S T A T E   O F   N E W   Y O R K
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                                    38
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 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  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.
                                                            LBD01877-01-9

 A. 38                               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.
   § 2. This act shall take effect immediately.