2023 New York Laws › WKC - Workers' Compensation › Article 4 - Security for Compensation › 52 - Effect of Failure to Secure Compensation.

§  52.  Effect  of  failure  to secure compensation. 1. (a) Failure to
secure the payment of compensation for five or less employees  within  a
twelve month period shall constitute a misdemeanor, and is punishable by
a  fine  of  not  less  than  one  thousand  nor more than five thousand
dollars.  Failure to secure the payment of compensation  for  more  than
five  employees  within a twelve month period shall constitute a class E
felony, and is punishable by a fine  of  not  less  than  five  thousand
dollars  nor  more  than fifty thousand dollars in addition to any other
penalties otherwise provided by law. It shall be an affirmative  defense
to  any  criminal  prosecution under this section that the employer took
reasonable steps to secure compensation.
(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, and fined not less than ten thousand nor more than fifty
thousand dollars in addition to  any  other  penalties  including  fines
otherwise provided by law.
(c)  Where the employer is a corporation, the president, secretary and
treasurer thereof shall be liable for failure to secure the  payment  of
compensation  under  this section. It shall be an affirmative defense to
any action against any officer of a corporation under this section  that
the officer took reasonable steps to ensure that the corporation secured
compensation,  that  proper internal procedures were in effect to do so,
and that proper internal controls existed  to  monitor  compliance  with
said procedures.
(d)   If   at  any  time  an  employer  intentionally  and  materially
understates  or  conceals  payroll,  or  intentionally  and   materially
misrepresents  or  conceals  employee  duties  so  as  to  avoid  proper
classification for calculation of premium paid to  secure  compensation,
or  intentionally  and  materially misrepresents or conceals information
pertinent to the calculation of premium  paid  to  secure  compensation,
such  employer shall be deemed to have failed to secure compensation and
shall be subject to the sanctions applicable to this section.
(e) A stop-work order issued because an employer  is  deemed  to  have
failed  to  secure compensation under section one hundred forty-one-a of
this chapter shall have no effect upon an employer's or  carrier's  duty
to  provide benefits under this chapter or upon any of the employer's or
carrier's rights and defenses.
2. All fines imposed under this chapter, except  as  herein  otherwise
provided,  shall  be  paid  directly  and  immediately  by  the  officer
collecting the same to the chairman, and shall be paid by him  into  the
uninsured  employers'  fund  created  under section twenty-six-a of this
chapter, provided, however, that all such fines collected by justices of
towns and villages shall be paid to the state comptroller in  accordance
with  the provisions of section twenty-seven of the town law and section
4-410 of the village law respectively.
3. In any prosecution hereunder the failure of the  employer  to  file
with  the chairman, within ten days after demand, a statement subscribed
by the employer and affirmed by him  as  true  under  the  penalties  of
perjury  showing  specifically (a) the name of the stock company, mutual
corporation or reciprocal insurer in which such employer is insured  and
the  number  and  the  date  of  issuance  and  term  of  such policy of
insurance, or (b) that the said employer is insured with the state  fund
in  which case he shall give the number of such policy of insurance, the
date of issuance and term thereof, or (c) that  the  said  employer  has
been  authorized  to  do  business as a self-insurer pursuant to section
fifty of this article, giving the date of said authorization, or  (d)  a
legal  reason,  if  any,  why  said  employer  is not required to secure

compensation, shall constitute prima facie evidence  that  the  employer
has  failed  to secure compensation as herein required. The statement to
be filed herein shall be subscribed by the employer or if  the  employer
is  a  corporation by one of the officers herein named in which he shall
state that he has read such statement subscribed by him  and  knows  the
contents thereof and that same is true of his own knowledge.
4.  If,  however,  there has been an accident and the board shall have
made an award against the employer as a non-insured employer, the making
of such  award,  except  in  a  case  where  the  employer  had  secured
compensation  insurance  which was in effect at the time of the accident
but the carrier later became insolvent,  shall  constitute  prima  facie
evidence  of  an  employment  by  the  employer  of  an  employee  in an
occupation in which the said employer was required to carry compensation
and of the failure of the employer to secure  the  payment  of  workers'
compensation  on  the  date  of  the  accident involved in said award. A
certified copy of such award shall be received as competent evidence  of
the making thereof in any criminal prosecution hereunder.
5. 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 required by section fifty of this article, may impose  upon
such  employer, in addition to all other penalties, fines or assessments
provided for in this chapter, a penalty of up to  two  thousand  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
created under section twenty-six-a of this  chapter.  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. If the employer shall
within  thirty  days  after notice of the imposition of a penalty by the
chair pursuant to this subdivision make an application in affidavit form
for a redetermination review of such penalty  the  chair  shall  make  a
decision in writing on the issues raised on such application.