S T A T E   O F   N E W   Y O R K
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                                 7921--A

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                              June 10, 2013
                               ___________

Introduced by M. of A. CAHILL -- read once and referred to the Committee
  on  Labor  -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the workers' compensation law, in relation to  providing
  incentives for productive workers' compensation audits

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The workers' compensation law is amended by  adding  a  new
section 112-a to read as follows:
  S  112-A.  AUDITS  OF EMPLOYERS. 1. (A) EMPLOYERS IN ALL CLASSES OTHER
THAN THE CONSTRUCTION CLASS SHALL BE AUDITED NOT  LESS  FREQUENTLY  THAN
BIENNIALLY  AND  THE CHAIR OR BOARD MAY PROVIDE FOR MORE FREQUENT AUDITS
OF EMPLOYERS IN SPECIFIED  CLASSIFICATIONS  BASED  ON  FACTORS  SUCH  AS
AMOUNT  OF  PREMIUM,  TYPE  OF  BUSINESS, LOSS RATIOS, OR OTHER RELEVANT
FACTORS. IN NO EVENT SHALL EMPLOYERS IN THE CONSTRUCTION CLASS, GENERAT-
ING MORE THAN THE AMOUNT OF PREMIUM REQUIRED TO BE EXPERIENCE RATED,  BE
AUDITED  LESS  FREQUENTLY  THAN ANNUALLY. THE ANNUAL AUDITS REQUIRED FOR
CONSTRUCTION CLASSES SHALL BE A  PHYSICAL,  ONSITE  REVIEW  OF  ORIGINAL
PAYROLL  RECORDS, EMPLOYEE RECORDS, CHECKBOOKS, CASH BOOK (DISBURSEMENTS
AND RECEIPTS), GENERAL LEDGER, CONTRACTS, TAX RETURNS INCLUDING QUARTER-
LY PAYROLL FILINGS, AND ORIGINAL CERTIFICATES OF  INSURANCE.  THE  AUDIT
SHALL  BE  CONDUCTED  NO MORE THAN NINETY DAYS AFTER THE EXPIRATION OF A
POLICY PERIOD.  AT THE COMPLETION OF AN AUDIT, IF REQUESTED BY THE AUDI-
TOR, THE EMPLOYER OR OFFICER OF THE CORPORATION  AND  THE  AUDITOR  MUST
PRINT  AND SIGN THEIR NAMES ON THE AUDIT DOCUMENT AFFIRMING THE ACCURACY
OF THE INFORMATION PROVIDED THEREIN. AS REQUIRED BY SECTION ONE  HUNDRED
TWELVE  OF  THIS  ARTICLE,  EMPLOYERS SHALL MAKE AVAILABLE ALL BOOKS AND
RECORDS NECESSARY FOR THE PAYROLL  VERIFICATION  AUDIT  AND  PERMIT  THE
AUDITOR  TO  MAKE A PHYSICAL INSPECTION OF THE EMPLOYER'S OPERATION.  IF
AN EMPLOYER FAILS TO PROVIDE REASONABLE ACCESS TO  ALL  SUCH  BOOKS  AND
RECORDS NECESSARY FOR A PAYROLL VERIFICATION AUDIT, INCLUDING A PHYSICAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11025-03-3
              

A. 7921--A                          2

INSPECTION  OF THE EMPLOYER'S OPERATION, THE EMPLOYER SHALL PAY AN ADDI-
TIONAL PREMIUM TO THE CARRIER OF THREE TIMES THE MOST  RECENT  ESTIMATED
ANNUAL PREMIUM.
  (B)  IF  AN  EMPLOYER  KNOWINGLY  UNDERSTATES  OR  KNOWINGLY  CONCEALS
PAYROLL, KNOWINGLY MISREPRESENTS OR KNOWINGLY CONCEALS  EMPLOYEE  DUTIES
SO  AS TO AVOID PROPER CLASSIFICATION FOR PREMIUM CALCULATIONS, OR KNOW-
INGLY MISREPRESENTS OR KNOWINGLY CONCEALS INFORMATION PERTINENT  TO  THE
COMPUTATION AND APPLICATION OF AN EXPERIENCE RATING MODIFICATION FACTOR,
SAID KNOWING MISREPRESENTATIONS OR KNOWING CONCEALMENTS SHALL BE CONSID-
ERED  FRAUDULENT  PRACTICES  IN  VIOLATION  OF  APPLICABLE PROVISIONS OF
SECTION ONE HUNDRED FOURTEEN OF THIS  ARTICLE  AND  INSURANCE  FRAUD  IN
VIOLATION OF APPLICABLE PROVISIONS OF SECTION 176.05 OF THE PENAL LAW.
  (C)  IF DURING THE COURSE OF AN AUDIT CONDUCTED UNDER THIS SECTION, AN
INSURANCE CARRIER OBTAINS INFORMATION  INDICATING  A  VIOLATION  OF  THE
PROVISIONS  OF PARAGRAPH (B) OF THIS SUBDIVISION, THEN THE CARRIER SHALL
REPORT SUCH INFORMATION TO THE BOARD.
  2. THIS SECTION SHALL NOT  APPLY  TO  EMPLOYERS  THAT  SELF-INSURE  OR
EMPLOYERS THAT ARE MEMBERS OF A WORKERS' COMPENSATION GROUP SELF-INSURED
TRUST.
  3.  FOR  THE  PURPOSES OF THIS SECTION, "CONSTRUCTION CLASS" MEANS THE
WORK OR OCCUPATION DESCRIBED IN "GROUP 3" OF SUBDIVISION ONE OF  SECTION
THREE OF THIS CHAPTER.
  S 2. This act shall take effect immediately.