On February 13, 2014, we reported on WCM’s victory in New York Hospital Medical Center of Queens v. Microtech Contracting Corp. , in which the Court of Appeals ruled that hiring undocumented workers (a violation of federal law) does not abrogate the protections afforded to employers under § 11 of the Workers Compensation Law. We argued – – and New York’s top court agreed – – that the judiciary had no power to create a new exception to WCL §11 for “illegal” employment contracts.
But it now appears that the Manhattan D.A. is investigating Workers’ Comp fraud and, in particular, the practice of hiring undocumented workers “off-the-books.” Manhattan D.A. Cyrus Vance launched a grand jury investigation into Workers Compensation abuses. The grand jury’s report cites a 2013 study by the Fiscal Policy Institute estimating that New York State and the City lost over $400 million in 2011, resulting from construction laborers being paid off the books or falsely labeled as “independent contractors.” The report recommends legislation to increase fines and impose other sanctions for attempts by employers to shortcut the system.
It‘s too early to tell what impact Vance’s grand jury report will have on the legislature. But watch this space! If you have any questions about Workers Compensation Law §11 or the grand jury’s report please contact Dennis Wade at email@example.com.