Friday, August 8, 2008

Jail-Time For Workers' Compensation Violation

Jail Given how few real remedies there are for labor and employment law violations, I take a bit of guilty pleasure when company officials push their luck so far that they end up in jail.  This example is from New York, which has a recent law that makes it a felony to fail to get workers' compensation coverage (although their is an affirmative defense if an employer to reasonable steps to obtain coverage).  The story from BNA (subscription required):

The owner of a New York City nursing home has been arrested on felony charges of failing to secure workers' compensation insurance, New York Attorney General Andrew M. Cuomo (D) announced Aug. 7. According to Cuomo, defendant Helen Sieger, president and chief executive officer of the Kingsbridge Heights Rehabilitation and Care Center in the Bronx, is the first employer to be arrested under a 2007 state workers' compensation reform law that, among other things, made it a felony for employers to fail to secure the coverage. Under prior law, the crime was a misdemeanor, Cuomo said.

Sieger was charged with failing to secure coverage for more than 400 workers at the facility, from May 2007 through June 26. On June 19, the state Workers' Compensation Board issued a stop-work order, due to take effect June 30, based on Sieger's failure to obtain insurance. The order would have brought the immediate closing of the nursing home and emergency removal of the patients. Although Sieger obtained coverage June 27, she still faces charges for the period in which coverage had lapsed, according to Cuomo. . . .

 The 300-bed facility has been mired in a multi-year labor dispute with 1199 SEIU United Health Care Workers East, the New York City-based Service Employees International Union local. The local began an unfair labor practices strike against Kingsbridge Feb. 20, claiming that the facility had failed to make benefit fund payments, conducted surveillance of union members, and failed to abide by a contract agreement. . . .

In March, 1199 President George Gresham called for an investigation by Cuomo's office into allegations that Sieger had misappropriated state funds and violated the state charities law.

Yet another example of a way in which unions can exert pressure outside the NLRA framework.

Hat Tip:  Dennis Walsh


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