August 2010: Doing Business in NY

By August 18, 2010July 18th, 2011Business Insurance, Business Monthly Email

Are any of your employees:

  • delivering products to customers in New York State?
  • meeting with clients or vendors in New York State?
  • attending seminars, training sessions, or trade shows in New York State?
  • working at or visiting a job site in New York State?

In 2007, New York made a sweeping statutory reform of their workers’ compensation system subjecting out of state employers involved in any of the above, or any other situation that places their employees in New York State, to New York  workers’ compensation laws and regulations.

NY Disability Law

New York is one of a handful of states that require employers to provide disability benefits coverage to full and part-time employees for an off-the-job injury or illness.

If you have one or more employees in New York for 30 or more days within a calendar year (days need not be consecutive), you are required to obtain New York State disability benefits insurance coverage.

This disability benefits insurance coverage is totally different from and not included in New York State workers’ compensation insurance coverage.

Read more:
New York Employers
Out-of-state Employers
Disability Benefits

NY Workers’ Compensation Law

All out-of-state employers with employees who enter New York State for business purposes will be required to carry “a full, statutory New York State workers’ compensation insurance policy.”

An unendorsed Massachusetts workers’ compensation policy does not satisfy this requirement.

Read more:
Complying with the Law

Failure to Secure Coverage

New York is serious about enforcing compliance.  In the first year alone, over $20 million in penalties were levied statewide including $16.6 million to businesses that did not have the mandatory insurance protection for injured workers

An employer’s failure to provide workers’ compensation constitutes a class E felony punishable by imprisonment, fines ($5000 to $50000), and probation if they have more than five employees. This is a misdemeanor if less than five employees punishable by fines ($1000 to $5000), imprisonment, or both.

Failure to provide disability benefits constitutes a misdemeanor for all size employers punishable by fines ($100-$500), imprisonment, or both.

Employers can be imposed a penalty of $2,000 for every 10-day period in which they are not compliant with the workers’ compensation law.

Employers can be subject to a penalty of 1/2 of 1% of employers’ weekly payroll for the period of non-compliance plus up to an additional $500.

If a claim occurs when no workers’ compensation coverage is in place, the employer will be liable for the entire cost of the claim (both compensation and medical costs).

If a claim occurs when no disability coverage is in place, the employer will be liable for the greater of 1% of payroll for non-compliance period or injured employees eligible benefits.

Sole proprietors, partners, presidents, secretaries and treasurers of a corporation can be held personally liable for the failure to secure workers’ compensation insurance.

Stop work orders may be issued halting the business’ activities in New York until coverage is obtained and fines/assessments paid.

Read more:
Workers’ Compensation Penalties
Disability Penalties

How we can help you

New York is one of the many states whose workers’ compensation regulations are becoming increasingly difficult to understand, especially if you are an out-of-state employer. Not having the appropriate coverage or not understanding the type of coverage needed can be costly to your business, as indicated by the fines and penalties above.  Also, if an employee is injured in New York and your business is not adequately covered, you may be paying that claim out of pocket.

Contact us to review your current workers’ compensation program and to see if you are compliant with New York State Law.  Find out now, not when it is too late… after a claim or penalty.