In Matter of Castillo v Brown, 2017 N.Y. App. Div. LEXIS 4839 (June 15, 2017), a New York appellate court affirmed the imposition of an $86,000 penalty against a husband and wife who employed a live-in domestic to perform housekeeping and child care duties, but failed to maintain workers’ compensation insurance. The worker cut her hand on a broken piece of glass while washing dishes. Following hearings before a WCLJ, the worker’s case was established and she was awarded benefits. In addition, the WCLJ assessed a penalty of $86,000, pursuant to N.Y. Work. Comp. Law § 26-a(2)(b).
The WCLJ assessed a penalty of $1,000 for each 10-day period of non-compliance (calculated by multiplying $1,000 by 86, the number of 10-day increments within the period of December 31, 2009 to May 18, 2012. On appeal, the employers contended that the penalty should have been computed utilizing an “alternative” method allowed under the statute, which would have provided for penalty “not in excess of two times the amount of the cost of compensation for its payroll for the period of such failure” [N.Y. Work. Comp. Law § 26-a(2)(b)]. Under that formula, the penalty would have been approximately $3,000.
The appellate court observed that the employers had not raised the argument as to the alternate method of computing the penalty before the WCLJ. Nor did they present any testimony or other proof with respect to the duration and circumstances of the domestic worker’s employment or the reason for their failure to obtain workers’ compensation coverage. The Board reviewed the propriety of the penalty based on the meager record before it, finding the $86,000 penalty appropriate. The employers had presented nothing that would convince the appellate court that warranted reconsideration and/or full Board review.