NY Work Comp L § 26-A (2021)
2021 New York Laws WKC - Workers' Compensation Article 2 - Compensation 26-A - Procedure and Payment of Compensation in Claims Against Uninsured Defaulting Employers.

§  26-a.  Procedure  and  payment  of  compensation  in claims against uninsured  defaulting  employers.  1.  (a)  Notwithstanding  any   other provision  of this chapter, when a claim for compensation is filed by an employee, or in case of death by  the  employee's  dependents,  and  the employer  has failed to secure the payment of compensation in accordance with section fifty of this chapter,  to  make  deposit  of  security  in accordance  with  section twenty-six of this chapter and to make payment of compensation into the fund created under this  section  according  to the  terms  of  any  award  including,  without  limitation, awards made pursuant to subdivision five of section thirteen-g, subdivision  two  of section  thirteen-f, subdivision five of section thirteen-k, subdivision five of section thirteen-l and subdivision six of section thirteen-m  of this  article, payment of the award shall be promptly made from the fund created under this section in accordance with the terms thereof and  the provisions  of  subdivision three of this section. The employer shall be liable with the fund for payment of the award. Where the employer  is  a corporation the president, secretary and treasurer thereof shall also be personally,  jointly  and  severally  liable  with  the  corporation for payment of the award. The employer shall pay the award into the fund, in accordance with the time limitations contained in section twenty-five of this article.  (b) No such award, however, for any service specified  in  subdivision five   of   section   thirteen-a   of  this  article  requiring  advance authorization of the employer in accordance with the provisions of  such subdivision, shall be payable from the fund unless advance authorization therefor  was  secured  from  the  representative  of  the  fund  or  is determined by the board  to  be  necessary.  Notwithstanding  any  other provision under this section, awards made pursuant to section fourteen-a of  this article shall not be the liability of the fund and shall not be payable therefrom nor shall payment of the present value of benefits  be required  to  be  paid into the aggregate trust fund pursuant to section twenty-seven of  this  article  in  any  case  in  which  the  uninsured employers' fund is liable.   2.  Uninsured  employers'  fund.  (a) There is hereby created a fund which shall be known as the "uninsured employers' fund" to  provide  for the payment of awards against uninsured employers in accordance with the provisions  of this section and shall be available only for the purposes stated in this subdivision, and the assets thereof shall not at any time be appropriated or directed to any other use or purpose, except  as  set forth in section fifty-a of this chapter.  (b)  For  the  purpose  of establishing and maintaining this fund, the board,  upon  rendering  a  decision  with  respect  to  any  claim  for compensation  under  this  chapter that the employer liable therefor has failed to secure the payment of compensation  with  respect  thereto  in accordance   with  section  fifty  of  this  chapter,  shall  impose  an assessment in the sum of one thousand dollars for each ten day period of non-compliance or a sum not in excess of two times  the  amount  of  the cost  of  compensation  for  its  payroll for the period of such failure against the employer and direct its payment into the fund in  connection with  each such claim wherein injury shall have occurred on or after the first of May, nineteen hundred fifty-nine, or in death cases where death as the result of injury shall have occurred on or after said date.  (c) If the employer shall fail to pay these assessments into the  fund within  ten  days after date of mailing of notice thereof to him or her, such default shall constitute a default in payment of  compensation  due pursuant  to  the  provisions  of section twenty-six of this article and judgment therefor shall be entered in accordance  therewith,  all  other provisions of said section to be deemed applicable with respect thereto,  except  to  the  extent that said provisions may be clearly inconsistent with the  provisions  of  this  section.  All  sums  collected  from  an uninsured  employer  with respect to any claim for compensation referred to in this section but not payable from the fund, except fines collected from such employer pursuant to section fifty-two of this chapter whether such collection is made prior or subsequent to entry of judgment against such  employer,  shall  be  deemed  in payment of an applicable first in satisfaction of any compensation and benefits  due  from  such  employer with  respect  to  such claim and security demand, if any, in connection therewith and only when such obligations are satisfied in full shall the balance  of  said  sums  collected,  if  any,  be  deemed   payment   in satisfaction  of  and  applicable to the assessments above prescribed in this section.  (d) All sums recovered from uninsured employers on  judgments  entered for  failure to pay assessments as hereinbefore provided and for failure to pay compensation and benefits which were paid from  the  fund  herein created, shall upon such recovery be paid into said fund.  (e)  All  awards  made  on  or  after  July  first,  nineteen  hundred sixty-nine for every case of injury causing death for which there are no persons entitled to compensation, and where there are  persons  entitled to  compensation  but the total amount of such compensation is less than two or five thousand dollars as the case may  be  exclusive  of  funeral benefits,  pursuant  to  the  provisions of subdivision three of section twenty-five-a  of  this  article  shall  be  paid  into  the   uninsured employers' fund.  (f)  As  promptly  as  practicable  after July first, nineteen hundred ninety-one and annually thereafter as soon as practicable after  January first  in  each succeeding year, the chair shall ascertain the condition of the uninsured employers' fund. The chair shall transfer to  the  fund out  of  the moneys collected pursuant to subdivision two of section one hundred fifty-one of this chapter an amount which  will  raise  the  net cash  assets  of the fund to the level of either the amount spent by the fund in the prior year, or the amount estimated to be  expended  by  the fund  in  the  succeeding  year,  whichever is greater, except that such requirement shall not apply between August first, two thousand eight and August first, two thousand fifteen to the extent that section fifty-a of this chapter permits the fund to be at a different level.   3. The commissioner of taxation and finance shall be the custodian  of the  uninsured  employers'  fund  and  shall  invest  any surplus moneys thereof in securities which constitute  legal  investments  for  savings banks  under the laws of this state and in interest bearing certificates of deposit of a bank or trust  company  located  and  authorized  to  do business  in  this  state  or  of  a national bank located in this state secured by a pledge of direct obligations of the United States or of the state of New York, or in  accordance  with  the  provisions  of  section ninety-eight-a  of  the  state  finance  law,  in an amount equal to the amount of such  certificates  of  deposit,  and  may  sell  any  of  the securities or certificates of deposit in which such fund is invested, if necessary  for the proper administration or in the best interest of such fund. Disbursements from such fund as provided by this section shall  be paid by the commissioner of taxation and finance upon vouchers signed by the chairman.   The  commissioner  of taxation and finance, as custodian of such fund, as soon as practicable after August first,  nineteen  hundred  sixty-two and  annually  thereafter,  shall furnish to the chairman of the board a statement of the fund, setting forth the balance of moneys in  the  said fund  as of the time of the preceding statement, the income of the fund, a summary of payments out of the fund on account of compensation ordered  to be paid therefrom by the board, medical and other expenses,  and  all other  charges  against  the  fund  in the interim and setting forth the balance of the fund remaining to its credit as of the end of the  period being reported. Such statement shall be open to public inspection in the office  of  the chairman, and a copy thereof shall be transmitted by the chairman to the superintendent of financial services. The superintendent of financial services may examine into the condition of such fund at any time on his own initiative or on  request  of  the  chairman.  He  shall verify  the  receipts and disbursements of the fund, and shall ascertain the liability of the fund upon all cases in which awards of compensation have been made and charged against said fund and shall render  a  report of  such facts to the chairman. Such report shall also be open to public inspection in the office of the chairman.   4. Upon notice to the representative of the fund, the board, if in its discretion it deems the interests  of  the  fund  will  be  best  served thereby,  may  compromise the amount for which judgment has been entered against an employer pursuant to this section and  the  judgment  entered may  be modified accordingly. Such compromise shall be effective without the necessity of obtaining the approval  of  any  other  state  official thereto,  but  shall  not reduce the amount of benefits payable to or on behalf of any claimant under this section.   5. The chairman of the workmen's compensation board shall  appoint  an employee  of  the  board  who  is  an  attorney  at law duly admitted to practice in the state of New York to serve as the representative of  the fund  created  under  this section and shall assign to assist him in the discharge of his duties as such representative under the  provisions  of this  section,  such  other employees of the board as the chairman deems necessary for  this  purpose.  Such  representative  may  apply  to  the chairman  for  authority  to  hire such medical and other experts and to defray the expense thereof and of such witnesses as are necessary  to  a proper  defense  of  the claim within an amount in the discretion of the chairman and, if authorized, such amount shall be a charge against  said fund.  The  representative  of the fund may appear for and represent the interest of the fund in any case in court involving the  rights  of  the fund against another not in the same employ as the employee who received benefits  under this chapter and whose injury or death was caused by the negligence or wrong of such other.   6. Whenever it appears, in a claim for benefits  under  this  chapter, that  the employer may have failed to secure the payment of compensation in accordance with section fifty of this  chapter,  the  fund  shall  be given  notice  of  all  proceedings  in  the  claim.  In such event, the provisions of this chapter with respect to procedure, the  right  to  be heard  and  the  right  to  apply to the board for review of a referee's decision and to appeal to the courts shall be reserved to the  claimant, to  the uninsured employer, and to the fund. Upon the application of the representative of the fund for a modification or rescission or review of an award, the board may review any award, decision or order and, on such review, may affirm, reverse, or modify any decision or award as the  law and  the  facts  may require, or take such other action as may be in the interest of justice. An appeal to the appellate division of the  supreme court, third department, or to the court of appeals shall not operate as a  stay  of the payments by the uninsured employer or by the fund of the compensation required by the terms of the award or of the payment of the doctor's bills found to be fair and  reasonable.  Where  such  award  is reduced  or  rescinded  upon appeal, the uninsured employer or the fund, whichever made payment, shall be entitled  to  reimbursement  in  a  sum equal  to  the  compensation  in  dispute  paid  by  such  party  to the respondent pending adjudication of the appeal, and,  if  the  claim  for  workers' compensation is disallowed, to a sum equal to the amount of the doctor's  bills  paid  by such party pending adjudication of the appeal. Such  reimbursement  shall  be  paid  from  administration  expenses  as provided  in section one hundred fifty-one of this chapter upon vouchers approved by the chair. To the extent of any reimbursement to  the  fund, the  uninsured employer shall be entitled to reimbursement from the fund for payments made into the fund in accordance with  subdivision  one  of this section.   7.  All the rights, powers, and benefits of the employer under section twenty-nine of this chapter shall become the rights, powers and benefits of the fund in any case  in  which  the  fund  has  paid  or  is  paying compensation  to  an  injured  employee  or  his  dependents  under this section. If the employer has also paid compensation to or on  behalf  of the  injured employee or his dependents in such case any recovery by the fund pursuant to subdivision one of section twenty-nine shall  first  be applied  to  repayment of any awards paid by the fund to or on behalf of the injured employee or his dependents in such case,  the  balance  then applied  to any outstanding unsatisfied demand for security in said case and assessments imposed against the employer pursuant to the  provisions of  this section, the remainder, if any, to be returned to the employer. If the employer has also paid  compensation  to  or  on  behalf  of  the injured  employee  or his dependents in such case, that portion, if any, of a recovery by  the  fund  pursuant  to  subdivision  two  of  section twenty-nine  which  is  in  excess  of  the total amount of compensation awarded to or on behalf of such injured employee or his  dependents  and the  reasonable  and  necessary  expenditures incurred in effecting such recovery shall be  apportioned  between  the  injured  employee  or  his dependents  and the fund in the manner provided in said subdivision two. The balance of said recovery shall first be  applied  to  reimburse  the fund  for  its  reasonable  and necessary expenditures in effecting such recovery and the remainder shall be applied to repayment  of  any  award paid  by  the  fund  to  or  on  behalf  of  the injured employee or his dependents in such case. If there still remains a balance it shall first be applied to the outstanding unsatisfied demand for security,  if  any, in  said  case  and  assessments,  if  any, imposed against the employer pursuant to the provisions of this section; the remainder, if any, to be returned to the employer.   7-a. Notwithstanding any other provision  of  section  twenty-nine  of this article to the contrary, a compromise by the claimant of his or her cause  of  action  as  set  forth  in  said  section twenty-nine of this article, in an amount less than the sum paid to  or  on  behalf  of  the claimant from the uninsured employers' fund, shall be made only with the written consent of the chair.   8. The provisions of this section with respect to the liability of the uninsured  employers'  fund  to  pay awards against uninsured defaulting employers shall apply only to claims wherein the injury shall  occur  on or  after  the  first  day  of  October,  nineteen hundred sixty-two, or wherein death shall occur as the result of an  injury  sustained  on  or after the aforesaid first day of October.   9. The chairman may make reasonable regulations for the processing and payment of compensation out of the uninsured employers' fund.   10.  The  liability  of the chairman, the commissioner of taxation and finance, the fund and the state of New York with respect to  payment  of any  compensation,  benefits,  expenses,  fees or disbursements properly chargeable against the uninsured employers' fund shall be limited to the assets in said fund and they shall not otherwise in any way or manner be liable for the making of any such payment.    11. All assessments payable pursuant to the provisions of this section shall be liens against  the  assets  of  the  employer  liable  therefor without  limit  of  amount,  subordinate,  however, to claims for unpaid wages and prior recorded liens.   12.  Whenever  the  term  employer is used in this section it shall be deemed to include without limitation a contractor liable for the payment of  compensation  pursuant  to  section  fifty-six  of   the   workmen's compensation law.   13.  Notwithstanding  any other provision of this chapter, in any case of injury or death to the president, secretary, treasurer or  any  other officer  charged  with the obligation of obtaining workers' compensation insurance, of a corporation,  any  awards  of  compensation  or  medical expenses  payable  to  or  on behalf of such officer or to his surviving spouse, children and dependents as defined by section  sixteen  of  this article  made  against  the  corporation as an uninsured employer solely because of the injury or death of such officer, shall in no event be the liability of the uninsured employers' fund  and  shall  not  be  payable therefrom.   14.  Notwithstanding  any other provision of this chapter, in any case of injury or death to a self-employed  person  or  to  a  partner  of  a partnership as defined in section ten of the partnership law, any awards of  compensation  or  medical  expenses  payable to or on behalf of such self-employed person or partner of a partnership  or  to  his  surviving spouse,  children  and  dependents as defined by section sixteen of this article made against the  self-employed  person  or  partnership  as  an uninsured  employer  solely  because  of  the  injury  or  death of such self-employed person or partner, shall in no event be the  liability  of the uninsured employers' fund and shall not be payable therefrom.