Employers: No Worker’s Comp or Disability Insurance Violates NYS Law in Business and at Work


In New York state, as we wait for the final NYS Paid Family Leave regulations to be issued sometime next month (July 2017) by the NYS Worker’s Compensation Board so employers can prepare and start employee payroll deductions later this year to pay for the NYS Paid Family Leave effective January 1, 2018 (employers with self-insured disability plans who have added a NYS Paid Family Leave rider can start making employee payroll deductions as early as July 1, 2017), here are some gentle reminders about NYS Paid Family Leave and from the NYS Worker’s Compensation Board website for NYS employers regarding required Worker’s Comp and Disability coverage.

  • NYS Paid Family Leave, effective January 1, 2018, is required for employers with one or more employees.
    • If your disability insurance broker and payroll vendor have not yet reached out to you to prepare for employee payroll deductions to pay for the upcoming NYS Paid Family Leave, reach out to them.
  • Worker’s Comp Insurance Coverage Requirement: If you have one (1) or more employees working in New York state (NYS), you are required to obtain NYS workers’ compensation insurance coverage. The workers’ compensation insurance policy must be effective no later than the first day you have employees. New York State workers’ compensation insurance covers employees for work-related accidents, injuries or illness.
  • Disability Insurance Coverage Requirement: If you have one (1) or more employees for 30 days in a calendar year, you are required to obtain NYS disability benefits insurance coverage. Such insurance must be effective no later than four weeks after the 30th day you have employees. However, if you have purchased a business whose employees had already been covered by the Disability Benefits Law, the effective date of coverage must be no later than the day you purchased the business.

More from the NYS Worker’s Compensation Board website on employer penalties for lacking both Worker’s Comp and Disability coverage:

Failure to Obtain a Workers’ Compensation and Disability Benefits Policy when It is Required: Failure to obtain a workers’ compensation policy when it is required constitutes a class E felony if you have more than five (5) employees. If you have fewer than five (5) employees, such failure shall constitute a misdemeanor.

However, subsequent criminal violations constitute a felony. If a work-related injury occurs while you do not have workers’ compensation coverage, you will also be liable for the entire cost of the claim (compensation payments and medical costs), and penalties, if a law judge so rules.

  • Failure to carry Workers’ Compensation Insurance for 5 or less employees within a twelve-month period is a misdemeanor punishable by a fine not less than $1,000 nor more than $5,000 [Section 52(1) (a)].
  • Failure to carry Workers’ Compensation Insurance for more than 5 employees within a twelve-month period is a class E felony and is punishable by a fine not less than $5,000 nor more than $50,000 [Section 52(1)(a)].

Failure to obtain a disability benefits policy constitutes a misdemeanor. If a non-work-related disability occurs while you do not have disability benefits coverage, you will also be liable for the cost of the claim and penalties. In addition, the Board is required to impose penalties in an amount fixed by Law against employers who fail to maintain a workers’ compensation policy.

  • Failure to carry Disability Benefits Insurance is a misdemeanor punishable by a fine of not less than $100 nor more than $500 or imprisonment for not more than one year, or both, with increased monetary penalties for second and third or subsequent violations (Section 220),and
  • Where an employee of a non-insured employer is disabled due to an off-the-job injury or illness, the noninsured employer will be responsible for payment of the amount of benefits to which the employee is entitled or for payment of 1% of their payroll for the period of non-compliance, whichever is greater (Section 213). 

Do you have the required NYS Worker’s Comp and Disability insurance coverage for your employees in business and at work?

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