Why Workers Compensation is Essential to Business Owners

work injury warning sign illustration design over a white background

Workers compensation insurance is essential to any business and that’s because it protects its employees and employers against financial loss in the event of injury. Every company out there needs to provide its employees with workers compensation benefits. In this regard, employees can include most subcontractors, family members, part timers, volunteers, borrowed staff, leased staff and day labor. If you’re a business owner and you’d like to learn more about workers compensation, please visit www.WCB.NY.Gov. There you’ll be able to download the Employers Handbook, a useful resource that lets you know everything about workers compensation.

Who Needs Insurance?
  1. Employees in any for profit organization.
  2. Live-in maids, companions, sitters and domestic workers employed forty hours per week in a residence.
  3. People working at farms who got paid at least $1,200 dollars or more for farm labor in the previous calendar year.
  4. The majority of workers who are compensated by nonprofit organizations.
  5. Any other laborer the Workers Compensation Board ascertains is an employee. It’s illegal for employers to discriminate against a worker who testifies or files in a workers’ compensation case.
Who Doesn’t Require Insurance?

Individuals in partnerships (including RLLP, PLLP, PLLC, LLP, LLC AND LP) and sole proprietors and 1 or 2 person corporations where all stock is owned by them (at least 1 share each) and hold all corporate offices don’t necessarily need to get coverage for themselves if they have no one working for them.

Independent Contractors
Regardless of their tax status, people who are under your direct control can be considered your employers for workers compensation purposes. There’s also a widespread belief that independent contractors aren’t required to get workers compensation insurance, but that’s completely false. The need for workers compensation insurance is not determined by a worker’s tax status. This means that a company may require insurance even for 1099 staff.

Getting Insurance
Private Insurance: In NYC, there are hundreds of private insurance carriers that can offer workers compensation insurance coverage.

State Insurance Fund:
The NYSIF also writes workers compensation insurance. To learn more about this, please visitNYSIF dot com.

Individual Self-Insurance: Through a regulated and formal process, large companies can set aside funds for self insurance.

Why Comply with the Law?
  1. For every ten days without insurance, there’s a two thousand dollar penalty. There are also penalties for record keeping failures, employees and misrepresenting payroll.
  2. When you’re insured, employees are unable to sue you for work related illnesses or injury.
  3. For uninsured workers, business owners are required to pay medical care and lost wages. Death and permanent total disability benefits aren’t capped.
  4. Businesses and people who’ve been penalized are unable to win public work jobs.
  5. The Board is actively pursuing scofflaws and has managed to issue more than seven thousand stop work orders.
  6. In a company with more than 5 employees, failing to carry workers compensation insurance is a misdemeanor or felony.

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