Workers' compensation in New York
In New York, workers' compensation isn't optional once you have a single employee — and the penalties for going without are among the harshest in the country. Here's what the law requires, what it costs, and how to keep it manageable.
What workers' compensation does
It pays an injured or sick employee's medical care and a portion of lost wages when the injury arises from work, regardless of fault — and in exchange, employees generally can't sue you for the injury. The policy also includes employers' liability cover for the situations where a lawsuit is still possible.
What New York requires
- Workers' compensation — from the first employee, with almost no exceptions.
- Disability benefits (DBL) — cash benefits for off-the-job illness or injury. Required once you've had one or more employees on at least 30 days in a calendar year.
- Paid Family Leave (PFL) — job-protected paid leave, funded by employee payroll deductions but carried by the employer's policy.
Proof of all three is required for many licences, permits and contracts. The forms you'll be asked for are C-105.2 (workers' comp) and DB-120.1 (disability/PFL). I issue both.
"Contractors" often aren't
New York applies a strict test. If you control how and when someone works, they're likely an employee for workers' comp purposes no matter what the agreement says. In construction the presumption is even stronger. Misclassification is the most common way owners end up uninsured without knowing it.
How it's priced
Premium = payroll × the rate for each classification code × your experience modifier. Rates are set by classification, so office staff are cheap and roofers are expensive. Two things you control:
- Accurate classification — putting an office manager in a field-work class doubles the cost of that payroll. I check the codes on every quote.
- Claims history — after a few years, your own record adjusts the rate up or down through the experience mod. Safety programs and prompt claim reporting pay for themselves.
Premiums are auditable at year end against actual payroll. Estimate honestly; a large audit bill in month thirteen is worse than a slightly higher monthly payment.
Who's covered, who isn't
- Employees — full-time, part-time, seasonal, family, and often "contractors" (see above).
- Corporate officers are covered by default; officers of a closely held corporation can sometimes opt out.
- Sole proprietors and partners are excluded by default and can opt in — useful when a contract requires it.
- Subcontractors' employees are the subcontractor's responsibility — if the subcontractor is insured. If not, the claim can land on you. Always collect certificates.
Getting covered
- Tell me what each person does and their estimated annual payroll by role.
- I'll quote several private carriers and pair DBL/PFL with it.
- Once bound, certificates go out the same day.
- Through the year: I handle additions, certificate requests, claims reporting and the audit.
Most small businesses also need general liability; contractors need both before they can get on a site. Request a quote and I'll put the package together.
Common questions
Short answers to what people ask before they call.
I only have one part-time employee. Do I still need it?
Yes. New York requires workers' compensation for virtually every business with any employee — full-time, part-time, seasonal, family members, and in many cases people you treat as contractors. The exceptions are narrow; assume you need it.
What happens if I don't carry it?
The Workers' Compensation Board issues penalties of up to $2,000 for every 10 days without coverage, can issue stop-work orders, and the business owner can face criminal charges. An uninsured injury also leaves you personally liable for the medical costs and wages. It's not a risk worth taking.
What are DBL and Paid Family Leave?
New York's statutory disability benefits (off-the-job illness or injury) and Paid Family Leave (time off to care for family or bond with a new child). Both are mandatory for employers alongside workers' compensation, and are usually written as one small policy, often through the same carrier.
Do you place coverage through NYSIF?
No — I work with private carriers. NYSIF, the state fund, is available to any employer directly. For many businesses a private carrier is competitive or better, particularly with a clean claims history, and comes with a broker who handles the audit, certificates and claims with you.
I'm a sole proprietor with no employees. Do I need it?
Not by law — but general contractors, municipalities and many clients require it before you can work for them. Sole proprietors and partners can elect to be covered, and it's often the only way to get on a job site.
What is a payroll audit?
Workers' comp premiums are estimated from payroll at the start of the year and trued up at year end against actual payroll. If payroll grew, you owe more; if it shrank, you get money back. Keep good payroll records by class of work — it directly affects the bill.
Let's talk it through
A phone call or a message is all it takes. The first conversation is just a conversation.