Workers’ Compensation Insurance Is Mandatory For Employers In New York

March 18, 2016 — by William Crossett

In New York State, anyone with an employee is required to carry Workers’ Compensation insurance. The Workers’ Compensation Board can find you to be an employee, even if you signed a contract calling you an Independent Contractor.

If you are a sole owner or stockholder of a company, you do not need insurance for yourself, although it is required for your employees. Additionally, the owners or stockholders are entitled to opt in or out of coverage. Independent contractors that have no employees are not required to have Workers’ Compensation insurance.

Independent Contractor

Sometimes, people who do not want to be considered an Employer try to create an “independent contractor relationship” with the people performing services for them. An independent contractor, if working by themselves, is not required to carry Workers’ Compensation insurance. Meaning that if you are injured while working as an independent contractor, you are not entitled to medical and Lost Wage Workers’ Compensation benefits.

Definition Of An Independent Contractor

Simply because you are called an independent contractor does not mean that the Court will accept this arrangement. This can be true even where there is a written contract calling you an independent contractor.

The Court looks at the level of control and other important factors to determine whether you are a true independent contractor. If, after considering all the factors, the Court finds that the relationship fails to meet the criteria of a true independent contractor, then the Court will deem an Employee-Employer relationship exists. Such a decision means that you are entitled to both medical and wage benefits under the Workers’ Compensation Law.

This typically occurs where the injured party is required to sign a contract stating that they are an independent contractor. The law looks at the bargaining power, the actual control over the worker, and other relevant factors in making their determination. This most commonly arises with drivers, delivery workers, hairdressers, care givers, and other personal service providers. Given the nature of some work, certain groups will try to avoid the Workers’ Compensation Law.

Uninsured Employers Fund

Under New York State Workers’ Compensation Law, if your Employer does not have Workers’ Compensation insurance, a unique type of Workers’ Compensation case is commenced. The New York Law established the Uninsured Employers’ Fund to administer and pay both Medical and Lost Wage Benefits for these kinds of cases.