Toole Guard: Doing Business in NY… Update to New York’s Out-of-State Employers Workers’ Compensation Policy

By February 6, 2011 Business Insurance, Toole Guard

In August we sent you an email advising that 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”  (list NY in part 3A “Covered States” of Workers’ Compensation policy) or be subject to fines and penalties imposed by the state (read full email).  New York has now issued revisions to this policy.

Out-of-state employers that send employees into NY only to attend infrequent (not more than one per month) meetings, seminars, conferences or conventions in New York will no longer be required to provide full statutory coverage for such employees. However, these employers are still required to make sure that their policy includes coverage for NY in part 3C “Other States Insurance”.

New York will continue to mandate full statutory coverage be maintained by out-of-state employers that meet any of the following criteria:

  • Required to register with the NY Department of Labor and pay Unemployment Insurance for any period in question.
  • Has a permanent physical location in New York or has employees whose primary work location is  in New York.
  • Is operating in New York under a permit, contract, or license granted by the State of New York, its counties or any municipality as defined under §57 of the Workers’ Compensation Law.
  • Is working as a contractor/general contractor/subcontractor on a construction project in New York.
  • In the previous year, has had employees physically in New York for at least 40 hours of every week for a period of longer than 2 consecutive weeks or had employees present in New York for 25 or more individual days (e.g.- 5 employees working for 5 days in New York equals 25 individual employee days). Employees traveling through the State not stopping for deliveries, pick-ups, or other work are not deemed to have worked a day here. An employer that has reason to know that it will meet these criteria in the current year, even if it has not done so in the prior year, must obtain the required coverage.

If you elect to not purchase “full statutory coverage” (NY listed in part 3A  “Covered States” of policy) and the NY Board inquires as to your business status, it will be your responsibility to attest to the fact that you meet none of these above conditions in order to avoid enforcement actions. If penalties are imposed by the Board, it will be your responsibility to provide documentation to the Board that none of the above conditions were met in order to have a penalty rescinded.

If you have employees in the State of New York and have not yet secured Workers Compensation coverage for that state, contact us now so we can review your operations and see if you can be considered exempt per the above policy revisions.

It is important to address this matter as failing to secure coverage can result in significant fines and penalties.

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