New York Workers’ Compensation Rules for Employers
New York requires workers’ compensation from your first employee. Who is excluded, where to buy the policy, injury deadlines, and what a lapse costs.
New York Workers’ Compensation
Who has to be covered, where the policy comes from, and the clocks that start when someone gets hurt
The question I get asked about New York workers’ compensation is almost always the wrong one. People ask how many employees they need before it kicks in, the way they would look for the number on overtime or family leave, and they assume a two person shop somewhere below it is fine.
There is no number. New York is one of the states where the obligation starts at the first person who works under your direction, and the state means it literally enough to count unpaid volunteers at a for profit business as employees. The penalty structure then multiplies by time rather than by headcount, so the cost of a misunderstanding grows every ten days it goes unnoticed.
This page is the New York specific rulebook: who has to be covered, which exclusions actually exist, the three places a policy can come from, what you post, the deadlines when someone is hurt, and what a lapse costs.
When Coverage Becomes Mandatory in New York
From your first employee. The New York State Workers’ Compensation Board states that virtually all employers in New York State must provide workers’ compensation coverage for their employees under Workers’ Compensation Law sections 2 and 3. No headcount threshold appears anywhere in that rule.
The test is not the job title and not the paperwork. An employee is a person, family members included, who performs under the supervision, direction, and control of an employer, on your premises or off them. Everything else follows from that single definition.
The Board applies it to eight working arrangements by name: part time, full time, temporary, seasonal, casual or day labor, leased, borrowed, and unpaid, which expressly includes volunteers and family members. A for profit business cannot have a volunteer in the legal sense. Someone doing free work for a company that exists to earn money is an employee who happens to be paid nothing.
Out of state employers get pulled in too. You need full New York coverage if you are required to register with the state Department of Labor for unemployment insurance, hold a permanent physical location or primary work site in New York, or operate under a state, county, or municipal permit, contract, or license.
The remaining triggers turn on the kind of work you do and where your people spend their time. Full coverage is also required if you work as a construction contractor or subcontractor in the state, or if in the previous year you had employees physically in New York at least 40 hours every week for longer than two consecutive weeks, or present there on 25 or more individual days.
New York City employers work from the same rulebook. Workers’ compensation here is state law administered by the Board, so there is no separate city program, no city filing, and no different threshold for a shop in Brooklyn than for one in Buffalo. Where the five boroughs do show up is at the licensing counter, because city agencies have to see documented proof of coverage before they issue a permit or a license.
Who Is Excluded From New York Coverage
New York excludes businesses that have no employees, not businesses that are small. Once you read the exclusions that way, the list stops looking generous. Every entry below describes an ownership structure or a narrow category, and most of them collapse the moment one person is hired.
| Category | Coverage required? | The actual condition |
|---|---|---|
| Sole proprietor with no employees | No | May voluntarily cover themselves under a policy. The first employee makes coverage mandatory. |
| Partners, LLC and LLP members, no employees | No | Partners and members are not employees for coverage purposes and may voluntarily cover themselves. |
| One or two person corporation | Conditionally no | Only if those individuals own all the stock and hold all offices, each holding at least one share, and there are no other employees, day labor, leased or borrowed workers, part time staff, other stockholders, unpaid volunteers including family, or subcontractors. |
| Corporation with three or more officers or shareholders | Yes | Also required where one or two officers do not own all the shares of stock. |
| Family members at a for profit business | Yes | Counted as employees whether the work is paid or unpaid. |
| Domestic workers in a private household | Yes at 40 hours | Required if employed 40 or more hours per week by the same household. Time at the residence including sleeping and eating counts, as does any time the employer requires the worker’s presence. |
| Casual yard work or occasional chores at a home | No | Applies to a one family, owner occupied dwelling. Coverage is required for minors operating power driven machinery, including power lawn mowers, or doing regularly scheduled chores. |
| Farm employees | Yes | Required for all farms with employees. A farmer’s spouse and children under 18 are not counted unless they work under an express contract of hire. |
| Casual and day labor at a business | Yes | Casual labor is named in the Board’s own list of covered arrangements. The household exclusion does not extend to a company. |
| Independent contractors | Depends on the facts | Decided by supervision, direction, and control. Construction and commercial goods transportation carry a statutory presumption of employment under the Fair Play Acts. |
| Volunteers at a nonprofit | No | The individual may not receive a stipend, room and board, or any other item with monetary value. |
| Clergy and teachers at a religious, charitable, or educational nonprofit | No | Applies to clergy performing only religious duties, teachers performing only teaching duties, and other staff working in a non-manual capacity. Anyone doing manual labor is covered. |
The one or two person corporation exclusion is the one that gets misread. Two officers are not enough on their own. They must own every share between them, each hold an office, and the company must employ nobody else in any form, including a weekend helper or an unpaid family member. It is a narrow gate, not a small business allowance, and bringing a relative into the business is usually what closes it.
Independent contractor status is the exclusion that fails most often, because it is tested after the injury rather than before it. Someone you schedule, supervise, and direct is an employee whatever the contract says.
Two industries reverse the burden entirely. Under the Construction Industry Fair Play Act, a worker performing services for a contractor is presumed to be that contractor’s employee unless the individual satisfies a three part independence test or runs a business that qualifies as a separate business entity under a twelve part test.
The Commercial Goods Transportation Industry Fair Play Act applies the same structure to drivers, with an eleven part entity test. In both trades you start out presumed wrong and have to prove otherwise.
Where to Buy the Policy in New York
New York gives employers three legal routes, and the Board lists them on its obtaining insurance page: a private carrier, the state fund, or self insurance. This is a competitive market, not a monopolistic one where only a state fund may sell the policy.
You can and should shop, because more than 200 private insurance carriers are authorized by the New York State Department of Financial Services, a figure the Board publishes on its workers’ compensation insurance page.
| Route | Who it fits | What it takes |
|---|---|---|
| Private insurance carrier | Most small employers | Buy through a carrier, broker, or licensed agent. More than 200 carriers are authorized by the Department of Financial Services, and they specialize by market, so quotes differ for the same class code. |
| New York State Insurance Fund | Any employer, including hard to place risks | A not for profit public carrier that also writes disability and Paid Family Leave. It must provide insurance to any employer seeking coverage regardless of business type, safety record, or size, and may decline only if the employer owes it money from a previous account. |
| Individual self insurance | Large, financially strong employers only | Board approval required. Three years in business, current coverage, no outstanding penalties, a Moody’s A3 or S&P A- rating or equivalent, tangible net worth above seven times the greater of three year average gross claims or annual premium, three years of clean audited financials, and a maintained safety program. |
The second row is the one worth remembering when a broker tells you the market will not take your class code. The state fund is a backstop with a statutory duty to write the risk, so a difficult industry, a young company, or a rough loss history does not leave you without a legal option.
The third row is not a realistic path for a team without an HR department, and one number explains why. Self insurance also requires a security deposit set by the Board, and the Office of Self Insurance puts the floor at $1,999,000 effective July 1, 2026, reviewed annually for adequacy.
Whichever route you take, the coverage has to be recorded against the right identity. The insurer notifies the Board electronically using your Federal Employer Identification Number (FEIN), and the Board treats that number as its primary identification for the business. A policy that exists but was filed under a stale or wrong FEIN can still read as a lapse on the Board’s side, which is why the first renewal is worth checking rather than assuming.
Class codes are the other thing to get right at the start rather than at the end. Premium is built from payroll by classification, so it moves whenever payroll does, including with each January step in the New York minimum wage. A wrong code skews every bill the same way until the carrier corrects it, and what that correction looks like is covered in our walkthrough of the workers’ compensation audit.
Proving Coverage for a Permit, License, or Contract
Any New York government entity issuing you a permit, license, or contract, city agencies included, has to see proof of coverage first. The Board accepts four documents, and which one you need depends on how you are insured rather than on what you are applying for.
| Document | Where it comes from | When it applies |
|---|---|---|
| Certificate of Workers’ Compensation Insurance, Form C-105.2 | Your insurance carrier | The ordinary case. The carrier sends the form to the government entity on request. |
| Certificate of Workers’ Compensation Insurance, Form U-26.3 | New York State Insurance Fund | The state fund’s own version of C-105.2, used when the policy is written there. |
| Certificate of Self Insurance, Form SI-12 or SIG-105.2 | The Board’s Office of Self Insurance, or your group self insurance administrator | Approved individual and group self insurers only. |
| Certificate of Attestation of Exemption, Form CE-200 | The Board, through New York Business Express | Only a business operating in New York with no employees, or an out of state applicant whose work is performed entirely outside the state. |
The CE-200 is the one that gets misused. It attests to a government agency that coverage is not required and does nothing beyond that: it cannot answer a Board notice about a period of noncompliance, and it cannot show another business or that business’s carrier that you are exempt. Each certificate covers one specific license, permit, or contract, and building permits need a separate certificate for each job.
Posting and New Hire Notices
New York handles employee notification through posting rather than through a handout. Workers’ Compensation Law section 51 requires employers to post and maintain, in a conspicuous place, a notice printed in English and Spanish stating that they have complied with the coverage requirement. That notice is Form C-105, the Notice of Compliance.
You do not download C-105 from the Board. It comes from your insurance carrier or licensed agent, because it carries your carrier name and policy details. That is the whole point of it: an injured employee reads the poster to find out who the claim goes to. The Board’s employer responsibilities page sets the fine for failing to post at $500 per violation.
There is no workers’ compensation pamphlet that New York requires you to give a new hire. If you are coming from a state that mandates a booklet in the onboarding pack, that duty has no New York counterpart, and the equivalent obligation is a poster that stays up permanently.
Two related notices work the same way, because the Board administers all three programs. Form DB-120 is the Notice of Compliance for New York State disability benefits, and Form PFL-120 is the equivalent for Paid Family Leave. Employers obtain both from their disability benefits carrier or licensed agent and post them in the business, the same way they post C-105.
One notice does exist on the medical side, though it is not a new hire document. It concerns the employee’s choice of doctor, because employers generally may not direct an employee to a particular health care provider.
If you want to recommend a provider, you must inform the employee of their right to choose their own Board authorized provider, using the Notice of Right to Select a Workers’ Compensation Board Authorized Health Care Provider, Form C-3.1. Exceptions apply to employers in a Preferred Provider Program or an approved alternative dispute resolution program.
Injury Reporting Deadlines
Two clocks start when an injury happens, and they belong to different people. The employee should give you written notice within 30 days of the accident under Workers’ Compensation Law (WCL) section 18, and has two years from the accident to file the Employee Claim, Form C-3, with the Board according to the Board’s claim filing instructions. Your own filing deadline is measured differently, and it is the one that carries a penalty.
According to the Board’s guidance on what to do when an injury happens, all injuries other than minor ones must be reported to the Board and the insurance carrier on or before the 18th day after the workplace injury or illness occurred, or within 10 days after the employer learns of the event, whichever period is greater.
| Who acts | What happens | Deadline | Source |
|---|---|---|---|
| Employee | Gives the employer written notice of the injury | Within 30 days of the accident | WCL section 18 |
| Employee | Files the Employee Claim, Form C-3, with the Board | Within two years of the accident, or two years from when the employee knew or should have known an illness was work related | Board claim filing guidance |
| Employer | Reports the injury to the Board and the carrier on Form C-2F | On or before the 18th day after the injury, or within 10 days after learning of it, whichever period is greater | Board injury reporting guidance |
| Employer | Reports most injuries and occupational diseases to the insurance carrier | Within 10 days after the accident | WCL section 110 |
| Employer | Completes Form C-2F for a minor injury and keeps it on file without sending it | At the time of the injury; retained 18 years | WCL section 110 |
| Employer | Reports the injured worker’s wages on Form C-240 | When the Board or carrier requests it to set the benefit rate | Board employer responsibilities |
| Employer | Reports a return to work or any change in pay or work status on Form C-11 | When the status changes | Board employer responsibilities |
The Board filing and the separate carrier notice in the table are counted differently, so they can fall on different dates. File with both the Board and the carrier by the earlier date and you meet both rules.
An injury counts as minor only if it required two or fewer first aid treatments and lost time came to less than one day beyond the end of the shift on which it happened. Below that line you may pay for the first aid yourself, complete Form C-2F, and file it in your own records rather than sending it. The record is the obligation; the submission is not.
Filing C-2F is not an admission. The Board describes it as a statement that an employee reported a work related injury or illness, not agreement with the facts, and you can note on the form that you believe a claim is questionable. Late filing, by contrast, is a misdemeanor, and the Board may impose a penalty of up to $2,500.
Retention runs on two different clocks. Records of employee numbers, classification, wages, and accidents are kept four years. Every C-2F or First Report of Injury stays on file for at least 18 years, minor injuries included, and both are open to Board review at any time.
Penalties for Going Without Coverage
New York enforces the coverage requirement with time as the multiplier, so the exposure grows while you are still unaware of the problem. The Board’s page on violations of the Workers’ Compensation Law notes that by the time a business receives its first penalty notice, the penalty may already exceed $12,000.
| Violation | Penalty | Citation |
|---|---|---|
| No coverage for 10 or more consecutive days | Up to $2,000 for each 10 day period of noncompliance, or no more than twice the cost of compensation for the payroll during the lapse | WCL section 52(5) |
| No coverage for five or fewer employees within 12 months | Misdemeanor, fine of $1,000 to $5,000 | WCL section 52(1)(a) |
| No coverage for more than five employees within 12 months | Class E felony, fine of $5,000 to $50,000, in addition to other penalties | WCL section 52(1)(a) |
| Second conviction within five years | Class D felony, fine of $10,000 to $50,000 | WCL section 52(1)(b) |
| Any lapse, or debt owed to the Board | Stop work order requiring the immediate stop of all business activity | WCL section 141-a |
| An uninsured claim is filed against you | All wage and medical benefits awarded, your own legal defense costs, assessments up to $2,000 per 10 day period, and the employee may also sue you directly | WCL section 26-a |
| Failure to keep accurate payroll records | Misdemeanor with a fine of $5,000 to $10,000; civil penalty of $1,000 per 10 day period; class E felony and $10,000 to $25,000 on a repeat within 10 years | WCL section 131 |
| Failure to post the Notice of Compliance | $500 per violation | WCL section 51 |
| Failure to file the First Report of Injury on time | Misdemeanor, plus a Board penalty of up to $2,500 | WCL section 110 |
| Deducting the premium from an employee’s wages | Misdemeanor | WCL section 31 |
Two mechanics make the headline numbers worse in practice. The first is imputed payroll, a figure assigned for you when your own records fall short. The Board does not need your cooperation to assess a penalty, only to assess an accurate one.
Imputed payroll applies if you cannot produce records sufficient for the Board’s Chair to determine your payroll for the penalty calculation. In that case, the weekly payroll for each employee, corporate officer, sole proprietor, or partner is set at the New York State average weekly wage multiplied by one and a half.
The second is personal liability. Sole proprietors, partners, and the president, secretary, and treasurer of a corporation are personally liable for the business’s failure to secure coverage. The corporate shield does not stand between an officer and this particular penalty.
There is one more consequence that only shows up later. A misdemeanor conviction, a civil fine, or a stop work order bars the business from bidding on public works contracts with the state for one year, and a felony conviction extends that debarment to five. If any part of your revenue is public sector work, a coverage lapse can end that line of business well after the fine is paid.
What to Do When an Injury Happens
When someone is hurt, get them treated, document what happened, file the injury report on time, and keep the paperwork moving until they are back at work. Work through the steps below in order: two of them carry statutory deadlines, and the wage report controls when your employee starts getting paid. Decide who owns each step before you need it, not during the week you do.
It also pays to know two related rules before you need them. If you keep paying wages or advance compensation to an injured employee, you may seek reimbursement from a later award, but only if you claim it before the Board makes the award, in writing or on the record at a Board hearing. And retaliating against someone for filing or attempting to file a claim is prohibited outright by Workers’ Compensation Law section 120.
Nothing here is intellectually difficult. What goes wrong at small companies is ownership: the certificate of coverage lives in an email, the incident notes live on a phone, and the eighteen year retention clock lives nowhere at all. An incident report template gives the first thirty minutes a fixed shape, which is most of the battle.
That documentation layer is what FirstHR holds: the policy and the subcontractor certificates in document management, the classification decision recorded on the employee profile rather than remembered, and the ten day filing turned into a dated task with an owner. We are not an insurer or a broker and we do not sell coverage. Buy the policy from a licensed New York agent or the state fund; keep the paperwork somewhere it can be produced.
If you employ people in more than one state, the thresholds move underneath you. New York starts at one employee, several states start at three, four, or five, and one leaves the whole thing elective. Wherever else you operate, the New York answer stays the same: your first hire needs a policy, a posted Notice of Compliance, and someone who owns the injury paperwork.
Frequently Asked Questions
Does a New York business with one part time employee need workers’ compensation?
Yes. New York sets no headcount threshold. The obligation attaches to the first person who performs under your supervision, direction, and control, and hours do not change the answer. Part time, seasonal, temporary, day labor, family members, and unpaid volunteers at a for profit business are all employees for coverage purposes.
Which owners and workers can be left off a New York policy?
Sole proprietors, partners, and LLC or LLP members with no employees are outside the requirement and may cover themselves voluntarily. A one or two person corporation is excluded only if those individuals own all the stock, each hold an office and a share, and the company has no other workers of any kind. Nonprofit volunteers and clergy performing only religious duties are also excluded.
Where do I buy workers’ compensation insurance in New York?
From a private carrier, from the New York State Insurance Fund, or through Board approved self insurance. More than 200 private carriers are authorized by the Department of Financial Services. The state fund must insure any employer that asks, regardless of business type, safety record, or size. Self insurance requires a minimum security deposit of $1,999,000 as of July 1, 2026.
What do I have to post, and does anything go to a new hire?
Post Form C-105, the Notice of Compliance, in a conspicuous place in both English and Spanish. You obtain it from your carrier or licensed agent, not from the Board, and failing to post carries a $500 fine per violation. New York requires no separate workers’ compensation pamphlet at hire.
How fast do I have to report a workplace injury in New York?
Anything above a minor injury goes to the Board and your carrier on or before the 18th day after it happens, or within 10 days after you learn of it, whichever period is greater. The employee’s own deadline is written notice to you within 30 days. Filing late is a misdemeanor, and the Board may add a penalty of up to $2,500.
What happens if I run without coverage in New York?
Up to $2,000 for each 10 day period without coverage, or twice the cost of compensation for the payroll during the lapse. Five or fewer employees uncovered inside 12 months is a misdemeanor; more than five is a class E felony. The Board may issue a stop work order, and corporate officers are personally liable.
Does calling someone an independent contractor remove the requirement?
No. Coverage turns on supervision, direction, and control rather than on the contract or the tax form. Construction and commercial goods transportation carry a statutory presumption of employment under the Fair Play Acts, with civil penalties of up to $2,500 per misclassified worker for a first violation.