Workers' comp laws in New York
Any New York business with even one employee must carry workers' comp, and the New York State Workers' Compensation Board (the Board) enforces it. A corporation's officers are covered unless a form leaves them out.
- One employee triggers coverage, farms included. Officers count unless Form C-105.51 leaves them out.
- Tips are left out of payroll.
- The fine runs up to $2,000 per 10-day period.
Do I have to carry workers' comp in New York?
Yes, once you have one employee. The law reaches any business run for profit that employs one or more people. (Source: Compensation Law §3)
Insurance that pays an employee's medical bills and lost wages after a work injury is called workers' compensationWorkers' Compensation Insurance that pays medical bills and lost wages when an employee is hurt or sick because of work. Insurers call it workers' compensation. more →. Part-time and unpaid family workers count too. (Source: Board) The other seven states are on the index of state pages.
Exceptions: a sole owner with no employees, and a one- or two-person corporation whose owners hold all the stock and offices. A commercial property owner set up this way is exempt until it hires a superintendent. (Source: Board)
New York has no farm exemption, so a food manufacturer that grows part of what it makes must cover those field workers. (Source: Board)
Who counts as my employee in New York?
Anyone who works under your direction. The Board lists ten factors, such as who controls the work; a 1099 alone does not settle it. (Source: Board)
The Commercial Goods Transportation Fair Play Act presumes a state-licensed driver hauling goods in New York is an employee. To treat a driver as independent, the driver must meet three criteria, the business eleven, and a written contract must exist. For a commercial fleet, this is the key test. (Source: Board)
Corporate officers are covered by default. To leave out the sole officer, or one or both officers of a two-officer corporation, the corporation files Form C-105.51 with its insurer. (Source: Form C-105.51) Sole proprietors, partners and LLC members are out unless they elect in. (Source: Compensation Law §54) See also what changes when you hire someone.
What goes in payroll?
Money paid for work, such as wages, bonuses and paid time off. In New York, tips are left out, and overtime is left out only for the extra premium pay. (Source: New York Compensation Insurance Rating Board (NYCIRB) manual, 2017 printing)
After the year, the insurer checks real payroll in a review called a premium audit; see the guide to the yearly payroll check. A restaurant shows the rule: servers' tips stay out, while entertainers' pay counts up to $8,250 a week. (Source: NYCIRB) Here is one server.
| What happens | Amount |
|---|---|
| You pay your server in wages for the year | $24,000 |
| Customers leave tips on top | $10,000 |
| Tips are left out of payroll, so they add | $0 |
| So the payroll your premium is figured on for this server is ($24,000 + $0) | $24,000 |
Illustration only, with round numbers. It is not a statement of what any policy charges; your own policy wording governs.
Overtime premium is left out only if your books show it separately; otherwise one-third of combined overtime pay is left out. (Source: NYCIRB manual) An officer's pay counts between $1,025 and $3,100 a week on policies starting October 1, 2026. (Source: NYCIRB)
Without a subcontractor's proof of coverage, your policy is charged as if their pay were yours: 90% of a labor-only price, 50% with materials, 33⅓% with equipment and operators. A wholesaler, distributor or importer using outside crews should collect that proof. The hirer can also be liable for an uninsured subcontractor's injured workers. (Source: Compensation Law §56)
Who sets the rate in New York?
The NYCIRB sets the base cost of claims per $100 of payroll, called a loss cost, and each insurer applies its own state-approved multiplier. Loss costs for policies from October 1, 2026 fall 21.9% overall. (Source: NYCIRB)
Your claims record then moves your price through an experience modification factorExperience Modification Factor (E-Mod) A number, with 1.0 as average, that raises or lowers your workers' compensation price based on your claims compared with similar businesses. Insurers call it the experience modification factor. more →. The plan is mandatory for every employer with New York exposure. (Source: NYCIRB, 2022 printing)
Class matters too. A hotel's restaurant staff go in their own class, usable only alongside a hotel class; other staff carry the main hotel class, near 2.0 per $100. (Source: NYCIRB) A grocery is rated as a grocery or a supermarket, or as a meat market when fresh meat, fish and poultry pass half of receipts. (Source: NYCIRB manual)
The New York State Insurance Fund, a state agency, must cover any employer that applies, but may refuse one that owes it money. (Source: Board) See our workers' comp coverage page.
What about workers in other states?
A business based elsewhere needs a full New York policy if it has a permanent location here, an employee whose main site is New York, or a New York permit, contract or construction subcontract. (Source: Board)
The policy must list New York among the states where it pays full benefits (insurers call this Item 3.A). Employees who visit for a meeting no more than once a month, or pass through only for deliveries, can use a limited listing. (Source: Board)
An online seller based elsewhere with a remote worker in New York is covered by its home-state policy only if the insurer is licensed in New York and lists it. Delivery drivers it hires may also meet the presumption above. (Source: Board) See also the guide to a new location in a new state.
What happens if I don't carry it?
The Board can fine up to $2,000 for each 10-day period without coverage, or up to twice what coverage would have cost on that payroll. Failing to insure can be a crime. (Source: Compensation Law §52)
A first penalty notice can top $12,000. A restaurant depot with a large crew faces the criminal line: five or fewer employees in 12 months can mean a misdemeanor, and more than five a class E felony. (Source: Board) A stop-work order halts all operations and can reach affiliates the owner substantially owns. (Source: Compensation Law §141-a)
An uninsured employer also loses its usual defenses: an injured employee may claim benefits or sue, and the employer cannot argue carelessness or assumed risk. (Source: Compensation Law §11) Anyone can check a business with the Board's "Does Employer Have Coverage?" lookup.
Frequently asked questions about workers' comp in New York
No. An employer may not require employees to buy a policy or share its cost.
Generally yes. Spouses and family who work for a for-profit business are employees. The spouse and minor-child exception applies to farms only.
Yes. New York also requires disability benefits and paid family leave coverage, starting four weeks after the employer's 30th workday of employment in a calendar year.
Not sure which New York rule you fall under?
Tell us how many people work for you, how they are paid and where, and we will read the rule against your situation with you.