As part of the recently-passed State Budget, the Governor and the Legislature agreed to charge New York employers $20 million and to use that money to establish workers’ compensation fraud units in every District Attorney’s office. The next question is: what will the D.A.s do with the money?

In 2023, Manhattan District Attorney Alvin Bragg announced that over a three-year period his office had secured 21 convictions of employers who engaged in workers’ compensation fraud, resulting in over $17 million in reimbursement to the New York State Insurance Fund. These employers cheated the system by filing false payrolls, tax returns, and other documents in order to improperly reduce their workers’ compensation premiums. 

Between 2022 and 2025, the Workers’ Compensation Inspector General for Fraud also reported twenty-six arrests and prosecutions of employers for similar conduct, again resulting in millions of dollars of restitution.

It is clear that the employer fraud found by the Manhattan D.A. and the Inspector General is just the tip of the iceberg. It is also clear that the amount of money insurance companies and law-abiding employers are cheated out of by fraudulent employers is potentially enormous – it may well be hundreds of millions of dollars. We hope that District Attorneys will use their new resources to “follow the money” and crack down on employers who provide fraudulent payroll information, improperly misclassify their workers, and otherwise defraud the system. There is no question that this should be the priority for D.A.s who access the new funds.