Navigating New York’s workers' compensation insurance requirements

Workers’ compensation protects both employers and employees

Simply put, purchasing workers’ compensation insurance is a win-win for both employers and employees. Workers’ compensation insurance allows employees injured on the job to obtain no-cost medical care for their injuries and provides wage benefits should an employee be unable to return to work. But workers’ compensation also protects employers from costly legal bills should they be sued by their injured employee.

Next, we will go over which employees in New York are required to carry workers’ compensation insurance.

What are the requirements for workers’ compensation in New York?

New York state law requires employers with at least one employee, even a part-time employee, to have continuous workers’ compensation insurance. This requirement also includes family members that may be employed in the business. The term ‘employee’ also includes day labor, leased employees, farm employees, domestic workers that work 40 hours a week, unpaid volunteers, and most subcontractors.

Any employer that is required to purchase workers’ compensation insurance must also post a notice in a conspicuous area that provides workers with relevant workers’ compensation coverage information including the name, address, and telephone number of the insurer, along with the policy number. Any employer not displaying the notice can be fined up to $500 per violation.

Let’s find out if there are any exceptions that employers need to be aware of.

Are any employers exempt from providing coverage?

There are some employers that are legally exempt from carrying workers’ compensation insurance.

• Sole proprietors
• Partnerships without any employees
• One and two-person corporations where stock is held solely by owners and there are no additional employees
• Nonprofit entities that do not have compensated employees with the exception of clergy or teachers on staff
• Licensed insurance agents or brokers that are not considered employees
• Licensed real estate agents or brokers that are not considered employees
• Domestic workers, including minors, that do occasional chores, work less than 40 a week, and do not live on the premises
• Native American enterprises owned directly by Native American tribes
• Compensated executive officers of nonprofit organizations
• Amateur athletic associations run as a nonprofit

If you’re still unsure about whether your business is required to purchase workers’ compensation insurance, visit the New York Workers’ Compensation Board.

In order to better understand what a policy does, let’s look at the specific benefits that coverage offers.

What are the benefits of workers’ compensation coverage?

New York workers’ compensation insurance offers the following benefits for workers injured on-the-job.

Medical care

Medical care includes all related medical, dental, and surgical expenses, optometry, medically necessary drugs and any assistive devices that may be needed. Any travel related expenses incurred during treatment are also eligible for reimbursement.

Lost wage benefits

If an injured or ill employee is out of work for at least seven days, they become eligible for lost wage benefits. If the illness or injury keeps the employee out for 14 days, the employee becomes eligible for lost wage benefits effective from the first day of work missed.  Lost wage benefits amounts vary, depending on the employee’s wage and the degree of disability, with the following classifications used to determine the benefit:

• Temporary partial disability — An employee that has lost some of the ability to work.
• Temporary total disability — An employee that cannot work in any capacity on a temporary basis.
• Permanent partial disability — Permanent partial disability occurs when part of an employee’s earning capability has been permanently lost due to injury.
• Permanent total disability — Permanent total disability occurs when an employee’s earnings capacity has been lost due to injury.

Survivor benefits

If an employee dies from an injury sustained on the job, their surviving spouse and/or minor children are entitled to receive a weekly cash benefit. In addition, all funeral or memorial expenses up to $12,500 are covered in Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, Suffolk, and Westchester counties, with a maximum of $10,500 in final expenses covered in all other counties.

With an overview of how a policy protects employees, next we’ll go over how an employer goes about buying coverage.

How can employers purchase workers’ compensation insurance in New York?

Employers can obtain workers’ compensation insurance from a private carrier, broker, or agent. Employers can also choose to purchase insurance through the New York State Insurance Fund or NYSIF, which is a nonprofit agency. NYSIF is required to provide coverage to any employer, regardless of the type of business or safety record the business has. Employers also have the option to self-insure, either by becoming part of a group self-insurance program, or by applying to the Workers’ Compensation Board to become self-insured.

In addition, New York state uses an employer’s Federal Employer Identification Number or FEIN to identify a business. For example, when an employer adds or modifies their current workers’ compensation coverage, they would identify their business using their FEIN.

It’s important that any business that purchases workers’ compensation insurance review any policy paperwork to ensure that their FEIN is correct. If it’s incorrect, a copy of the CP-575 that is issued by the IRS will need to be provided to the New York State Department of Labor to correct the FEIN on any subsequent notices.

What are the penalties for not having workers’ compensation coverage?

Not having the appropriate workers’ compensation insurance leaves your business subject to the following penalties:

• The New York Workers’ Compensation Board can issue a Stop-Work Order for any business without insurance
• An employer with five or fewer employees can be fined between $1,000 and $5,000 for failing to secure workers’ comp coverage and be charged with a misdemeanor
• An employer with more than five employees can be fined between $5,000 and $50,000 for not having the proper workers’ compensation insurance coverage and be charged with a class E felony
• A civil penalty of $2,000 can be assessed every 10 days that a business does not have insurance, with the penalties accruing until the proper coverage is in place

In addition, uninsured employers are also liable for all wage benefits and medical costs incurred by the injured employee.

How are work-related injuries handled?

Employees should notify their employer in writing within 30 days of  the injury, providing details  such as when, where, and how the injury occurred. Employees are able to use their own physician for any subsequent care that is required, as long as the physician is registered with the Workers’ Compensation Board. Injured workers can also opt to visit a New York State Occupational Health Clinic.

The employee will also need to file a claim as soon as possible, though employees have up to two years after the occupational illness or injury to file a claim. In the case of occupational hearing loss, workers have a 90 day waiting period from the time the loss began, before they can file a claim.

Once an employee reports an injury or occupational illness, employers are responsible for notifying their insurance carrier within 10 days of the accident or injury by completing the Employers’ Report of Work-Related Injury or Illness.

Additional resources

For more information on New York workers’ compensation requirements, visit the Workers’ Compensation Board website or contact them at (877) 632-4996. Below are links to other resources.

• Quick guide for injured workers
• New York workers’ compensation requirements
• Employers’ guide to workers’ compensation
• Employee’s guide to filing a claim