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July 11, 2014
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Employing off the books; the art of getting around workers’ comp


Murtagh told the lawmakers that according to the results of Freedom of Information Law requests in a couple of municipalities, 66% of permits were issued without any of the three types of documentation. And among contractors who do supply documents, according to various sources, the letters of exemption—which are intended to go only to people working alone, with no employees and no subcontractors—are being widely abused. There are reportedly many instances of people using letters of exemption to get permits to build a house and, as a general rule, no one today builds a house all by himself or herself.

In exchanges with the CIB, code enforcement officers said that they did not have the time or the resources to enforce the various state laws. Neil Gilberg, who was formerly the Sullivan County Clerk and who is now a business advocate with the NYS Workers’ Compensation Board, created a pilot program whereby if a CEO suspects that a contractor is operating without workers’ compensation, the CEO can call or email officials in Albany or Binghamton, who will respond by sending someone to investigate, or perhaps by getting a local law enforcement official to investigate.

However, not everyone agrees that the CEOs should be put in a position of having to enforce the law. Suggesting that CEOs should be reluctant to issue permits based on exemption letters by contractors who claim to have no employees is reasonable, said Catskill Farms builder Charles Petersheim, but, he added, “giving them police powers? It just seems really hard to believe that it could work.”

According to various sources, the prevailing view among CEOs is that enforcing the relevant state laws is not their responsibility.

For homeowners, there is a question of compensation. If, for example, an employee without workers’ compensation were to fall off a roof, the employer is responsible for the hospital bills. But, if the employer doesn’t have enough money to cover it, the worker may go after the homeowner.

Residents can determine whether a contractor is covered by workers’ compensation by going to www.wcb.state.ny.us and clicking on Insurance Carriers, and then clicking on “Does Employer Have Coverage,” and following the prompts.