New York workers’ compensation insurance

Each state has different workers’ compensation laws, and in New York, workers’ compensation insurance is mandatory for employers.

According to state law, there are limited instances when an employer would be exempt from this requirement. The only situations in which an employer would not be required to provide coverage are:

• If the business is owned by one individual and there are no employees, leased employees, borrowed employees, part-time employees, unpaid volunteers, or subcontractors
• If the business is a partnership or corporation and has no employees (based on the above specifications)
• If the business is owned by one or two people, and those people own all stock and offices, and there are no additional employees

The law also requires employers to conspicuously post a notice that indicates their workers’ compensation insurance coverage. Notices must include the name, address, and phone number of the insurer and the employer’s policy number.

Sole proprietors and independent contractors are strongly encouraged to buy workers' comp even when it's not required.

If you get injured on the job, a workers' comp policy can help pay your medical expenses and provide part of the wages you lose during your temporary disability.

Your personal health insurance provider might deny your claim if your injury is related to your work, which would leave you paying these bills on your own.

Most people who are paid to do a job are considered employees and would be required to be covered by workers’ comp. New York law classifies day labor, leased or borrowed employees, part-time employees, unpaid volunteers (which includes family members), and most subcontractors as employees for the purposes of workers’ compensation.

The exception would be an independent contractor, who must fall under each of these criteria:

• The contractor is not under the employer’s control or direction while performing a job.
• The contractor is performing services that the company does not do in its regular course of business.
• The contractor has an independently established trade, occupation, or business that is related to the service being performed.

It is an employee’s responsibility to inform the employer or supervisor when an injury or accident has occurred. The injured worker must seek treatment only from a healthcare provider that is authorized by the New York Workers’ Compensation Board (WCB), unless treatment is provided in an emergency situation.

Generally, an employer cannot direct employees to specific medical providers, unless the employer participates in a Preferred Provider Program or Alternative Dispute Resolution Program. The employer could recommend a provider, but the employee must also be informed of their right to select a provider of choice.

When the employer becomes aware of a job injury that might be covered by workers’ compensation insurance, the employer should communicate with its insurance provider throughout the workers’ compensation claim process.

A minor injury that requires two or fewer first aid treatments and that causes the employee to return to work in one day or less could be compensated directly by the employer. Any other injury must be reported to the Workers' Compensation Board and the workers’ compensation insurance carrier within 10 days.

Workers' compensation covers the cost of medical bills for employees who suffer a workplace injury or develop an occupational disease. It also provides disability benefits while employees are unable to work, typically two-thirds of their average weekly wage.

Workers' compensation benefits for injured employees in New York include:

• Medical benefits covering all medical expenses related to the injury
• Lost wage benefits for NY workers who are out of work for more than seven days
• Cash benefits for employees who suffer a loss of function or other permanent disability
• Related expenses, such as mileage reimbursement for travel to and from a doctor's office

For example, if a software developer is diagnosed with carpal tunnel syndrome due to keyboard overuse, your workers' comp policy would pay for their medical bills, including long-term medication and physical therapy.

Or, if an employee at your IT consulting firm trips in the office stairwell and suffers a concussion, then your workers' comp policy would pay for their ambulance ride and emergency room visit.

For details, visit the WCB's page on workers' comp benefits.

Most workers' compensation policies include employer's liability insurance, which helps cover legal defense costs if an employee blames their employer for an injury.

For example, if a worker files a lawsuit claiming that dim lighting in an office stairwell caused them to break an ankle, employer's liability insurance would help pay the employer's legal fees, including any settlement or judgment.

However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer once they accept workers' comp benefits.

The New York State Workers’ Compensation Board regulates and enforces all workers’ compensation requirements in the state. New York requirements that are not followed can result in serious civil and criminal penalties.

Failure to secure coverage for five or fewer employees within a one-year period is a misdemeanor and is punishable by a fine of between $1,000 and $5,000. If the failure to secure coverage is for more than five employees, it becomes a felony punishable by a fine of between $5,000 and $50,000.

If there is a subsequent conviction within five years for failure to secure coverage, the fine would be between $10,000 and $50,000 and could include other penalties and fines.

Failure to make a provision for payment of compensation for 10 days or more would leave the employer open to civil action by the Workers' Compensation Board. The WCB could impose a penalty of up to $2,000 for each 10-day period of noncompliance or a sum up to twice the cost of compensation during that period.

Misrepresentation by an employer of the number of employees, classification, wages, and accidents is subject to criminal and civil prosecution. A business is required to maintain accurate records.

If the employer intentionally understates or conceals payroll, conceals employee duties to avoid classification, or conceals other information, it could result in a fine of $2,000 for every 10-day period of noncompliance or twice the cost of compensation. If an employer is criminally convicted based on these charges, the fine would be $1,000 to $50,000.

Failure to maintain accurate payroll is also a criminal offense. If an employer does not keep accurate records about employee classifications, information about accidents, and wages, it can be found guilty of a misdemeanor and subject to a fine of between $5,000 and $10,000.

If the employer has been convicted on this basis in the past, the conviction becomes a felony, and the fine would rise to $10,000 to $25,000. The civil penalty for these offenses is $1,000 per 10-day period of noncompliance or twice the cost of compensation for the employer’s payroll during the periods of time when the failure occurred.

There are two ways for insurance companies and injured workers to reach workers’ compensation settlements in New York.

A stipulation agreement is when the injured worker and the insurance company can agree on the degree of disability and how much the worker will need in benefits. The benefits are disbursed to the employee on a set schedule. A stipulation agreement could be modified later if the worker’s condition worsens over time.

With a Section 32 settlement, both parties agree to close the claim in exchange for a lump sum payment. Once approved by the Workers' Compensation Board, the settlement is final, and the injured worker no longer has rights to modify the claim.

The workers’ compensation statute of limitations in New York is two years. That time begins either from the date of injury or the date that the claimant should have reasonably become aware of a work-related injury.

For example, if an employee falls and suffers a back injury, they might return to work immediately and not require medical treatment. However, if they experience back pain a few weeks later that is determined to be a result of the fall, they would have two years from that diagnosis to file a workers’ comp claim.

The statute of limitations for work-related hearing loss is slightly different. In that case, a worker cannot file a claim until 90 days after the loss occurs.

TechInsurance helps small business owners compare quotes for workers' comp and other policies with our easy online application. Start an application today to find the right insurance coverage at the most affordable price for your business.