Dustin W. Osborne, a partner of Goldberg Segalla’s Workers’ Compensation group, recently wrote to CLM Magazine, providing exploration into professional employer organizations (PEOs) and how they intersect in the world of workers’ compensation. PEOs are typically used for human resources services and act as a co-employer with a business. Among the services are workers’ compensation insurance. This leads to the question Dustin explores within the article in regards to New York State – “The biggest question being, from which employer do [employees] seek benefits?”
“Typically, in places like New York, there is a client leasing agreement between the PEO and underlying company, establishing how the underlying company can properly lease the employee,” explained Dustin. “Where things get murky, then, is in claims where the injured worker is not covered by the leasing agreement and, accordingly, not covered by the PEO’s insurance policy. Pursuant to the Employers’ Handbook issued by the New York State Workers’ Compensation Board, if the underlying company hires any non-leased employees…the underlying company must purchase a separate workers’ compensation policy to cover the employees not leased on their contract with the PEO.”
However, Dustin further writes that state’s Workers’ Compensation Board “consistently found the PEO and its insurance carrier responsible, regardless of the employee’s leased/unleased status.” This could put a financial strain on PEOs long term, making them financially infeasible.
Dustin explains progress made in this space that could provide hope for PEOs. “Fortunately, it appears New York has finally constructed a path allowing for the proper application of a PEO’s coverage. In 2021, the Third Department ultimately affirmed multiple cases in which the claimant was unleased, the underlying employer had no workers’ compensation coverage, and the PEO and its carrier were found responsible for covering the claimant.”
“Of the (PEO)ple, by the (PEO)ple, for the (PEO)ple,”CLM Magazine, March 28, 2022
Dustin W. Osborne’s practice focuses on the defense of complex workers’ compensation claims. In representing clients in all types of workers’ compensation litigation, Dustin handles matters from their inception through resolution, and, if necessary, on appeal. In addition, as a member of the firm’s New York Workers’ Compensation Subrogation team, Dustin assists employers and insurance carriers in navigating all issues pertaining to compensation liens and subrogation, including calculating and protecting liens, responding to requests for lien compromises, and obtaining lien recoveries for clients. His background also includes commercial litigation, and he is an emerging authority in sports and entertainment law.