New York law requires that all employers carry a form of NY workers compensation insurance to protect employees in the event that an accident occurs at the workplace. Although there are exceptions to this rule, they are very limited. All employees including full-time, part-time, and family members who are employed will be covered under the business’s workers comp policy, so be sure to include all employees’ payroll on your policy application.
It is important to provide the correct payroll amounts for each employee when submitting an application for workers comp insurance to assure you are receiving the best possible premium rate. Premiums are calculated by using the payrolls given times a standard classification rate provided by the state. These rates are determined by what type of job your employee will be doing at work. Clerical employees have a much lower rate than, say, roofing construction workers. Clerical employees usually stay within an office and don’t prove to be very risky. Roofers, on the other hand, are up on high places in the elements for days on end. The lower the risk, the lower the class rate will be.
If your company is an LLC or a Sole-Proprietary, be sure to have documentation from all outside sub-contractors so you won’t be charged with their payroll. Many times, accidents at the workplace happen and are wrongfully charged to a contractor simply because they can not produce proof of insurance for the injured party. An employer who fails to produce proof of insurance can be charged a penalty of $2000 per every 10 day period of non-compliance, plus the actual award. There could also be a penalty if the Board deems it necessary for noncompliance with the law. To reduce fines and unnecessary paperwork, require documentation from your sub-contractors before any work is started and be sure your NY workers compensation policy coverage is adequate.