Uninsured construction workers may still have legal claims in New York

New York prosecutors and state officials are stepping up enforcement against employers that skip workers’ compensation coverage, while a New York injury firm is reminding injured construction workers that uninsured status does not necessarily end a claim. The advisory points to state laws that can open the door to benefits, lawsuits, or recovery from contractors above the direct employer.

Why it matters: - Injured construction workers on uninsured jobsites may still have legal remedies beyond a denied workers’ compensation claim. - New York is increasing pressure on contractors that fail to carry coverage, which can affect who pays when workers are hurt. - The rules can shift liability to contractors, property owners, the Uninsured Employers Fund, or the employer’s principals.

What happened: - New York’s fiscal year 2027 budget creates a $7 million grant program to staff workers’ compensation fraud units in district attorney offices, funded through employer assessments. - Nassau County prosecutors charged four contractors seeking home improvement licenses with failing to secure workers’ compensation coverage on Sept. 2. - Suffolk County prosecutors announced felony charges on Sept. 10 against a Patchogue asbestos removal company accused of reporting a $50,000 payroll when investigators found $354,112. - Gorayeb & Associates, P.C. issued an advisory to construction workers who may believe an uninsured employer means they have no case.

The details: - Section 11 of New York’s Workers’ Compensation Law lets an injured worker either claim benefits or sue the employer for damages. - In that lawsuit, the employer cannot argue that the worker was careless, that a coworker caused the injury, or that the worker accepted the risks of the job. - Section 56 makes the contractor that hired an uninsured subcontractor on hazardous work liable for the injured worker’s compensation. - Unpaid claims can be covered by the Uninsured Employers Fund, which the Workers’ Compensation Board finances in part with penalties collected from employers that skipped coverage. - Penalties can reach $2,000 for every 10 days without coverage. - The Workers’ Compensation Board can order a business shut down immediately. - For employers with more than five workers, failure to carry coverage is a felony punishable by fines of $5,000 to $50,000. - A company’s president, secretary and treasurer are personally liable. - Labor Law Section 240 holds property owners and general contractors liable for gravity-related injuries when proper safety devices were not provided. - Labor Law Section 241(6) requires property owners and general contractors to follow specific Industrial Code safety rules. - Those duties do not depend on which subcontractor issued the paycheck or whether that subcontractor had insurance. - The firm said it has recovered more than $2 billion for more than 12,000 injured workers and their families. - Gorayeb & Associates says it was founded in 1986 and provides bilingual representation in English and Spanish throughout New York City and New York State. - More information is available at the firm’s website.

Between the lines: - The advisory is aimed at workers who may assume an uninsured employer leaves them without recourse. - The enforcement actions show state and county officials are treating workers’ compensation fraud as both a labor issue and a criminal matter. - Construction cases can involve multiple responsible parties, so the direct employer is not always the only source of recovery. - The practical message is to preserve evidence early, because permit records, jobsite signage and pay records can identify higher-level contractors and insurers.

What’s next: - More enforcement actions are likely as New York funds dedicated fraud units and local prosecutors pursue uninsured employers. - Injured workers on uninsured sites may continue to use workers’ compensation claims, civil lawsuits and Labor Law claims depending on the facts. - The advisory urges workers to document permits, fencing signs, pay stubs, texts from foremen and cash payments before contacting counsel.

The bottom line: - In New York, an uninsured contractor does not necessarily mean an injured construction worker has no path to recovery.