As a business owner, with employees in the state of New York, you are required to purchase workers comp insurance. But do you know what the policy covers?

On-The-Job Insurance

The term refers to workers comp insurance providing benefits for your employees for work related injuries or illnesses. The benefit includes medical care expenses, lost work-time wages and death benefits. Individual health insurance will be secondary to workers compensation insurance, but will not reimburse lost wages or provide death benefits. NYS is very strict in enforcing workers compensation insurance. Business that fail to comply with the New York workers comp law, face a $2,000 penalty for every ten days they do not have insurance. In addition, business owners could be forced to pay for lost wages and medical care for workers that are injured on the job while there is no workers comp insurance in effect.

How Do NY Businessowners Determine Who Needs To Be Insured?

Business owners must determine who is an employee. Employment status is not a factor in determining workers compensation coverage. Full-time, part-time and even 1099 employees will need to be covered under a New York workers comp insurance policy if they meet the following criteria:

• Right to control - the employer has the right to control how and when a job is to be completed
• Character of work - the employee performs work that is in the scope of operations of the employer's primary business
• Payroll - the employee receives hourly, daily, weekly or monthly wages; taxes are withheld; benefits are provided; or salary is not dependent on the job performed; wages can be paid on a W-2 or a 1099
• Providing equipment or materials - the employer provides the necessary means to complete the job
• Right to hire and fire - the employer has the legal right to hire or fire an employee, subject to NY laws

How Is Premium Determined?

The New York State Workers Compensation Board sets the rates for workers comp classes. Each class is determined on the primary job of the employee. Once the class is determined, the premium is calculated by multiplying the class code rate by the payroll basis (payroll/100). If your employers perform work outside of New York, you will need the all states endorsement. Other endorsements can be added, such as the Longshore and Harbor workers compensation act and inclusion or exclusion of Executive officers. Credits, surcharges and taxes are added after all class codes have been calculated. Changes in payroll will be calculated at the annual audit.

Your Employee Is Injured...Now What?

If your employee reports an injury, which occurred on the job, report the claim immediately, but no later than 10 days after the injury. This will protect your business as well as the rights of your injured employee. Click here to access the NYS Workers Comp Employers Report of Work Related Injury claim form and the instructions for completion.