A fiscal group's finding that New York employers have evaded up to $1 billion a year in workers' compensation premiums has been attacked by an insurance carrier group as false and inaccurate.
At issue is a report by the non-partisan Latham, N.Y.-based Fiscal Policy Institute, which said that a growing number of workers are "misclassified by their employers as independent contractors in an attempt to evade employer responsibility for payroll taxes and social insurance programs."
The study concluded that New York government has failed to do its job in policing the labor market and employer labor practices.
Harsh criticism of the report was voiced by Monte Almer, president of the New York Compensation Insurance Rating Board, who mentioned in a five-page response that if coverage is lacking for a worker who files a claim, it is paid by the Uninsured Employers fund.
FPI's findings have arrived as negotiations are underway at the state capital in Albany to develop reform legislation for the state's comp system.
Mr. Almer, without further elaboration, said his group has responded to questions from the governor's office by providing price information. Discussions concerning reforms of the comp system currently involve the office of Gov. Eliot Spitzer, the AFL-CIO and the New York State Business Council.
In its report, FPI cited former State Insurance Superintendent Howard Mills. It noted that last year, when he rejected a CIRB request for a comp rate increase, he called insurer efforts to fight claimant and employer fraud "anemic," and said comp insurers needed to make a greater commitment to justify a rate increase.
The report said the CIRB mainly uses phone interviews to conduct spot payroll audits, but Mr. Almer said today, "We do actual audits." He also noted that carriers are supposed to do test audits.
There is more oversight than FPI thinks, he said. Regarding employer misclassification of workers, he noted that sometimes businesses put workers in a riskier classification than they should be. Most misclassifications, according to Mr. Almer, "are just mistakes."
Mr. Almer rejected the notion that his group could use more help in policing the system. "We think we do a pretty good job of it," he said.
His written response noted that the insurance department conducts an examination of the board's operations and procedures, which includes a review of the data-handling processes that are being used.
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