Is Workers Compensation Insurance Required In New York?

According to The New York Workers Compensation Board,

“Workers’ Compensation Law requires that employers obtain and continuously keep in effect workers’ compensation coverage for all their employees.”

The rule includes part-time employees and family members employed by the company.

Employers must have a workers’ compensation insurance policy. It can come from a private insurance carrier, the New York State Insurance Fund, or self-insurance. Businesses must show proof of the policy when getting business permits. Companies may be exempt in very narrow circumstances. They are only exempt from these rules in that case. Self-insurance is rare.

This short video breaks down the basics of what you need to know…


Common Questions about Workers Comp in NY

Here is a list of familiar workers' compensation questions usually asked in conjunction with “Is Workers Comp Required in New York?”

Can My Business Be Exempt from Workers Comp in New York?

There are only minimal situations where for-profit businesses are exempt from providing workers’ compensation coverage, including:

  • True Sole Proprietorship – The business is owned by one individual with no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members), and no subcontractors and is not a corporation; or
  • Partnership with No Employees – The business is a partnership under the laws of New York State, and there are no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members), and no subcontractors; or
  • One or Two Owner Corporation with No Employees – The business is a one-or-two-person-owned corporation, with those individuals owning all of the stock and holding all offices of the corporation. There are no leased employees, borrowed employees, part-time employees, unpaid volunteers (including family members), and no subcontractors.

Who is an Employee Under New York Workers Compensation?

Under the Workers’ Compensation Law, virtually all employers in New York State must provide workers’ compensation coverage for their employees.

For workers’ compensation insurance purposes, the term employee generally includes day labor, leased employees, borrowed employees, part-time employees, unpaid volunteers (including family members), and most subcontractors.

The factors that are considered to determine whether an individual is an employee within the meaning of the WCL and thus must be provided with workers’ compensation insurance coverage by the employer include:

  • Right to Control– The degree of direction and control a person or organization exercises over someone they contract with to perform a task is always a central issue in determining an employer-employee relationship. A person or organization controlling how the work is performed indicates that an employee is performing the task.
  • Character of Work Is the Same as Employer– Work consistent with the preliminary work performed by the hiring business indicates that an employee is doing the labor.
  • Method of Payment– Employees tend to be paid hourly and daily. Weekly or monthly basis. Whether the labor is produced using a W2 or 1099 Form for tax purposes does not determine an employer/employee relationship for workers’ compensation purposes.
  • Furnishing Equipment/Materials– A business providing the equipment and materials used by people in performing the work tends to indicate an employer-employee relationship.
  • Right to Hire/Fire– A business retaining the authority to hire and fire the individuals performing the work indicates an employee is performing the work.

Note: A workers’ compensation law judge determines whether a person is considered an employee at a hearing following a work-related accident or illness.

READ NEXT: This Workers Comp Myth Costs Your Business $1,000’S Every Year

Who is Not Covered by Workers’ Compensation in NY?

There are several classifications of individuals that are not covered by workers' compensation in New York that you must be aware of when purchasing workers comp insurance (per the NY Workers Comp Board):

  1. Individuals who volunteer their services for nonprofit organizations receive no compensation. Please note that payment includes stipends, room and board, and other “perks” that have a monetary value. Money used solely to offset expenses incurred while performing activities for the nonprofit is not counted as a stipend;
  2. Clergy and members of religious orders that are performing religious duties;
  3. Members of supervised amateur athletic activities operated on a nonprofit basis provided that such members are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity;
  4. People engaged in a teaching capacity in or for a nonprofit religious, charitable or educational institution. To be exempt, the teachers must only be performing teaching duties;
  5. People engaged in a non-manual capacity in or for a nonprofit religious, charitable or educational institution (Section 501(c)(3) under the IRS tax code. Manual labor includes but is not limited to such tasks as filing; carrying materials such as pamphlets, binders, or books; cleaning such as dusting or vacuuming; playing musical instruments; moving furniture; shoveling snow; mowing lawns and construction of any sort;
  6. Persons receiving charitable aid from a religious or charitable institution who perform work in return for such assistance and who are not under any express contract of hire, and certain persons receiving rehabilitation services in a sheltered workshop;
  7. People who are covered for specific types of employment under another workers’ compensation system, such as those employed in specific maritime trades, interstate railroad employees, federal government employees, and others covered under federal workers’ compensation laws;
  8. The spouse and minor children (under 18 years old) of an employer who is a farmer as long as they are not under an express contract of hire;
  9. Certain employees of foreign governments and Native American Nations;
  10. New York City police officers, firefighters, and sanitation workers who are covered under provisions of the New York State General Municipal Law. Uniformed police officers and firefighters in other municipalities may also be excluded;
  11. People, including minors, doing yard work or everyday chores in and about a family, owner-occupied residence, or the premises of a nonprofit, noncommercial organization. Simple means occasionally, without regularity, foresight, plan, or method. Coverage is required if the minor handles power-driven machinery, including a power lawnmower;
  12. Certain real estate salespersons who sign a contract with a broker stating that they are independent contractors;
  13. Certain media sales representatives who sign a contract stating that they are independent contractors;
  14. Certain insurance agents or brokers who sign a contract stating that they are independent contractors; and
  15. Sole proprietors, partners, and sure one/two-person corporate officers with no other individuals providing services integral to the business.

The Rub

If anything is true about workers' compensation in New York, the rules can be tricky and often change without widespread communication.

Here’s the key, if you pay someone to do something for your business, ask your insurance professional if you need workers comp.


This is how you get your business in trouble with the NY Workers Comp Board.

Workers' compensation should be clear, simple, and affordable. Tin here is another way. At Rogue Risk, we help businesses overcome these obstacles.

If your current insurance professional has never addressed issues such as total cost of risk or return-to-work programs with you, then I’d encourage you to reach out to us today.

I'm excited to introduce you to a new viewing o your insurance program.

Thank you,

Ryan Hanley

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