S 7950: Establishes a fraud assessment commission; directs the chair of the workers' compensation board, in consultation with the workers' compensation fraud inspector general and the fraud assessment commission, to establish an assessment for workers' compensation fraud investigations to fund the investigation and prosecution of workers' compensation fraud, willful failure to secure payment of workers' compensation, and failure to keep true and accurate records; establishes the workers' compensation fraud investigation fund in the joint custody of the chair of the workers' compensation board, the commissioner of labor, and the comptroller, which shall consist of monies received from the imposition of the assessment for workers' compensation fraud investigations.

  
  STATE OF NEW YORK ________________________________________________________________________ 7950 2025-2026 Regular Sessions  IN SENATE May 14, 2025 ___________ Introduced by Sen. BAILEY -- read twice and ordered printed, and when printed to be committed to the Committee on Labor 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: 1 Section 1. Legislative intent. The legislature hereby finds that 2 construction employers shave a significant amount off their labor costs 3 through workers' compensation premium fraud. They do that by taking 4 advantage of workers' compensation insurer practices that enable fraud. 5 Employer workers' compensation premium fraud is costing insurers $5 6 billion a year and it's costing law-abiding employers and their employ- 7 ees jobs. The Century Foundation hired economists to study and write a 8 report on fraud in the U.S. construction industry that has detailed the 9 impacts of these practices extensively; 10 to 19 percent of construction 10 workers who should be treated as employees are not. That's 1.1 to 2.1 11 million workers, ultimately resulting in $10 billion or more in unpaid 12 federal and state taxes. 13 The legislature finds that New York state must generate additional 14 resources to ensure that the workers' compensation fraud inspector 15 general and local prosecutors have the resources available to investi- 16 gate and prosecute workers' compensation fraud cases and cases relating 17 to the willful failure to secure the payment of workers' compensation. 18 This will help combat broader rampant wage theft throughout the 19 construction industry. 20 § 2. The workers' compensation law is amended by adding two new 21 sections 151-a and 151-b to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11529-02-5 
 S. 7950 2 1 § 151-a. Fraud assessment commission. There is hereby established a 2 fraud assessment commission, which shall consist of nine members 3 appointed by the governor as follows: three members from a bona fide 4 labor organization, two members from self-insured employers, two members 5 from insured employers, and two members from insurers. The term of 6 office shall be four years, and a member shall hold office until the 7 appointment of a successor. The chair of the workers' compensation 8 board, the commissioner of labor, and the workers' compensation fraud 9 inspector general shall be ex officio voting members of the commission. 10 § 151-b. Assessment for workers' compensation fraud investigations. To 11 fund the investigation and prosecution of workers' compensation fraud, 12 willful failure to secure payment of workers' compensation punishable 13 under section fifty-two of this chapter, and failure to keep true and 14 accurate records as required under section one hundred thirty-one of 15 this chapter, the chair of the workers' compensation board, in consulta- 16 tion with the workers' compensation fraud inspector general and the 17 fraud assessment commission shall establish, by the first day of Novem- 18 ber, two thousand twenty-five, and annually thereafter, an assessment 19 for workers' compensation fraud investigations which shall be borne by 20 affected employers securing compensation for their employees pursuant to 21 section fifty of this chapter. The assessment for workers' compensation 22 fraud investigations shall be in addition to assessments for annual 23 expenses established in section one hundred fifty-one of this article. 24 All assessments collected pursuant to this section shall be credited to 25 the workers' compensation fraud investigation fund under section nine- 26 ty-nine-tt of the state finance law and shall be available for the uses 27 and purposes of such fund. 28 § 3. The state finance law is amended by adding a new section 99-tt to 29 read as follows: 30 § 99-tt. Workers' compensation fraud investigation fund. 1. There is 31 hereby established in the joint custody of the chair of the workers' 32 compensation board, the commissioner of labor, and the comptroller a 33 special fund to be known as the "workers' compensation fraud investi- 34 gation fund". 35 2. Such fund shall consist of monies received from the imposition of 36 the assessment for workers' compensation fraud investigations pursuant 37 to section one hundred fifty-one-b of the workers' compensation law, and 38 all other monies appropriated, credited, or transferred thereto from any 39 other fund or source pursuant to law. 40 3. Monies in the fund, pursuant to appropriation by the legislature, 41 issuance of a certificate of availability by the director of the budget, 42 and a determination by the chair of the workers' compensation board in 43 consultation with the workers' compensation fraud inspector general, 44 with the advice and consent of the fraud assessment commission as to the 45 most effective distribution of monies, may be made available for 46 purposes of the investigation and prosecution of workers' compensation 47 fraud cases, cases relating to the willful failure to secure the payment 48 of workers' compensation, and cases relating to the failure to keep true 49 and accurate records. 50 4. At least fifty percent of the workers' compensation fraud investi- 51 gation fund established pursuant to this section shall be distributed to 52 district attorneys for purposes of the investigation and prosecution of 53 workers' compensation fraud cases, cases relating to the willful failure 54 to secure the payment of workers' compensation, and cases relating to 55 the failure to keep true and accurate records. If a district attorney is 56 determined by the chair of the workers' compensation board or the work- 
 S. 7950 3 1 ers' compensation fraud inspector general to be unwilling or unable to 2 investigate and prosecute workers' compensation fraud claims, claims 3 relating to the willful failure to secure the payment of workers' 4 compensation, or claims relating to the failure to keep true and accu- 5 rate records, the commissioner of labor shall discontinue distribution 6 of funds allocated for such county and may redistribute such funds 7 according to this section. 8 5. Monies shall be payable from the fund on the audit and warrant of 9 the comptroller on vouchers approved and certified by the commissioner 10 of labor. 11 6. Monies in the workers' compensation fraud investigation fund shall 12 be kept separate and shall not be commingled with any other monies in 13 the custody of the chair of the workers' compensation board, the commis- 14 sioner of labor and/or the comptroller. 15 7. To the extent practicable, the commissioner of labor shall ensure 16 that all monies received during a fiscal year are expended prior to the 17 end of such fiscal year. 18 8. By the thirtieth day of June, two thousand twenty-five, and annual- 19 ly thereafter, the chair of the workers' compensation board, in consul- 20 tation with the workers' compensation fraud inspector general or the 21 fraud assessment commission, shall develop and release a request for 22 proposals and application process for the funds outlined in this 23 section. 24 9. The fraud assessment commission shall provide quarterly reports to 25 the speaker of the assembly, the temporary president of the senate, the 26 chair of the senate finance committee and the chair of the assembly ways 27 and means committee, on the receipts and distributions of the workers' 28 compensation investigation fund, including an itemization of such 29 receipts and disbursements, the historical and projected expenditures, 30 and the projected fund balance. 31 § 4. This act shall take effect immediately.