Understanding NYS Workers Comp Requirements
Many New York business owners believe workers’ compensation insurance only applies to large companies or full-time employees. That assumption can lead to costly penalties, unnecessary legal exposure, and damaged trust with employees. If you have even one employee in New York State, you must carry workers’ compensation insurance. Whether that person is part-time, seasonal, or family, coverage is mandatory from day one.
At Refine Risk, we help small business owners and growing firms understand their legal obligations and protect what matters most, the people who help them build.
What Does Workers’ Compensation Insurance Cover in New York?
Workers’ compensation is a protection system designed to safeguard both employers and employees.
It covers:
- Medical treatment for work-related injuries or illnesses
- Wage replacement while the employee recovers
- Disability benefits if the injury prevents future work
- Employer legal protection against most workplace injury lawsuits
Without it, even a minor injury could lead to substantial financial loss or personal liability.
A restaurant owner in Yonkers has one part-time dishwasher who slips and falls. Without workers’ comp, the owner could be personally liable for medical bills, lost wages, and potential penalties from the state.
New York State Workers’ Compensation Requirements Explained
New York’s workers’ compensation laws are among the strictest in the nation. Here’s the essential rule:
If you employ one person, you must have workers’ compensation coverage.
The law covers:
- Part-time, seasonal, and temporary employees
- Family members, paid or unpaid
- Interns, day laborers, and casual workers
Who can opt out?
- Sole proprietors, partners, and some corporate officers can exclude themselves but not employees.
Penalties for noncompliance include:
- Civil fines up to thousands of dollars
- Stop-work or business closure orders
- Personal liability for injury-related costs
- Loss of legal protections
Failure to comply can put both your finances and your reputation at risk.
Common Myths About Workers’ Compensation for Small Businesses
“I only pay them in cash, it doesn’t count.”
It does. Paying someone off the books doesn’t change their classification as an employee under New York law. If they work for your business, you’re responsible for their coverage.
“They’re a contractor, not an employee.”
Even if you label someone an independent contractor, the state may still view them as an employee if you control how, when, or where they perform their work. Misclassification is one of the most common compliance violations.
“It’s too expensive for a small business.”
For most small businesses, it’s affordable, especially compared to fines or lawsuits. Refine Risk often places compliant policies for less than the cost of one missed payroll run.
“I work from home, so I don’t need it.”
If anyone else helps your business, even remotely, you need coverage. The physical location of work doesn’t affect the requirement.
Examples of When Workers’ Compensation Is Required in New York
Scarsdale Coffee Shop
A small café in Scarsdale hires a college student for the summer. Even though the student works limited shifts, the law requires workers’ comp coverage.
White Plains Landscaper
A landscaper brings in a cousin for a few weeks of help. Family or not, paid labor equals employment under state law.
Brooklyn Consultant
A consultant hires a part-time assistant who works from home. Since the assistant’s work directly supports the business, coverage is required immediately.
Each of these examples illustrates a simple truth: if they work for you, they must be covered.
Can New York Business Owners Exclude Themselves from Workers’ Comp?
Yes, but only yourself. Business owners, sole proprietors, and partners can opt out of coverage for their own role. However, as soon as you hire anyone else, coverage for that person becomes mandatory. Even a short-term or family arrangement counts as employment under New York law. There is no casual exception.
Does Workers’ Compensation Apply to Remote or Home-Based Employees?
Remote or home-based work doesn’t change your obligation. If your assistant, bookkeeper, or marketing contractor works for your business, even from another state, they may still qualify as an employee under New York law.
Coverage follows the nature of the relationship, not the physical location of the work.
How Much Does Workers’ Compensation Cost in New York?
Several factors influence premium cost:
- Industry risk level: Construction or manufacturing costs more than consulting or retail
- Total payroll: Premiums scale with wages
- Claims history: Prior claims can increase future rates
- Classification codes: Each role has a risk-based rating
Typical range: Small businesses in NYC, Westchester, or Fairfield often pay between $400 and $2,000 per year, depending on exposure.
That investment protects against claims that can easily exceed six figures.
How Refine Risk Supports New York Businesses
We help business owners simplify workers’ comp compliance without the confusion or wasted expense.
Our process:
- Review your operations – Understand employee types, payroll, and structure
- Clarify requirements – Confirm whether coverage is mandatory for your situation
- Shop multiple carriers – Compare top-rated insurers for competitive pricing
- Integrate coverage – Align your workers’ comp with general liability, BOP, and other policies for total protection
- Monitor compliance – Support your renewal, audits, and classification updates each year
Our goal is clear: keep you compliant, protected, and confident.
How Proper Workers’ Comp Coverage Prevented Losses
A small property management firm in Yonkers hired a part-time maintenance worker without realizing workers’ comp was required. After a minor accident, the business faced a state fine and uncovered medical expenses exceeding $30,000.
They turned to Refine Risk, and within a week, we placed coverage, negotiated their penalty, and implemented a compliance plan to prevent future exposure.
Now, their policies work together seamlessly and their team is protected properly.
How Workers’ Compensation Builds Stronger Businesses
Workers’ compensation is not just a regulatory obligation. It’s a reflection of responsible leadership. Protecting your employees, no matter how small your team, creates security, loyalty, and stability.
And when the system is built correctly, it also protects you the business owner from personal and financial risk.
Protect Your Team and Stay Compliant with Refine Risk
In New York, if you hire one employee, you must have workers’ compensation insurance.
It’s the law and it’s one of the smartest financial decisions you can make.
Refine Risk helps business owners across NYC, Westchester, and Fairfield County comply with confidence, connect their coverages, and protect every part of their operation.
Start with a review today. Contact our office in Tuckahoe to schedule a consultation.