The workers’ compensation system was actually born out of a New York state tragedy: the worst factory fire in New York City’s history, at the Triangle Shirtwaist Factory in 1911. Today, the state upholds strict requirements for employers. All New York businesses with employees (full- or part-time) must carry workers’ compensation insurance.
As of 2007, any out-of-state businesses with employees working in New York state must also have a fully compliant workers' compensation insurance policy.
New York employers are required to provide workers' compensation insurance for:
Business owners: Sole proprietors, partners and one- and two-person corporations do not have to carry coverage, but may include themselves on a policy.
Contractors: A worker under direct control of the employer may be considered an employee, regardless of their tax status. Are you an employee or an independent contractor? 10 ways to tell >>
According to a 2018 report by the Oregon Department of Consumer and Business Services, NY workers' compensation rates are among the highest in the nation, ranging from $3.00 - $3.49 per $100 in payroll.
While most states use the National Council on Compensation Insurance (NCCI) to collect workplace data and set rates, New York uses its own rating bureau, the New York Compensation Insurance Rating Board. This non-profit, unincorporated association of insurance carriers collects loss, premium and payroll data, and recommends rates. Rates are set by class code, or industry.
This base rate is multiplied by company payroll, and then Experience Modifier and other discounts may be applied by an insurance carrier to calculate the final premium. The rating bureau also sets Experience Modifier factors for employers with premiums above $5,000. Learn more about how much workers’ compensation insurance costs.
New York has a private market. You can purchase a workers' compensation policy from any insurance carrier or agency that is licensed to write in that state. Get started on a policy with WorkCompOne >>
New York also has a state fund that competes with the private market. You can contact the New York State Insurance Fund if you are unable to secure coverage from a private insurance carrier. State funds accept higher-risk businesses, and their rates are often higher. Large employers might consider self-insurance options.
As the fourth most populated state in the U.S., the New York work comp market is served by a number of licensed insurers. While some commercial insurance carriers write multiple lines of business, some specialize in a particular line (workers' compensation) or business type (small business). Some, like Pie Insurance and The Hartford, specialize in both.
A work comp policy has two parts:
The state upholds harsh penalties for workers’ compensation violations. Not carrying workers’ compensation insurance for more than five employees is a felony in New York state, and penalized businesses can be debarred from public work contracts.
Keep in mind that your policy covers employees only when they are working in-state; additional coverage might be needed for out-of-state work.
New York has an office dedicated to answering workers’ compensation questions, particularly for small business owners. The Advocate of Business is the liaison between businesses and the state work comp systems, and can help with coverage and compliance issues.
Editor's note: Last updated February 4, 2019