2023 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.
6-a.  In  the event that the board is unable to determine the identity
of the responsible insurance carrier for the employer within thirty days
of the filing of a new claim, the board shall:
(a) appoint the uninsured employers' fund  as  the  responsible  party
until such time as the identity of the responsible insurance carrier for
the  employer  is  determined.  Upon  such  appointment,  the  uninsured
employers' fund shall immediately commence payments and provide  medical
care in accordance with the provisions of this chapter;
(b)  schedule  a  hearing to determine the identity of the responsible
insurance carrier for the employer  and  to  determine  such  claim  for
compensation  in  accordance  with  the provisions of subdivision one of
this section; and
(c) provide notice of such  claim  and  hearing  to  the  employer  by
certified  mail,  return  receipt  requested,  with a direction that the
employer provide proof of having insurance  in  effect  as  provided  by
section ten of this article.
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.