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

                                 3512--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 11, 2015
                               ___________

Introduced  by  Sens.  SEWARD, AVELLA -- read twice and ordered printed,
  and when printed to be committed to the Committee on Labor  --  recom-
  mitted  to  the  Committee  on Labor in accordance with Senate Rule 6,
  sec. 8 -- 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06342-04-6
              

S. 3512--A                          2

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
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.