hundred fifty-nine, or in death cases where death\nas the result of injury shall have occurred on or after said date.\n  (c) If the employer shall fail to pay these assessments into the fund\nwithin ten days after date of mailing of notice thereof to him or her,\nsuch default shall constitute a default in payment of compensation due\npursuant to the provisions of section twenty-six of this article and\njudgment therefor shall be entered in accordance therewith, all other\nprovisions of said section to be deemed applicable with respect thereto,\nexcept to the extent that said provisions may be clearly inconsistent\nwith the provisions of this section. All sums collected from an\nuninsured employer with respect to any claim for compensation referred\nto in this section but not payable from the fund, except fines collected\nfrom such employer pursuant to section fifty-two of this chapter whether\nsuch collection is made prior or subsequent to entry of judgment against\nsuch employer, shall be deemed in payment of an applicable first in\nsatisfaction of any compensation and benefits due from such employer\nwith respect to such claim and security demand, if any, in connection\ntherewith and only when such obligations are satisfied in full shall the\nbalance of said sums collected, if any, be deemed payment in\nsatisfaction of and applicable to the assessments above prescribed in\nthis section.\n  (d) All sums recovered from uninsured employers on judgments entered\nfor failure to pay assessments as hereinbefore provided and for failure\nto pay compensation and benefits which were paid from the fund herein\ncreated, shall upon such recovery be paid into said fund.\n  (e) All awards made on or after July first, nineteen hundred\nsixty-nine for every case of injury causing death for which there are no\npersons entitled to compensation, and where there are persons entitled\nto compensation but the total amount of such compensation is less than\ntwo or five thousand dollars as the case may be exclusive of funeral\nbenefits, pursuant to the provisions of subdivision three of section\ntwenty-five-a of this article shall be paid into the uninsured\nemployers' fund.\n  (f) As promptly as practicable after July first, nineteen hundred\nninety-one and annually thereafter as soon as practicable after January\nfirst in each succeeding year, the chair shall ascertain the condition\nof the uninsured employers' fund. The chair shall transfer to the fund\nout of the moneys collected pursuant to subdivision two of section one\nhundred fifty-one of this chapter an amount which will raise the net\ncash assets of the fund to the level of either the amount spent by the\nfund in the prior year, or the amount estimated to be expended by the\nfund in the succeeding year, whichever is greater, except that such\nrequirement shall not apply between August first, two thousand eight and\nAugust first, two thousand fifteen to the extent that section fifty-a of\nthis chapter permits the fund to be at a different level.\n  3. The commissioner of taxation and finance shall be the custodian of\nthe uninsured employers' fund and shall invest any surplus moneys\nthereof in securities which constitute legal investments for savings\nbanks under the laws of this state and in interest bearing certificates\nof deposit of a bank or trust company located and authorized to do\nbusiness in this state or of a national bank located in this state\nsecured by a pledge of direct obligations of the United States or of the\nstate of New York, or in accordance with the provisions of section\nninety-eight-a of the state finance law, in an amount equal to the\namount of such certificates of deposit, and may sell any of the\nsecurities or certificates of deposit in which such fund is invested, if\nnecessary for the proper administration or in the best interest of such\nfund. Disbursements from such fund as provided by this section shall be\npaid by the commissioner of taxation and finance upon vouchers signed by\nthe chairman.\n  The commissioner of taxation and finance, as custodian of such fund,\nas soon as practicable after August first, nineteen hundred sixty-two\nand annually thereafter, shall furnish to the chairman of the board a\nstatement of the fund, setting forth the balance of moneys in the said\nfund as of the time of the preceding statement, the income of the fund,\na summary of payments out of the fund on account of compensation ordered\nto be paid therefrom by the board, medical and other expenses, and all\nother charges against the fund in the interim and setting forth the\nbalance of the fund remaining to its credit as of the end of the period\nbeing reported. Such statement shall be open to public inspection in the\noffice of the chairman, and a copy thereof shall be transmitted by the\nchairman to the superintendent of financial services. The superintendent\nof financial services may examine into the condition of such fund at any\ntime on his own initiative or on request of the chairman. He shall\nverify the receipts and disbursements of the fund, and shall ascertain\nthe liability of the fund upon all cases in which awards of compensation\nhave been made and charged against said fund and shall render a report\nof such facts to the chairman. Such report shall also be open to public\ninspection in the office of the chairman.\n  4. Upon notice to the representative of the fund, the board, if in its\ndiscretion it deems the interests of the fund will be best served\nthereby, may compromise the amount for which judgment has been entered\nagainst an employer pursuant to this section and the judgment entered\nmay be modified accordingly. Such compromise shall be effective without\nthe necessity of obtaining the approval of any other state official\nthereto, but shall not reduce the amount of benefits payable to or on\nbehalf of any claimant under this section.\n  5. The chairman of the workmen's compensation board shall appoint an\nemployee of the board who is an attorney at law duly admitted to\npractice in the state of New York to serve as the representative of the\nfund created under this section and shall assign to assist him in the\ndischarge of his duties as such representative under the provisions of\nthis section, such other employees of the board as the chairman deems\nnecessary for this purpose. Such representative may apply to the\nchairman for authority to hire such medical and other experts and to\ndefray the expense thereof and of such witnesses as are necessary to a\nproper defense of the claim within an amount in the discretion of the\nchairman and, if authorized, such amount shall be a charge against said\nfund. The representative of the fund may appear for and represent the\ninterest of the fund in any case in court involving the rights of the\nfund against another not in the same employ as the employee who received\nbenefits under this chapter and whose injury or death was caused by the\nnegligence or wrong of such other.\n  6. Whenever it appears, in a claim for benefits under this chapter,\nthat the employer may have failed to secure the payment of compensation\nin accordance with section fifty of this chapter, the fund shall be\ngiven notice of all proceedings in the claim. In such event, the\nprovisions of this chapter with respect to procedure, the right to be\nheard and the right to apply to the board for review of a referee's\ndecision and to appeal to the courts shall be reserved to the claimant,\nto the uninsured employer, and to the fund. Upon the application of the\nrepresentative of the fund for a modification or rescission or review of\nan award, the board may review any award, decision or order and, on such\nreview, may affirm, reverse, or modify any decision or award as the law\nand the facts may require, or take such other action as may be in the\ninterest of justice. An appeal to the appellate division of the supreme\ncourt, third department, or to the court of appeals shall not operate as\na stay of the payments by the uninsured employer or by the fund of the\ncompensation required by the terms of the award or of the payment of the\ndoctor's bills found to be fair and reasonable. Where such award is\nreduced or rescinded upon appeal, the uninsured employer or the fund,\nwhichever made payment, shall be entitled to reimbursement in a sum\nequal to the compensation in dispute paid by such party to the\nrespondent pending adjudication of the appeal, and, if the claim for\nworkers' compensation is disallowed, to a sum equal to the amount of the\ndoctor's bills paid by such party pending adjudication of the appeal.\nSuch reimbursement shall be paid from administration expenses as\nprovided in section one hundred fifty-one of this chapter upon vouchers\napproved by the chair. To the extent of any reimbursement to the fund,\nthe uninsured employer shall be entitled to reimbursement from the fund\nfor payments made into the fund in accordance with subdivision one of\nthis section.\n  6-a. In the event that the board is unable to determine the identity\nof the responsible insurance carrier for the employer within thirty days\nof the filing of a new claim, the board shall:\n  (a) appoint the uninsured employers' fund as the responsible party\nuntil such time as the identity of the responsible insurance carrier for\nthe employer is determined. Upon such appointment, the uninsured\nemployers' fund shall immediately commence payments and provide medical\ncare in accordance with the provisions of this chapter;\n  (b) schedule a hearing to determine the identity of the responsible\ninsurance carrier for the employer and to determine such claim for\ncompensation in accordance with the provisions of subdivision one of\nthis section; and\n  (c) provide notice of such claim and hearing to the employer by\ncertified mail, return receipt requested, with a direction that the\nemployer provide proof of having insurance in effect as provided by\nsection ten of this article.\n  7. All the rights, powers, and benefits of the employer under section\ntwenty-nine of this chapter shall become the rights, powers and benefits\nof the fund in any case in which the fund has paid or is paying\ncompensation to an injured employee or his dependents under this\nsection. If the employer has also paid compensation to or on behalf of\nthe injured employee or his dependents in such case any recovery by the\nfund pursuant to subdivision one of section twenty-nine shall first be\napplied to repayment of any awards paid by the fund to or on behalf of\nthe injured employee or his dependents in such case, the balance then\napplied to any outstanding unsatisfied demand for security in said case\nand assessments imposed against the employer pursuant to the provisions\nof this section, the remainder, if any, to be returned to the employer.\nIf the employer has also paid compensation to or on behalf of the\ninjured employee or his dependents in such case, that portion, if any,\nof a recovery by the fund pursuant to subdivision two of section\ntwenty-nine which is in excess of the total amount of compensation\nawarded to or on behalf of such injured employee or his dependents and\nthe reasonable and necessary expenditures incurred in effecting such\nrecovery shall be apportioned between the injured employee or his\ndependents and the fund in the manner provided in said subdivision two.\nThe balance of said recovery shall first be applied to reimburse the\nfund for its reasonable and necessary expenditures in effecting such\nrecovery and the remainder shall be applied to repayment of any award\npaid by the fund to or on behalf of the injured employee or his\ndependents in such case. If there still remains a balance it shall first\nbe applied to the outstanding unsatisfied demand for security, if any,\nin said case and assessments, if any, imposed against the employer\npursuant to the provisions of this section; the remainder, if any, to be\nreturned to the employer.\n  7-a. Notwithstanding any other provision of section twenty-nine of\nthis article to the contrary, a compromise by the claimant of his or her\ncause of action as set forth in said section twenty-nine of this\narticle, in an amount less than the sum paid to or on behalf of the\nclaimant from the uninsured employers' fund, shall be made only with the\nwritten consent of the chair.\n  8. The provisions of this section with respect to the liability of the\nuninsured employers' fund to pay awards against uninsured defaulting\nemployers shall apply only to claims wherein the injury shall occur on\nor after the first day of October, nineteen hundred sixty-two, or\nwherein death shall occur as the result of an injury sustained on or\nafter the aforesaid first day of October.\n  9. The chairman may make reasonable regulations for the processing and\npayment of compensation out of the uninsured employers' fund.\n  10. The liability of the chairman, the commissioner of taxation and\nfinance, the fund and the state of New York with respect to payment of\nany compensation, benefits, expenses, fees or disbursements properly\nchargeable against the uninsured employers' fund shall be limited to the\nassets in said fund and they shall not otherwise in any way or manner be\nliable for the making of any such payment.\n  11. All assessments payable pursuant to the provisions of this section\nshall be liens against the assets of the employer liable therefor\nwithout limit of amount, subordinate, however, to claims for unpaid\nwages and prior recorded liens.\n  12. Whenever the term employer is used in this section it shall be\ndeemed to include without limitation a contractor liable for the payment\nof compensation pursuant to section fifty-six of the workmen's\ncompensation law.\n  13. Notwithstanding any other provision of this chapter, in any case\nof injury or death to the president, secretary, treasurer or any other\nofficer charged with the obligation of obtaining workers' compensation\ninsurance, of a corporation, any awards of compensation or medical\nexpenses payable to or on behalf of such officer or to his surviving\nspouse, children and dependents as defined by section sixteen of this\narticle made against the corporation as an uninsured employer solely\nbecause of the injury or death of such officer, shall in no event be the\nliability of the uninsured employers' fund and shall not be payable\ntherefrom.\n  14. Notwithstanding any other provision of this chapter, in any case\nof injury or death to a self-employed person or to a partner of a\npartnership as defined in section ten of the partnership law, any awards\nof compensation or medical expenses payable to or on behalf of such\nself-employed person or partner of a partnership or to his surviving\nspouse, children and dependents as defined by section sixteen of this\narticle made against the self-employed person or partnership as an\nuninsured employer solely because of the injury or death of such\nself-employed person or partner, shall in no event be the liability of\nthe uninsured employers' fund and shall not be payable therefrom.\n