Does my business need workers’ compensation insurance in New York state? If you have even one employee in New York, even if you’re not a New York business owner, the answer is almost certainly yes.
The New York Workers’ Compensation Law reaches further than most business owners expect. This legislation can apply to a business headquartered in another state, to a crew that spent two weeks on a job site in Albany, and to your daughter who helps out on Saturdays. Here's how to tell where you stand.
Who is required to provide workers’ compensation under the New York Workers’ Compensation Law?
If you're a business owner in New York with employees, the New York Workers’ Compensation Law requires workers’ compensation insurance in almost all cases. The statute calls this obligation “securing compensation.” You satisfy it either by buying a policy or by qualifying as self-insured.
Even if your business doesn’t have a location in New York, you’ll need workers’ comp coverage if:
You hire an employee whose primary work location is New York.
You're working on a construction project in New York as a general contractor, contractor, or subcontractor.
You hold a permit, license, or contract from New York State or a New York municipality. Under WCL §57, the agency can't issue or renew it without proof of workers’ comp coverage.
You're registered with the New York State Department of Labor and paying unemployment insurance for the time your employees spend in the state.
You have any out-of-state employees who worked in New York last year for at least 40 hours of every week for more than two weeks in a row, or have reason to expect they will this year.
Your employees worked in New York for 25 or more days, or have reason to expect they will this year. Note: The 25-day count adds up individual employee days, not calendar days, so five employees spending five days each in New York equals 25 days. Time spent only passing through the state, or attending no more than one conference or meeting a month, doesn't count.
If you meet any of the criteria above, you need a full New York workers' comp policy. If none of them apply but you still send employees into the state occasionally, you can extend your existing policy to cover New York work. Either way, tell your insurance agent where your employees actually work and how often. They can help you determine your coverage.
Who is exempt from workers’ compensation in New York?
If your business is a sole proprietorship, LLC, LLP, or partnership without employees, you aren’t required to have workers’ comp insurance.
The catch is that the definition of "no employees" is strict. Part-time workers, leased or borrowed employees, unpaid volunteers, student interns, and family members all mean you need coverage (including your spouse, whether or not you pay them). Uninsured subcontractors count too.
If your business is a corporation with no employees, you still need workers' comp insurance, unless:
You own all of the shares of stock and hold all offices of the corporation, or
You are one of only two officers of the corporation, and the two of you own all the shares of stock (each holding at least one share) and hold all offices.
A few other exemptions to know:
Domestic workers in a private household who each work fewer than 40 hours a week and don't live on the premises.
Licensed real estate agents and licensed insurance agents or brokers, if they work under a written contract that expressly names them independent contractors.
Clergy performing only religious duties, teachers performing only teaching duties, and people in non-manual roles at a nonprofit religious, charitable, or educational organization.
If I’m the business owner in New York and have no employees, should I still get workers’ comp insurance for myself?
You're not required to, and you can legally operate without it. But buying a policy that covers just you is worth considering in three situations:
A client requires it. General contractors and larger clients often won't let you start work without proof of your own policy. A certificate of exemption won't satisfy this requirement. (If the requirement is coming from a state or municipal agency for a permit or license instead, you can file a free Certificate of Attestation of Exemption, Form CE-200, rather than buying coverage.)
You get injured and can't work. The policy replaces part of your lost wages, which matters more when you're the business and there's no one else billing.
Your health plan may not cover it. Many health plans coordinate against or exclude work-related injuries. Workers' comp medical benefits have no deductible or copay.
Do I need to provide independent contractors with workers’ compensation insurance in New York?
No, you don't need to cover true independent contractors. But New York decides who qualifies, not you, and the state's definition is narrow.
Misclassifying a contractor by New York’s standards can cost you in your annual insurance audit. Your carrier can add uninsured contractors to your payroll and charge a premium for them.
The most important factor in classifying their work is control. If you direct how and when the work gets done, the Workers' Compensation Board could call that person an employee. Beyond control, the Board looks for signs the person runs a real independent business:
They have their own Federal Employer Identification Number (FEIN).
They carry their own liability and workers' comp insurance.
They work under their own permit or operating authority.
They provide their own equipment and materials.
They perform work that's different from your core business, and do this for other clients too.
You can find a complete list of criteria here. If you're unsure how a worker should be classified, ask the Board rather than waiting for a claim to settle it.
Construction is an industry that works differently than the above. Under the Construction Industry Fair Play Act, anyone performing services for a contractor is presumed to be that contractor's employee. To overcome that, you have to prove three things: the person is free from your control and direction, the work falls outside your usual course of business, and they run an established independent business doing similar work.
How do I get workers’ comp insurance in New York?
You can buy from a private carrier, like through a New York licensed insurance agent or broker, or apply directly to the New York State Insurance Fund (NYSIF).
If you already run payroll through a platform, check whether it offers workers' comp. With Gusto, you can get quoted and covered by a private carrier for workers’ compensation insurance without leaving your account. The premium is calculated from each actual payroll instead of a year-ahead estimate.
When applying, be prepared to answer several questions about your location, industry, number of employees, annual payroll, and what each employee actually does day to day. Your rate is set by job classification, so a business with office staff and a business with roofers will pay very different premiums.
While you're talking to carriers, ask about New York disability benefits and Paid Family Leave coverage. They're separate requirements from workers' comp, but most carriers write all three together.
One more thing worth knowing: if you're a sole proprietor or partner, New York doesn't count you as an employee. So you don’t have to cover yourself, but the policy you buy for your staff won't protect you if you get hurt. Ask your carrier to add you if you want coverage for yourself.
How does workers’ comp work in New York?
Workers' comp is a no-fault system, which means an employee doesn't have to prove you did anything wrong to collect benefits. In exchange they generally can't sue you over the injury. Here's the sequence, including the claims process:
You carry coverage and post the notice of compliance your carrier sends you.
An employee gets hurt or sick on the job. They should tell you right away and get treatment from a Board-authorized health care provider, except in an emergency. As a general rule, you can't send them to a provider of your choosing.
The employee gives you written notice within 30 days. If they miss that window they can lose their right to benefits, though a judge can excuse the delay.
You report it to your insurance carrier and the Board on Form C-2F. The deadline is the 18th day after the injury or within 10 days of learning about it, whichever gives you more time. If your carrier reports electronically to the Board through eClaims on your behalf, you don't have to file the C-2F separately, but confirm with your carrier.
The employee files their own claim with the Board on Form C-3, within two years of the accident or of learning that an illness was work-related. From there your carrier either starts paying or formally disputes the claim, and pays medical bills directly.
Your part is mainly steps 1 and 4. Once the claim is with the Board, your carrier handles it.
What is the penalty for not providing workers’ compensation insurance in New York?
Going without required coverage in New York carries a civil penalty of up to $2,000 for every 10-day period you were uninsured while people were working for you, plus criminal exposure. The penalty applies whether or not anyone gets hurt. The trigger is the Board finding you went at least 10 consecutive days without coverage. It can also assess up to twice what coverage would have cost for that payroll instead.
By the time a business receives its first penalty notice, the amount may already exceed $12,000. And if someone does get hurt while you're uninsured, your business will have to cover their medical care and wage benefits.
Consequences can go beyond the fine:
The Board can shut you down. It has authority to issue a stop-work order halting operations. You’d still owe coverage and benefits.
It can be a crime. Failing to secure coverage for five or fewer employees within a 12-month period is a misdemeanor punishable by a fine of $1,000 to $5,000. More than five, and it's a class E felony with a fine of $5,000 to $50,000. If you took reasonable steps to get covered, that’s an affirmative defense.
Incorporating doesn't shield you. Where the employer is a corporation, the president, secretary, and treasurer are personally liable for the penalty.
You lose your main legal protection. When you carry coverage, workers' comp is generally your employee's only remedy and they can't sue you over the injury. Without it, an injured employee can take you to court directly.
If you've already received a penalty notice, you have 30 days from the date on it to request a review from the Workers' Compensation Board's Advocate for Business, explain what caused the lapse, and ask for a reduction. The Board can rescind, reduce, or uphold the penalty.
Getting workers’ compensation right in New York
To stay compliant in New York, you mainly need to know whether New York counts someone as your employee, and have a policy in place before you find out the hard way.
If you're not sure if you have an obligation, the Workers' Compensation Board's Advocate for Business can walk you through it, and your insurance agent can tell you which listing your policy needs.
If you're setting up payroll in New York, Gusto can get you quoted and covered for workers’ comp in the same place you pay your team, with a premium calculated from each payroll instead of one lump sum at the beginning of the year.
FAQs
Do I need to provide workers’ compensation insurance if my employees are family members?
Yes. New York treats family members as employees, so hiring your brother or your daughter triggers the same coverage requirement as hiring anyone else. A spouse counts too, even if you don't pay them. The only exceptions are the standard owner exclusions for sole proprietors, partners, and qualifying corporate officers.
Do I need workers' comp insurance for one part-time employee in New York?
Yes. New York has no minimum employee threshold, so coverage is required as soon as you have one worker, whether they're part-time, seasonal, or temporary. Hours worked don't change the obligation. The narrow exceptions apply to specific worker categories, like household workers under 40 hours a week, not to small headcounts.
Can employees choose their own health care provider for a workers' comp claim in New York?
Yes. Injured employees select their own health care provider, as long as that provider is authorized by the Workers' Compensation Board. Emergencies are an exception, and employers enrolled in a Preferred Provider Program (a workers' comp preferred provider organization) or Alternative Dispute Resolution Program can direct initial care. Otherwise, employers may not send an employee to a specific doctor.
What does workers’ comp insurance cover?
Workers' comp insurance covers medical treatment and partial wage replacement for injured workers who get hurt or sick because of their job. Workers' comp benefits apply to both accidental injury, like a fall, and occupational diseases from long-term workplace exposure, such as occupational loss of hearing. In New York, an employee pays nothing out of pocket for authorized medical care.
How much does workers' comp pay in New York?
New York pays two-thirds of an employee's average weekly wage, multiplied by their degree of disability, subject to a statewide maximum and minimum that the Workers' Compensation Board resets each July 1. Wage benefits require the disability to last more than seven days. Beyond wage replacement, workers' comp covers medical treatment, vocational rehabilitation, and death benefits for a worker's dependents if a job-related injury or illness is fatal.
