Both employees and employers can benefit from workers’ compensation insurance in New York. Coverage provides financial benefits for medical care for workers who were injured on the job.
Employers are required to carry workers’ compensation insurance in New York for employees. According to state law, there are very 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:
It is also required that an employer conspicuously post a notice that indicates its workers’ compensation insurance coverage. Notices must include the name, address, and phone number of the insurer and the employer’s policy number.
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:
If you are self-employed or a sole proprietor of a business, you do not need workers’ compensation insurance if you do not have any employees. However, sole proprietors could still benefit from a workers’ comp policy through lost wages coverage after an on-the-job injury.
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 board. The board 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.
Every person who needs workers’ compensation insurance in New York must be classified by an employee code. The New York Compensation Insurance Rating Board (NYCIRB) is the state’s unique system of coding that identifies levels of risk for various occupations.
An employee whose occupation is inherently higher risk (construction, for example) will have higher rates for coverage than someone whose job is less likely to cause injury, such as a desk job. Estimated employer costs for workers’ compensation in New York are $0.98 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
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 Workers’ Compensation Board, unless treatment is provided in an emergency situation.
Generally, an employer cannot direct employees to specific healthcare 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 his or her rights to select a provider of choice.
When the employer becomes aware of an 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 Board and the workers’ compensation insurance carrier within 10 days.
When a person dies as a result of a work-related injury or illness, his or her dependents are entitled to receive workers’ compensation death benefits.
New York classifies a spouse and minor children as primary dependents. The surviving spouse would usually receive benefits for the remainder of his or her life, unless he or she remarries. If the spouse remarries, a lump sum equal to two years of benefits would be delivered. If there are no children, the spouse receives 66.67% of the deceased worker’s average weekly wage up to the statutory maximum.
If there are surviving children, the rate remains the same but the benefits are divided so that 36.6% of the weekly rate is given to the spouse, and the children equally split the remaining 30%. Children’s benefits end when they reach 18 years old, or 23 years old if they are full-time students. If there is not a surviving spouse or children, benefits could be awarded to the deceased worker’s parents or estate.
As part of workers’ compensation death benefits, New York also provides for up to $6,000 for funeral expenses.
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 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 employee should have reasonably become aware of a work-related injury. For example, if an employee falls and hurts his back, he might return to work immediately and not require medical treatment. However, if he experiences back pain a few weeks later that is determined to be a result of the fall, he would have two years from that diagnosis to file a workers’ compensation 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.
If you are ready to explore workers’ comp insurance options for your New York business, start a free online application today to compare quotes from multiple carriers.