Monday, August 4, 2014

We Don't Hire In New York

Today the check goes out in the mail to the New York State Workers' Compensation Board.

It's a half payment towards WorkCompCentral's fine for not having workers' compensation insurance on a New York state reporter for one hundred ten days.

We had a Human Resources consultant at the time who didn't get "compensation" arranged. The SWCB of course got wind through the tax reporting structure there and quickly fined WorkCompCentral pursuant to Labor Law 52(5).

This is the same issue that got various celebrities caught up in the workers' compensation mess so inscrutably reported by various gossip and celebrity news outlets, such as Jim CareyJay-Z or Al Franken.

As soon as the error was reported WorkCompCentral of course secured coverage retroactive to date of hire.
Bowzer's not hiring from NY again...
But that's not good enough for New York. It appears that the New York system is not intended to urge compliance and ensure coverage of employees, but rather is executed as a revenue generation source.

This is why. From the SWCB's website:

"Section 52 [5] of the Workers' Compensation Law provides that the Chair, upon finding that an employer has failed for a period of not less than ten consecutive days to make the provision for payment of compensation may impose upon such employer, in addition to all other penalties, fines or assessments, a penalty of up to $2,000 dollars for each ten day period of non-compliance or a sum not in excess of two times the cost of compensation for its payroll for the period of such failure, which sum shall be paid into the uninsured employers' fund."
Fortunately for WorkCompCentral, "the Chair" showed some leniency and fined the company only $500 per each 10 day period, so it's "only" a penalty of $5,500 total.

But the law also provides for discretion in "the Chair" and while there was some discretion exercised, it is still excessive in comparison to the alternative of "two times the cost of compensation for its payroll for the period of such failure...".

By my estimate, that's probably closer to $100.

Five thousand five hundred dollars versus one hundred dollars. That's a spread of fifty-five times.

Okay - in the grand scheme of things we're not talking about a whole lot of money, but $5,500 is a couple of full time employees in New York (or nearly any state), or if we're talking Manhattan, one REALLY good reporter.

And the real question is, what is the SWCB trying to accomplish? Do they want me to cover employees in that state? Do they want me to hire people in that state? Or are they trying to fill the coffers?

Because if WorkCompCentral had been fined "two times the cost of compensation for its payroll for the period of such failure" the money goes into the uninsured employer's fund.

But if the discretion is otherwise it appears that the penalty payment is directed to the Board itself.

Business complains all the time about workers' compensation. I understand why - the law is applied and enforced unreasonably.

While most of the time we focus on claims, and how it seems illogical that even an iota of causation brings work comp into the mix, it is equally maddening to the business owner when policies meant to ensure compliance are used instead to punish otherwise conforming employers.

It's not the cost of workers' compensation that drives business away from a state - it's the unreasonable implementation and enforcement of the law and policies that do.

Since this whole fiasco started and has played out, our New York reporter has given notice so that he can take care of his ailing parents.

WorkCompCentral is hiring - but we're not interested in anyone within the state of New York.

1 comment:

  1. There are several "user terrorist" states out there, David. You found one.