New York Workers’ Compensation - The Complete Guide

New York State workers’ compensation is a mandatory insurance system for employers with one or more employees and protects employers in the event of on-the-job injury or illness. In the event of a workplace incident, employees will be covered for any costs relating to workplace injuries and illnesses, and employers are protected from potential lawsuits related to workplace incidents.

To maintain compliance with New York workers’ compensation laws, generally, all businesses must provide employees with workers’ compensation coverage, regardless of whether he or she are full-time, part-time, or seasonal employees.

New York Workers’ Compensation Overview

New York State Workers’ Compensation Law was first enacted in 1914 as a New York Labor Law and operates on the premise of a tradeoff in which employers assume all liability for injuries that occur during the course of employment, regardless of fault. In exchange, workers receive limited wage replacement benefits and are entitled to have necessary medical costs paid. Further, employees are prohibited from filing a lawsuit against the employer. 

New York State requires all employers to provide workers’ compensation insurance policies to workers through a private insurance carrier or a State Insurance Fund. Otherwise, businesses must self-insure. 

NY State Insurance Fund (NYSIF)

The New York State Insurance Fund (NYSIF) is a not-for-profit, public insurance carrier for the State of New York, with the mission to guarantee the availability of paid family leave, workers’ compensation, and disability insurance at the lowest possible cost for New York employers. The NYSIF serves as a guaranteed source of coverage for employers struggling to find coverage elsewhere due to the business being too high a risk for private insurance coverage.

Employers seeking coverage can purchase a policy through the NYSIF regardless of the type of business, safety record, or size. However, employers can be denied coverage if the business owes the NYSIF from a previous bill or account.

Which Employees are Entitled to Workers’ Compensation Insurance in New York State?

Employers of for-profit businesses and non-profit entities that compensate individuals for services must provide workers’ compensation coverage for all employees, including part-time, full-time, temporary, and seasonal workers, with a few exceptions.

Employees falling into the following categories are not covered by New York workers’ compensation:

• Employees of the Federal Government
• Self-employed individuals - also known as sole proprietors - are not required to have workers’ compensation coverage, but can still choose to get coverage
• LLCs, LLPs, and Partnerships that do not have employees
• One or two-person-owned corporations in which those individuals own all of the stock and hold all offices of the corporation
• Clergy or religious members performing only religious duties
• Members of supervised amateur activities operating as a non-profit
  
  • Members must not be engaged or employed by the person, company, or firm involved in the athletic activity in order to be exempt
• Teachers for a nonprofit institution with an IRS tax code that describes the nonprofit as religious, charitable, or as an educational organization
  
  • Teachers must only fulfill teaching duties to be exempt
• Individuals receiving charitable aid from religious or charitable institutions that perform work in return for the aid provided (cannot be under an express contract of hire), and certain individuals receiving rehabilitation services in a sheltered workshop
• Individuals engaged in non-manual labor for a non-profit institution described under the IRS tax code as a religious, charitable, or educational organization
• Executive officers of a non-profit corporation or unincorporated association described under the IRS tax code as religious, charitable, or as an educational organization, and that does not perform manual labor 

New York City Workers’ Compensation Coverage

The City of New York self-insures its workers’ compensation requirements for all covered city workers. All city employees are covered by workers’ compensation insurance except for the following:

• Uniformed police officers
• Firefighters
• Uniformed Sanitation workers

New York State Workers’ Compensation Reporting Process

If an employee is injured at work, he or she should submit a written notice within 30 days of the injury to the employer. If the employee fails to notify their employer within 30 days after the injury, he or she may lose workers’ compensation benefits.

Injured workers must then file an Employee Claim (Form C-3) to the Workers’ Compensation Board as soon as possible. Employees filing claims are required to notify the board of injury or illness within two years of the incident occurring. 

Additionally, employees filing on account of a repeat injury or illness must file a Limited Release of Health Information (Form C-3.3).

If an injury or illness occurred on the job and required medical treatment beyond first aid, or if an employee has lost at least one day of work other than the date the injury or illness occurred, the employer is required to notify the workers’ compensation insurance carrier within 10 days of the date of injury. 

Within 14 days of the employer notifying the insurance carrier of the injury or illness, the insurer provides employees with a written Statement of Rights (Form C-430S), as well as any other requirements for using pharmacy or diagnostic testing networks.

Within 18 days of the notification of injury or illness to the insurance provider, the insurer will then begin the payment of benefits if lost time exceeds seven days. 

Injured or ill workers approved for payments will receive continued payments for benefits every two weeks during the disability period. 

New York State Workers’ Compensation Benefits

In the event of a work-related injury or illness, employees may file a workers’ compensation claim and receive the following benefits:

• Compensation for lost wages caused by missing work
• Reimbursement for costs related to emergency and ongoing medical treatment, such treatments can include, but are not limited to:
  
  • Doctors visits
  • Surgeries
  • Treatments
  • Prescriptions
  • Hospital expenses
• Death benefits when the employee dies as a result of a work-related injury or illness (paid to the dependent(s) of the employee)
• In the case of loss of the permanent use of all or part of the employee’s shoulder, arm, hand, wrist, finger, leg, knee, foot, sight, hearing, or serious and permanent disfigurement on their head, face, or neck, then the employee may be entitled to A Schedule Loss of Use award (SLU).

New York State Workers’ Compensation Rates for 2025

The amount of weekly benefits an injured worker is eligible to receive is approximately two-thirds of the employee’s average weekly wage, up to a weekly maximum of $1,222.42 effective July 1st, 2025. The maximum weekly benefit updates on July 1st of each year.

Additionally, the rate at which benefits are paid to an injured worker is based upon the level (or “degree”) of disability on the medical reports.

Wage loss benefits will be payable on the eighth day after injury. Once the injured employee has missed 14 days of work, the employee may receive retroactive payments for the first seven days.

If an injured worker has a claim disputed by the insurer, he or she is eligible to receive disability benefits until the case is heard by a judge or the judge has ruled in the worker's favor. If the case has been won in favor of the worker, the disability benefits would be deducted from the worker's lost wages reward.

New York State Workers’ Compensation Posting Requirements

Employers must post a Notice of Compliance - Workers’ Compensation Law (Form C-105) in a place of business at all times. These forms can be obtained from the insurance carrier or a licensed NYS insurance agent.

A New York State labor law poster subscription service is a great way to ensure an organization has the proper posting requirements. 

Penalties for Non-Compliance for New York Workers’ Comp

Employers in New York State that are required to provide workers’ comp coverage will be subject to penalties if compliance requirements are not met.

Penalties include:

• Failure to secure coverage
• Misrepresentation
• Failure to maintain accurate payroll records
• Stop work orders
• Debarment
• Violation of the Fair Play Act
• Failure to report an injury

Employers in violation of New York workers’ comp laws may be faced with civil and criminal penalties. Fines may be assessed of at least $1,000, all the way up to $50,000, depending on the offense.

Workers’ Compensation Audits

In New York State, workers’ compensation premiums are based on the payroll estimate an employer provides at the beginning of the policy year. 

Workers’ compensation premiums can be affected if an employer misclassifies an employee. The New York State Construction Industry and the Commercial Goods Transportation Industry Fair Play Acts established legal guidelines for determining the status of workers as employees or independent contractors.

To ensure that the auditing process is as accurate as possible, it is important to have the proper records on hand.

Required Records for Workers’ Compensation Audits in New York State

When preparing for a workers’ compensation audit in New York State, it is important to have the following documentation ready:

• Payroll book/register
• Payroll tax returns
• Employee tax forms
• Cashbook / checkbook / day book with cash expenses
• General Ledger
• Income tax returns
• Certificates of insurance for subcontractors used
• Contracts, bills, and invoices (for labor, services, and materials)

Protect Your Employees & Safeguard Your Business

Running a business in New York State is not an easy job. Employers must ensure compliance all around and protect both the employees and the business from potential compliance risks related to workers’ compensation.

Get started by consulting a New York HR service provider and get the workers’ compensation insurance that suits your needs and safeguards your business.

Guest Author: Linda Walleshauser

Linda Walleshauser is a senior-level certified human resources professional at HR Services at EBC HR & Payroll Solutions, a leading New York Payroll and HR provider, serving businesses throughout New York State and beyond. Linda has successful experience in leadership roles as a human resources executive, trusted advisor, total rewards manager, and strategic consultant. Linda's expertise also extends to leadership experience in higher education, manufacturing, and healthcare organizations, as well as strategic planning with executive teams in all industries. Everyday, Linda effectively develops and implements HR policies that drive improvement in organizational culture, employee performance, and operating results. Known for her strategic focus in organizational development, benefits and compensation programs, recruitment and retention, contract negotiations, career development, systems management, and retirement programs, Linda is committed to community service through board membership and volunteerism for many non-profit organizations in the Western New York area.