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As a Business Owner, Do I Need Workers’ Comp and Disability in New York?

Updated: Mar 15




The easy answer here is, Yes. You do need to have coverage for people who work in your business. That means if you pay people or have volunteers or donated labor from your family or friends to work in your for-profit business, you need coverage.


WC premium is determined by how much payroll and what type of work your employees do. IF you are paying an employee to do roofing the rate is higher.. because there are more claims for a higher dollar amount. If you’re a clerk at a desk the chance of getting hurt is less so you pay less.


Full or part-time and volunteer employees need to be covered by insurance, just in case they get injured and then make a claim against you and your business. Not having the legally required coverage would not provide a good result for you, which could be thousands of dollars in fines.


Workers comp will pay for an employee for medical expense and loss of wages if the accident happens during work, car accident while making a delivery, or hit by a stapler thrown by a co-worker NYS Mandatory disability pays employees for loss of wages only, not medical for injury/illness/or pregnancy outside of work. If the pregnancy happens at work that is a completely different subject.


If you have no employees NYS does not require you to have WC or NYS mandated disability. An example of where you might need WC or DBL with no employees, you are working as a subcontractor to a general contractor or working for a commercial landlord, the landlord or GC will require you to have WC and DBL.


This is because if you get hurt on one of these jobs their WC policy would be required to pay for your injuries if you sign a form excluding yourself. Plus any money paid to you will increase their WC premium


What Businesses Need Workers Compensation?


There are actually very few exceptions to this law. Yes, it is a law. But it’s just as much for your own protection as it is for your employees. Every business needs to have their employees covered, in case of injury. . Employees are can not sue employers for unintentional injuries.


What Businesses Need Disability Insurance?


In the state of New York, as a business owner, you are legally required to have disability insurance for your employees. This is meant to cover pay for loss of wages for people for a set period of time who are injured or ill or pregnant while not on the work premises.


This covered their wages or part of their wages only. Other treatments will need to be covered by the employee. Paid family leave is very often a part of this insurance policy. The base loss of income in NYS is $147 per week, but more replacement income is available

Rates are based upon the number of male and female employees Rates for females are higher, females will take time off to give birth


What’s the Difference Between Workers Comp and Disability?


Both of these insurance policies are required by businesses to cover potentially lost wages due to illness or injury. While both covers lost income or a part of the income, worker’s comp covers injuries that happen on the job.


Disability can cover an employee who can’t work due to injury or illness, but the injury doesn’t happen on the job. To a business owner, it might seem a bit extreme, but there you have it.


There are exceptions to the rules.


Intention Injuries


If someone tries to injure themselves on purpose simply to get out of work and collect insurance, if proven, they will not be able to. People do this at a shockingly regular rate.


Usually, employees who try to do this are not very bright, perhaps talking about a concert they want to see next week, or boasting about all the slip and fall trophies they have won.


Under The Influence


While most jobs are much more tolerable with a snootful, if they get injured while intoxicated, they can not collect the benefits.


Injured During a Fight They Start


If Doug eats your sandwich out of the staff fridge, even though it is clearly marked, and Gary pops him one on the nose, and then Doug pounds Gary, Gary is out of compensation and that tuna sandwich.


Emotional Trauma


Jill couldn’t access the website she needed to buy new shoes, even though she knows people are blocked from doing so and she claims it’s triggered her PTSD, because most 20-year-olds have it, sorry. Nice try. Get a cat.


What if I Don’t Have WC or Disability Insurance?


Any larger company will have worker’s compensation and disability insurance in place, but many smaller companies may not. Often, a smaller company may feel they don’t need it or that the chances of anyone getting injured is low-risk.


But, even a smaller injury can become a lot worse. Depending on who it is, they may feel like they are owed, or if they know there is no insurance, decide to make a big deal out of it.


The insurance is in place to protect you from lawsuits, fines, and potentially losing your business. Some insurance doesn’t actually protect you from the employee filing a lawsuit for additional compensation, so keep that in mind.


Do I Need Workers Comp and Disability for Myself?


There are exemptions from workers’ compensation if you are a lone worker and business owner. This extends to business partnerships and corporations that are owned by you and one other, but no one else.


Depending on what your business is, however, you may want to have coverage anyhow. You may be out and about, dealing with clients, having clients into your premises, or in contact with various people.


A History of Worker’s Comp


Interestingly, we can do a deep dive through history and find cases where employers paid their employees when they got hurt while working for them. In fact, back to BC.


In our more modern times, the Industrial Revolution saw a lot more work and people working with machines. These machines were in cramped spaces, with toxic chemicals and people got hurt.


Employees were expected to sue for damages but rarely got them, which led to no one willing to do the work. It became necessary to implement such insurance to benefit both parties and keep the business afloat.


If you run a business with employees, get the insurance. You don’t want people to get injured, you don’t want to get sued, because there is always someone ready and willing to do just that.


Notes


https://www.terrykatzandassociates.com/faq/schedule-loss-of-use/

NYS Workers Comp Settlement Chart – How Much Is My Schedule Use Award?

NYS Workers’ Compensation Law states how many weeks of benefits an injured worker with work-related injuries will receive for a Schedule Loss of Use award based on the percentage for the body part injured.


Below are the maximum number of weeks possible compensation, based on the body part:


  • Loss of use for Arm, 312 weeks

  • Loss of use for Leg, 288 weeks

  • Loss of use for Hand, 244 weeks

  • Loss of use for Foot, 205 weeks

  • Loss of use for the Index finger, 46 weeks

  • Loss of use for Big toe, 38 weeks

  • Loss of use for Eye, 160 weeks

  • Loss of use for Middle finger, 30 weeks

  • Loss of use for Other toes, 16 weeks

  • Loss of use for Pinky finger, 15 weeks

  • Loss of use for the Ring finger, 25 weeks

  • Loss of use for Thumb, 75 weeks


(Average Weekly Wage ÷ 2/3) x (Max. Number Of Weeks Allowed x % Loss of Use)

For example, say you were making an average of $600 per week when you injured your arm on the job.


Based on your average weekly wage, your maximum benefit (⅔ of your average weekly wage) would be $400 per week.


The Schedule Loss of Use table above shows that 100% loss of use of an arm is worth 312 weeks of compensation. After reaching maximum medical improvement, a doctor determines you have a 25% schedule loss of use of your arm.


Based on your loss of use (25%) and the maximum number of weeks of compensation for an arm injury (312), you may be eligible for 78 weeks of benefits.


Knowing the weekly compensation ($400) and length of benefits (78 weeks), your estimated SLU award would be $31,200.


A Schedule Loss of Use Award is reduced by the amount of any prior payments you received while out of work if any.


Penalties for Non-Compliance
Civil Fines: Pursuant to Section 52-5 of the Law, an employer may be subject to a fine of $2,000.00 for each 10 day period of non-compliance. As you can imagine these fines can add up quickly, you should take immediate action to protect your business and life savings.




Criminal Liability: Pursuant to Section 52-1 of the Law a non-compliant employer with five or fewer employees, may be subject to a criminal misdemeanor punishable by a fine of not less than $1,000.00 and no more than $5,000.00 (in addition to the fines contained in Section 52-5).


In addition, non-compliant employers with more than five employees may be subject to Class E Felony punishable by a fine of no less than $5,000.00 but no more than $50,000.00 (in addition to other fines).


Subsequent violations can be considered a Class D Felony for all employers and may result in additional fines not less than $10,000.00 but no more than $50,000.00.
 



Your Business May Be Closed: Under Section 141-a of the Law, the Board may issue a Stop Work Order to a non-compliant business. This can be the death knell for your company.


More Civil Fines: Pursuant to Section 51-1 of the Law, an employer who misrepresents payroll records may be subject to $2,000.00 for each 10 day period of non-compliance.


The misrepresentation may lead to a criminal conviction with separate punishment as well.



Even More Civil Fines: Pursuant to Section 51 of the Law, an employer who fails to conspicuously post a C-105 form in each place of business shall be required to a fine of up to $250.00 for each violation in addition to any other fines.


Even More Civil Fines: Pursuant to Section 131 of the Law, an employer may be subject to a $1,000.00 penalty for every 10 days of not keeping accurate payroll records.


This failure may result in criminal liability as well.
 
Disqualification from Public Works Projects: Under Section 141-b of the Law, non-compliant employers may be prevented from bidding on public work projects. While this may be not an issue for most employers, it can devastate companies that can rely on public works projects.


Further, if an injury occurred in the workplace, a non-compliant employer may be subject to legal fees, medical-related damages and may face a potential lawsuit by the injured employee.


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