Relates to the establishment of a fraud assessment commission, an assessment for workers' compensation fraud investigations and the workers' compensation fraud investigation fund, the official text

S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7950--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 14, 2025
                                ___________
 
 Introduced  by  Sen.  BAILEY -- read twice and ordered printed, and when
   printed to be  committed  to  the  Committee  on  Labor  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the workers' compensation law, in relation to establish-
   ing  a  fraud  assessment  commission  and  an assessment for workers'
   compensation fraud investigations; and to amend the state finance law,
   in relation to establishing the workers' compensation  fraud  investi-
   gation fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative  intent.  The  legislature  hereby  finds  that
 construction  employers shave a significant amount off their labor costs
 through workers' compensation premium fraud.  They  do  that  by  taking
 advantage of workers' compensation insurer practices that enable fraud.
   Employer  workers'  compensation  premium fraud is costing insurers $5
 billion a year and it's costing law-abiding employers and their  employ-
 ees  jobs.  The Century Foundation hired economists to study and write a
 report on fraud in the U.S. construction industry that has detailed  the
 impacts of these practices extensively; 10 to 19 percent of construction
 workers  who  should  be treated as employees are not. That's 1.1 to 2.1
 million workers, ultimately resulting in $10 billion or more  in  unpaid
 federal and state taxes.
   The  legislature  finds  that  New York state must generate additional
 resources to ensure  that  the  workers'  compensation  fraud  inspector
 general  and  local prosecutors have the resources available to investi-
 gate and prosecute employer workers' compensation fraud cases and  cases
 relating  to  the  willful  failure  to  secure  the payment of workers'
 compensation. This will help combat broader rampant wage theft  through-
 out the construction industry.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11529-05-5
 S. 7950--A                          2
 
   §  2.  The  workers'  compensation  law  is  amended by adding two new
 sections 151-a and 151-b to read as follows:
   §  151-A.  FRAUD  ASSESSMENT COMMISSION. THERE IS HEREBY ESTABLISHED A
 FRAUD  ASSESSMENT  COMMISSION,  WHICH  SHALL  CONSIST  OF  TEN   MEMBERS
 APPOINTED  BY  THE  GOVERNOR  AS FOLLOWS: THREE MEMBERS FROM A BONA FIDE
 LABOR ORGANIZATION, TWO MEMBERS FROM SELF-INSURED EMPLOYERS, TWO MEMBERS
 FROM INSURED EMPLOYERS, TWO MEMBERS  FROM  INSURERS,  AND  ONE  CLAIMANT
 ATTORNEY.  THE  TERM  OF  OFFICE SHALL BE FOUR YEARS, AND A MEMBER SHALL
 HOLD OFFICE UNTIL THE APPOINTMENT OF A SUCCESSOR. THE CHAIR OF THE WORK-
 ERS' COMPENSATION BOARD, THE COMMISSIONER OF LABOR,  AND  THE  INSPECTOR
 GENERAL SHALL BE EX OFFICIO VOTING MEMBERS OF THE COMMISSION.
   § 151-B. ASSESSMENT FOR WORKERS' COMPENSATION FRAUD INVESTIGATIONS. TO
 FUND  THE  INVESTIGATION AND PROSECUTION OF WORKERS' COMPENSATION FRAUD,
 WILLFUL FAILURE TO SECURE PAYMENT OF  WORKERS'  COMPENSATION  PUNISHABLE
 UNDER  SECTION  FIFTY-TWO  OF THIS CHAPTER, AND FAILURE TO KEEP TRUE AND
 ACCURATE RECORDS AS REQUIRED UNDER SECTION  ONE  HUNDRED  THIRTY-ONE  OF
 THIS CHAPTER, THE CHAIR OF THE WORKERS' COMPENSATION BOARD, IN CONSULTA-
 TION  WITH  THE  WORKERS'  COMPENSATION  FRAUD INSPECTOR GENERAL AND THE
 FRAUD ASSESSMENT COMMISSION SHALL ESTABLISH, BY THE FIRST DAY OF  NOVEM-
 BER,  TWO  THOUSAND  TWENTY-FIVE, AND ANNUALLY THEREAFTER, AN ASSESSMENT
 FOR WORKERS' COMPENSATION FRAUD INVESTIGATIONS WHICH SHALL BE  BORNE  BY
 AFFECTED EMPLOYERS SECURING COMPENSATION FOR THEIR EMPLOYEES PURSUANT TO
 SECTION  FIFTY OF THIS CHAPTER. THE ASSESSMENT FOR WORKERS' COMPENSATION
 FRAUD INVESTIGATIONS SHALL BE IN  ADDITION  TO  ASSESSMENTS  FOR  ANNUAL
 EXPENSES  ESTABLISHED  IN SECTION ONE HUNDRED FIFTY-ONE OF THIS ARTICLE.
 ALL ASSESSMENTS COLLECTED PURSUANT TO THIS SECTION SHALL BE CREDITED  TO
 THE  WORKERS'  COMPENSATION FRAUD INVESTIGATION FUND UNDER SECTION NINE-
 TY-NINE-TT OF THE STATE FINANCE LAW AND SHALL BE AVAILABLE FOR THE  USES
 AND PURPOSES OF SUCH FUND.
   § 3. The state finance law is amended by adding a new section 99-tt to
 read as follows:
   §  99-TT.  WORKERS' COMPENSATION FRAUD INVESTIGATION FUND. 1. THERE IS
 HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE  CHAIR  OF  THE  WORKERS'
 COMPENSATION  BOARD,  THE  COMMISSIONER  OF LABOR, AND THE COMPTROLLER A
 SPECIAL FUND TO BE KNOWN AS THE "WORKERS'  COMPENSATION  FRAUD  INVESTI-
 GATION FUND".
   2.  SUCH  FUND SHALL CONSIST OF MONIES RECEIVED FROM THE IMPOSITION OF
 THE ASSESSMENT FOR WORKERS' COMPENSATION FRAUD  INVESTIGATIONS  PURSUANT
 TO SECTION ONE HUNDRED FIFTY-ONE-B OF THE WORKERS' COMPENSATION LAW, AND
 ALL OTHER MONIES APPROPRIATED, CREDITED, OR TRANSFERRED THERETO FROM ANY
 OTHER FUND OR SOURCE PURSUANT TO LAW.
   3.  MONIES  IN THE FUND, PURSUANT TO APPROPRIATION BY THE LEGISLATURE,
 ISSUANCE OF A CERTIFICATE OF AVAILABILITY BY THE DIRECTOR OF THE BUDGET,
 AND A DETERMINATION BY THE CHAIR OF THE WORKERS' COMPENSATION  BOARD  IN
 CONSULTATION  WITH THE INSPECTOR GENERAL, WITH THE ADVICE AND CONSENT OF
 THE FRAUD ASSESSMENT COMMISSION AS TO THE MOST EFFECTIVE DISTRIBUTION OF
 MONIES, MAY BE MADE AVAILABLE FOR  PURPOSES  OF  THE  INVESTIGATION  AND
 PROSECUTION  OF EMPLOYER WORKERS' COMPENSATION FRAUD CASES, CASES RELAT-
 ING TO THE WILLFUL FAILURE TO SECURE THE  PAYMENT  OF  WORKERS'  COMPEN-
 SATION,  AND  CASES  RELATING  TO  THE FAILURE TO KEEP TRUE AND ACCURATE
 RECORDS.
   4. AT LEAST FIFTY PERCENT OF THE WORKERS' COMPENSATION FRAUD  INVESTI-
 GATION FUND ESTABLISHED PURSUANT TO THIS SECTION SHALL BE DISTRIBUTED TO
 DISTRICT  ATTORNEYS FOR PURPOSES OF THE INVESTIGATION AND PROSECUTION OF
 WORKERS' COMPENSATION FRAUD CASES, CASES RELATING TO THE WILLFUL FAILURE
 TO SECURE THE PAYMENT OF WORKERS' COMPENSATION, AND  CASES  RELATING  TO
 S. 7950--A                          3
 
 THE FAILURE TO KEEP TRUE AND ACCURATE RECORDS. IF A DISTRICT ATTORNEY IS
 DETERMINED  BY  THE  CHAIR  OF  THE  WORKERS'  COMPENSATION BOARD OR THE
 INSPECTOR GENERAL TO BE UNWILLING OR UNABLE TO INVESTIGATE AND PROSECUTE
 WORKERS' COMPENSATION FRAUD CLAIMS, CLAIMS RELATING TO THE WILLFUL FAIL-
 URE  TO  SECURE THE PAYMENT OF WORKERS' COMPENSATION, OR CLAIMS RELATING
 TO THE FAILURE TO KEEP TRUE AND ACCURATE RECORDS,  THE  COMMISSIONER  OF
 LABOR  SHALL DISCONTINUE DISTRIBUTION OF FUNDS ALLOCATED FOR SUCH COUNTY
 AND MAY REDISTRIBUTE SUCH FUNDS ACCORDING TO THIS SECTION.
   5. MONIES SHALL BE PAYABLE FROM THE FUND ON THE AUDIT AND  WARRANT  OF
 THE  COMPTROLLER  ON VOUCHERS APPROVED AND CERTIFIED BY THE COMMISSIONER
 OF LABOR.
   6. MONIES IN THE WORKERS' COMPENSATION FRAUD INVESTIGATION FUND  SHALL
 BE  KEPT  SEPARATE  AND SHALL NOT BE COMMINGLED WITH ANY OTHER MONIES IN
 THE CUSTODY OF THE CHAIR OF THE WORKERS' COMPENSATION BOARD, THE COMMIS-
 SIONER OF LABOR AND/OR THE COMPTROLLER.
   7. TO THE EXTENT PRACTICABLE, THE COMMISSIONER OF LABOR  SHALL  ENSURE
 THAT  ALL MONIES RECEIVED DURING A FISCAL YEAR ARE EXPENDED PRIOR TO THE
 END OF SUCH FISCAL YEAR.
   8. BY THE THIRTIETH DAY OF JUNE, TWO THOUSAND TWENTY-FIVE, AND ANNUAL-
 LY THEREAFTER, THE CHAIR OF THE WORKERS' COMPENSATION BOARD, IN  CONSUL-
 TATION  WITH  THE  WORKERS'  COMPENSATION FRAUD INSPECTOR GENERAL OR THE
 FRAUD ASSESSMENT COMMISSION, SHALL DEVELOP AND  RELEASE  A  REQUEST  FOR
 PROPOSALS  AND  APPLICATION  PROCESS  FOR  THE  FUNDS  OUTLINED  IN THIS
 SECTION.
   9. THE FRAUD ASSESSMENT COMMISSION SHALL PROVIDE QUARTERLY REPORTS  TO
 THE  SPEAKER OF THE ASSEMBLY, THE TEMPORARY PRESIDENT OF THE SENATE, THE
 CHAIR OF THE SENATE FINANCE COMMITTEE AND THE CHAIR OF THE ASSEMBLY WAYS
 AND MEANS COMMITTEE, ON THE RECEIPTS AND DISTRIBUTIONS OF  THE  WORKERS'
 COMPENSATION  INVESTIGATION  FUND,  INCLUDING  AN  ITEMIZATION  OF  SUCH
 RECEIPTS AND DISBURSEMENTS, THE HISTORICAL AND  PROJECTED  EXPENDITURES,
 AND THE PROJECTED FUND BALANCE.
   § 4. This act shall take effect immediately.