The New York Workers’ Compensation Board has had the power to issue stop-work orders – now New jersey is drafting a rule to grant this power to the Director of the Division of Workers’ Compensation.
The ‘reform’ legislation passed in October 2008 laid the groundwork for this new power. Specifically, Section 79 of the Act allowed the Division of Workers’ Compensation the authority to issue proposed rules describing how the power to ‘stop work’ would be restrained and authorized.
The proposed rules allow for a stop-work order to be issued if the employer ‘knowingly’ violates the Workers’ Compensation Act. The stop-work provision appears to allow the issuance of the order in the following circumstances:
Where the employer had workers’ comp insurance but allowed the insurance to lapse or cancelled coverage;
Where the employer was told by the Division of Workers’ Compensation or another State agency of the need to obtain workers’ comp coverage;
Where the employer had prior instances of failing to insure;
Where the employer misrepresents the number or type of employees in order to reduce premium costs;
where the employer misrepresents thew work classifications of employees to reduce premium costs.
The stop-work order is to be issued to the particular work-site where the infraction occurred. It is not known (not set out in the proposed rules) whether or not there actually has to be a workplace injury for the Division of Workers’ Compensation to issue a stop-work order. In other words, it is unknown whether this proposed rule is meant to increase compliance with the laws regarding mandatory workers’ compensation coverage or if this proposed rule will merely become another arrow in the quiver of union forces and disgruntled employees.
New York allowed its Workers’ Comp Board the power to issue stop-work orders in May 2007. Since that time more than 1,000 stop-work orders have been issued and approximately $7 Million in penalties have been issued to New York employers.
