S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7330--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                               May 6, 2015
                               ___________

Introduced by M. of A. CAHILL -- read once and referred to the Committee
  on  Labor  -- recommitted to the Committee on Labor in accordance with
  Assembly Rule 3, sec. 2 -- 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 MAY  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 OF
ALL EMPLOYERS SHALL BE CONDUCTED NO MORE THAN ONE  HUNDRED  TWENTY  DAYS
AFTER THE EXPIRATION OF A POLICY PERIOD.  AT THE COMPLETION OF AN AUDIT,
IF  REQUESTED BY THE AUDITOR, THE EMPLOYER OR OFFICER OF THE CORPORATION
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06342-03-6
              

A. 7330--A                          2

RECORDS NECESSARY FOR A PAYROLL VERIFICATION AUDIT, INCLUDING A PHYSICAL
INSPECTION OF  THE  EMPLOYER'S  OPERATION,  THE  EMPLOYER  SHALL  PAY  A
SURCHARGE  TO  THE CARRIER OF TWO TIMES THE MOST RECENT ESTIMATED ANNUAL
PREMIUM.
  (B)  EMPLOYERS  THAT  FAIL TO PROVIDE REASONABLE ACCESS TO THE CARRIER
FOR THE PURPOSE OF CONDUCTING AN AUDIT SHALL BE REPORTED TO THE NEW YORK
COMPENSATION INSURANCE RATING BOARD.
  (C)  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.
  (D) IF DURING THE COURSE OF AN AUDIT CONDUCTED UNDER THIS SECTION,  AN
INSURANCE  CARRIER  OBTAINS  INFORMATION  INDICATING  A VIOLATION OF THE
PROVISIONS OF PARAGRAPH (C) 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 January 1, 2017.