Are you planning to set up a business in New York? Do you want to know who is exempt from workers compensation in New York? If yes, then there are various rules that you need to follow regarding your employees. One such rule is to have a workers’ compensation policy, which the businesses must show at the time of getting the business permit.
However, in a few cases, the businesses have a narrow escape, wherein this policy is not mandatory for them, but they can voluntarily take it for themselves. This policy would also apply to the family members of the employer who are working for the company.
So in this article, you will get to know about those who are included in and exempted from the workers’ compensation policy in New York. Let’s dive into the topic, without further ado:
What is Workers’ Compensation Law in New York?
Before we get into the nitty-gritty of who is exempt from the Workers’ Compensation Law in New York, let’s first understand the law briefly. Workers’ compensation law is similar to insurance, wherein monetary benefits or medical care is given to the employees who have suffered injuries or have become ill as a result of their job or while they were on their jobs.
In other words, according to the New York Workers’ Compensation Board,
Workers’ Compensation Law requires that employers obtain and continuously keep in effect workers’ compensation coverage for all their employees.
The Workers’ Compensation Board is the state agency that directs employers to pay weekly cash benefits or medical care to the workers. If it is argued by the insurance carrier or the employer that the injury or illness is not work-related, then the worker might be entitled to claim disability benefits, which will be deducted from future workers’ compensation awards.
Who is exempt from Workers’ Compensation in New York?
Basically, you need to have workers’ compensation for those who primarily work for your business set-up in New York. But if you hire a worker only for a single project, who already has their LLC, then there’s no need for workers’ compensation for them.
The below businesses are exempt from workers’ compensation:
- A sole proprietorship, where the business is owned only by an individual without any employees (part-time/full-time), unpaid volunteers (including family members), and is not a corporation.
- A partnership with no employees (part-time/full-time), unpaid volunteers (including family members), or subcontractors.
- A corporation of one/two owners, where they hold all the stock and offices of the corporation, without any employees (part-time/full-time), unpaid volunteers (including family members), or subcontractors.
- Volunteers of non-profit organisations.
- Clergy and members of any religious organisations.
- Members of any athletic activities operating on a non-profit basis.
[Note: Such members shouldn’t work for any person/firm/corporation participating in such athletic activities.]
- Teachers of a non-profit religious/charitable/educational institute.
- People working non-manually for a non-profit educational/religious/charitable institute.
- People assisting any religious/charitable institute in return for charitable aid (Not hired).
- Spouse and minor children (under 18 years) of a farmer, unless under an express contract of hire.
- Certain employees of foreign governments and Native American Nations.
- New York City firefighters, police officers, and sanitation workers, are covered under the New York State General Municipal Law or other municipalities.
- People (minors also) who do everyday chores, including yard work in an owner-occupied residence, or non-profit/non-commercial organisation. (Note: The policy is needed if the minor handles power-driven machinery such as a power lawnmower.
- Real estate salespersons working as independent contractors.
- Media sales representatives working as independent contractors.
- Insurance agents/brokers working as independent contractors.
- Railroad/maritime/government workers.
Thus, if you have any of the aforementioned types of businesses in New York, you are exempted from the enforcement of Workers’ Compensation Law in New York.
Who needs to have a workers’ compensation policy?
Those individuals serving profit businesses are the ones who are covered under the workers’ compensation law. Such individuals are known as employees (including family members), who work under the supervision, direction, and control of an employer. These employees may be part-time, full-time, temporary, unpaid (volunteers/family members), or casual workers. All such types of employees have a right to the policy, and when the policy is in place, the worker cannot sue the employer for an injury or illness.
With that said, sole proprietorship or partnership businesses having any kind of employees must have the workers’ compensation law in force over their employees, no matter whether they are part-time, full-time, borrowed, leased, family members, or volunteers.
Hence, if you’re finding it difficult to ascertain whether you need to have a workers’ compensation policy in New York or not, then refer to the article above, which is a short guide on workers’ compensation law in New York. Note that if you don’t have the workers’ compensation law in New York, you might get in financial trouble and might have to pay $2000 as a fine in case the employee reports. Therefore, ensure that you’re aware of all the procedures before setting up a business in New York.