Study: N.Y. workers’ comp system is rife with employer cheating — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Study: N.Y. workers’ comp system is rife with employer cheating

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New York employers are cheating the state workers’ compensation system to the tune of $500 million to $1 billion a year, according to estimates in a Fiscal Policy Institute (FPI) study.

The figures are based on estimated illegal underpayments of 15 percent to 20 percent of annual premiums.

The study says employers cheat in two ways: 1) by not covering employees at all; and 2) by misclassifying them so as to pay lower premiums.

Noncompliance has contributed to inflated workers’ comp premiums and some of the lowest benefits in the country for injured New York workers, says James Parrot, FPI’s chief economist.

To access the complete report on the state of the New York workers’ comp system, go to (click on “New York State Workers’ Compensation: How Big Is the Coverage Shortfall?”).

Tip: Be aware that misclassifying employees or simply not purchasing workers’ comp insurance are criminal offenses, subjecting employers to potential fines and even imprisonment.  

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