Short answer: Yes. The New York State Workers' Compensation Board says virtually all employers in the state must provide workers' compensation for their employees, including part-time staff, family members, borrowed and leased workers, and volunteers. The exemptions are narrow, mostly owner-only businesses with no employees. Out-of-state employers with workers in New York need New York coverage.
The rule
Under Workers' Compensation Law §§2 and 3, virtually all New York employers must provide coverage and post notice of it at each workplace (WCL §51). The Board's Employers' Guide adds a practical test: if people work under your direction and control, you probably have employees, whatever their tax status.
Who doesn't need a policy
The Board lists a short set of exemptions:
- Sole proprietorships with no employees
- Partnerships, LLCs, LLPs and similar entities with no employees other than the partners or members
- One- and two-person corporations where those individuals own all the stock and hold all the offices, with no other employees
- Nonprofits that don't compensate anyone for services, other than clergy or teachers
Hire one person outside those categories and the exemption ends.
Where coverage comes from
New York employers can buy from a private insurer authorized in the state, from the New York State Insurance Fund (NYSIF), or qualify for individual or group self-insurance. NYSIF must insure any employer that applies, regardless of business type, size or safety record, unless the employer owes NYSIF money. WCL §31 bars employers from deducting the cost of workers' comp from employees' pay.
Out-of-state employers
An out-of-state employer whose employees or subcontractors work in New York generally needs New York listed in Item 3A of its policy's information page. In limited situations, Item 3C coverage is accepted, with a consent form filed by insurers that aren't licensed in New York. Confirm which applies before sending crews into the state.
Separate requirements to remember
New York also requires most employers to carry disability benefits and Paid Family Leave coverage. Those are different policies from workers' comp, though many carriers and NYSIF offer both.
Bottom line
In New York, assume you need coverage from the first employee unless you fit one of the owner-only exemptions. See our workers' compensation insurance overview.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in New York.
Frequently asked questions
Is workers' comp required in New York for one employee?
Yes. Virtually all employers must provide coverage, including for part-time, family and volunteer workers.
Who is exempt from workers' comp in New York?
Sole proprietors and partnerships with no employees, one- or two-person corporations owning all stock with no employees, and certain uncompensated nonprofits.
What is NYSIF?
The New York State Insurance Fund, a public carrier that must insure any employer that applies unless it owes NYSIF money.
Can a New York employer deduct workers' comp from wages?
No. WCL §31 prohibits deducting the cost of coverage from employee pay.
Do out-of-state employers need New York coverage?
Generally yes, with New York in Item 3A of the policy; Item 3C is accepted only in limited cases.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.