Is Worker Compensation Required in NY?

Is Worker Compensation Required in NY?

Yes, worker compensation is required for nearly all employers in New York. The state mandates that businesses carry coverage to protect employees who suffer work-related injuries or illnesses, with limited exceptions that depend on the nature of the work and the employer's structure.

Who Must Carry Worker Compensation Coverage

In New York, the following employers are generally required to obtain worker compensation insurance:

• For-profit corporations and LLCs with employees
• Not-for-profit organizations with employees
• Sole proprietors and partnerships that hire workers
• Employers with one or more regular employees
• Certain real estate agents and salespeople classified as employees

Coverage must be in place from the date the first employee begins work. Policies must meet the minimum limits set by the New York Workers' Compensation Law.

Penalties for Non-Compliance

Employers who fail to carry required worker compensation coverage face serious consequences in New York:

• Stop-work orders from the Workers' Compensation Board
• Penalties of up to $2,000 per 10-day period without coverage
• Criminal penalties, including misdemeanor charges for deliberate non-compliance
• Personal liability of corporate officers and directors
• Inability to conduct business in New York until coverage is secured

Exceptions and Special Cases

A small number of workers and employers are exempt from the mandatory worker compensation requirement in New York:

• Domestic workers who work fewer than 40 hours per week in a single residence (though coverage is still required for those exceeding that threshold)
• Agricultural workers employed by certain small farms, though many farms now require coverage
• Volunteers for nonprofit organizations, in many cases
• Certain real estate brokers classified as independent contractors under specific conditions

Whether a particular worker is classified as an employee or independent contractor remains a central question, and misclassification does not remove the obligation to carry coverage if the relationship meets the legal definition of employment.

How to Obtain Worker Compensation in NY

Employers can secure coverage through private insurance carriers approved by the New York State Insurance Department. Businesses that cannot obtain coverage in the voluntary market may apply to the New York Compensation Insurance Rating Board. Self-insurance is also permitted for qualifying employers who meet strict financial and administrative requirements set by the Workers' Compensation Board.