S T A T E   O F   N E W   Y O R K
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                                   7473
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 26, 2017
                                ___________
 
 Introduced by M. of A. CAHILL -- read once and referred to the Committee
   on Labor
 
 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:
   § 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
 RECORDS NECESSARY FOR A PAYROLL VERIFICATION AUDIT, INCLUDING A PHYSICAL
 INSPECTION  OF  THE  EMPLOYER'S  OPERATION,  THE  EMPLOYER  SHALL  PAY A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD04820-02-7

 A. 7473                             2
 
 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.
   § 2. This act shall take effect January 1, 2018.