According to the National Safety Council, every seven seconds a worker is injured on the job. As an employer, you have countless priorities to juggle each and every day – the safety of your workforce is likely right there at the top of the list. To achieve a safe workplace, you spend hours developing a comprehensive safety program, host mandatory trainings, and promote safety best practices at every turn. But the truth is, no matter how proactive you are, no organization is immune to workplace risk. Enter workers’ compensation insurance.
Because workers’ compensation can often feel like a maze of a topic, we cut through the noise to give you a rundown on what you need to know to stay compliant with the New York State Workers’ Compensation Law. Here we go!
First Things First: Workers’ Compensation’s History in New York
The roots of workers’ compensation regulations in the U.S. can actually be traced back right here to New York and one of the deadliest industrial disasters – the Triangle Shirtwaist Factory fire. When a fire broke out in the cramped factory in 1911, many employees were unable to escape due to locked exits meant to prohibit unauthorized breaks and theft. 146 people died in the fire that day, sparking critical reformations to labor regulations including the initiation of the workers’ compensation system.
Flash forward to present day and workers’ compensation is a critical aspect of fair labor practices. Protecting both businesses and their employees, workers’ compensation exists as insurance that provides wage replacement and medical coverage to workers who were injured on the job. While specific mandates vary by state, New York has strict workers’ compensation regulations with very few exceptions for employers. Essentially, if your business has employees, you need workers’ compensation coverage. Below is a quick list from the New York State Workers’ Compensation Board detailing the events covered by this insurance:
- Medical care needed to treat an on-the-job injury
- Short-term disability payments to replace lost wages
- Permanent disability payments if the injury has permanent effects
- Legal representation for the employer
- Protection for the employer against lawsuits pertaining to on-the-job injury/illness
Who Are the Major Players of Workers’ Compensation in New York?
There are a handful of major players when it comes to New York State Workers’ Compensation Law, and the first is the Workers’ Compensation Board. The board oversees workers’ compensation regulations in the state of New York, working to ensure that all employers are compliant. The board has a handful of tools at their disposal to monitor for compliance, including a database, investigators, automatic penalties, requirements for permits and licensure, and more.
The second player in the New York workers’ compensation game is the New York State Department of Financial Services. The department authorizes insurance carriers to develop workers’ compensation policies in the state. Next is the New York Compensation Insurance Rating Board which collects all data from the insurance carriers and uses it to develop fair workers’ compensation rates.
Insurers are the final major player in the system. Employers have a handful of choices available when it comes to workers’ compensation insurance, including; private insurance carriers, the State Insurance Fund, self-insurance (must be approved by the board), group self-insurance, and insurance through a PEO (we’ll get into this soon!).
What Happens If You’re Not Compliant?
As mentioned, there are very few workers’ compensation exemptions in the state of New York. If you think your business might need it, chances are that you do. While workers’ compensation protects businesses just as much as it protects workers, some smaller organizations may be tempted to overlook the regulation – not a good idea.
The state of New York imposes some hefty fines for non-compliance with workers’ compensation law. Businesses can expect to be fined $2,000 for every 10-days that they’re without adequate insurance and they’ll meet additional penalties if they try and tweak payroll records, pay employees under the table, etc. Fines aside, non-compliance can have serious criminal implications. In the state of New York, if businesses have five or more employees but no workers’ compensation insurance they can expect to be charged with a felony. Plus, if a workplace injury occurs during an uninsured period, the business owner must personally pay for lost wages and medical care. The list of potential risks and their associated costs just goes on.
How Can a PEO Help?
Navigating New York’s workers’ compensation laws and mitigating risk for your business can be daunting, but you don’t have to do it alone. Partnering with a Professional Employer Organization (PEO) like Ethan Allen HR Services can take much of the burden off of you and your teams. A PEO acts as a co-employer to your employees, handling payroll administration, administering benefits, and, you guessed it, maintaining workers’ compensation coverage for your workforce.
A PEO doesn’t just save you time but will act as a true HR consultant, helping you navigate complex employer laws. At Ethan Allen, we even help our clients develop the comprehensive safety processes that are critical to reducing workers’ compensation claims in the first place.
When overlooking workers’ compensation is like playing a game of Russian Roulette, it pays to have someone in your corner helping you stay compliant.