Workers’ comp
Workers’ compensation in New York
Workers’ compensation pays medical costs and lost wages when an employee is injured on the job, and protects the employer from being sued over that injury. New York requires it for virtually every employer with employees, including part-time workers and family members. Operating without it carries penalties and personal liability for the owner.
Who this is for
- Every New York employer with employees, part-time staff included
- Contractors, who will be asked for a certificate on every job
- Businesses that use subcontractors, since an uninsured subcontractor can end up on your policy
Who it is not for
- Sole proprietors with no employees, no subcontractors and no volunteers, though many still elect coverage to satisfy client contracts
- Certain narrowly defined exempt categories, which should be confirmed against Workers’ Compensation Board guidance rather than assumed
What it covers and what it does not
| Covered | Not covered |
|---|---|
| Medical treatment for a work-related injury or illness | Off-the-job injury, which falls under disability |
| Wage replacement while the employee cannot work | Injury caused by intoxication or a deliberate act |
| Permanent disability and death benefits | Pain and suffering, which the system does not award |
| Employer liability for suits arising from a covered injury | Employment practices claims such as discrimination |
Every policy differs. This table describes what these policies generally do, not the terms of any specific contract.
New York requirements
- New York requires workers’ compensation coverage for nearly all employers. Part-time employees, borrowed employees, leased employees, family members and volunteers can all trigger the requirement.
- An uninsured employer in New York faces penalties assessed by the Workers’ Compensation Board, and corporate officers can be held personally liable.
- If you hire an uninsured subcontractor, that subcontractor’s employees may be treated as yours for coverage purposes and will be picked up in your audit.
- Premium is based on payroll and class code and is audited at the end of the policy period. An audit can produce a bill or a refund, so classifying payroll correctly at the start is what controls the final cost.
- The New York State Insurance Fund is available as a market of last resort, but is not always the least expensive option.
What it costs
Priced per $100 of payroll, by class code. Clerical work runs a fraction of a dollar per $100. Roofing, structural work and trucking run many multiples of that. Two businesses with identical payroll can differ by an order of magnitude.
What moves the number
- Class code for each type of work performed
- Total payroll by class
- Experience modification factor, which reflects your claims history
- Whether officers are included or excluded
- Safety program and return-to-work practices
Common questions
I only have one part-time employee. Do I still need it?
Almost certainly yes. New York’s requirement is not based on a minimum number of employees, and part-time work counts. The exemptions are narrow and worth confirming against Workers’ Compensation Board guidance rather than assuming.
What happens at audit?
The carrier reviews your actual payroll against what was estimated and adjusts the premium. If payroll was understated or work was classified into a cheaper code than it belonged in, you get a bill. Getting the class codes right at the start is the whole game.
My subcontractors carry their own coverage. Am I covered?
Only if you have their certificates and they are current. If a subcontractor turns out to be uninsured, their employees can be treated as yours and land on your policy at audit. Collect certificates before work starts, not after.