Workers’ compensation requirements in New York can make employers feel like they’re walking through a legal maze. Between ever-changing regulations, complex paperwork, and the potential penalties for even innocent mistakes, employers need a clear roadmap.
Mosey created this guide to help you understand exactly what New York workers compensation laws entail, what they require from your business, 2025 updates, and the steps to ensure total compliance without causing you unnecessary expenses and aggravation—or worse.
New York Workers’ Compensation: An Overview for Employers
Workers’ compensation insurance isn’t just another regulatory requirement—it’s the foundation of workplace safety and security in New York State. This insurance system creates a safety net for workers while protecting business owners from potentially devastating liability claims.
What is Workers’ Compensation in New York?
At its core, New York workers’ comp is a no-fault compensation insurance system. It provides medical care and wage replacement benefits to workers who suffer work-related injuries or illnesses. In exchange, employers receive protection from most employee lawsuits related to workplace injuries.
The “no-fault” aspect of benefits is crucial. It means insurance benefits are paid regardless of who caused the accident—whether it was employer negligence, employee error, or just bad luck. This streamlined approach helps injured workers get care quickly without lengthy legal battles.
Who Needs Workers’ Comp Coverage in New York?
The short answer? Almost every employer needs workers comp insurance.
More specifically, if you run a for-profit business in New York with employees, you need workers’ compensation insurance. This includes:
- Businesses with just one part-time employee
- Companies using seasonal or temporary workers
- Family businesses with non-owner relatives on payroll
- Out-of-state companies with employees working in New York
However, there are a few limited exemptions. Sole proprietors with zero employees don’t need workers comp insurance coverage. Neither do out-of-state businesses with no physical operations in New York. For New York City government workers, special benefits rules apply—most are covered, except police, firefighters, and sanitation workers, who have separate systems.
Ultimately, the law doesn’t care about your company size, industry, or how long you’ve been in business. From day one of hiring your first employee, workers comp coverage is mandatory.
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2025 Updates to New York Workers’ Compensation Laws
To make matters even more complex, the workers compensation landscape in New York changed significantly in 2025. Several key updates now impact how employers handle their programs.
Minimum Wage and Benefit Increases
While not directly part of workers’ compensation law, minimum wage increases affect your workers comp insurance premiums because they’re calculated based on payroll. As payroll rises with minimum wage hikes, so do your New York workers compensation insurance costs.
As of 2025, minimum wages rates are $16.50 per hour in New York City, Long Island, and Westchester County, and $15.50 per hour for the rest of New York State. Note, however, that minimum wage rates are set to increase annually starting in 2027, tied to inflation through the Consumer Price Index.
Changes to Assessment Rates
Here’s some welcome relief for business owners: assessment rates dropped from 9.2% in 2024 to 7.1% in 2025. This 22% reduction translates to approximately $191 million in savings for New York businesses collectively.
Additionally, the New York State Insurance Fund (NYSIF) now requires digital premium payments and application processing for all policies. While this means a slight learning curve for some businesses, the streamlined process ultimately reduces paperwork and processing times.
New Paid Prenatal Leave Requirements
As of January 1, 2025, employers must provide 20 hours of paid prenatal leave annually to pregnant workers. This requirement intersects with workers’ compensation by creating additional workplace absence provisions that employers need to coordinate with existing disability policies.
This new requirement applies to all employers regardless of size and can’t be denied to qualifying employees.
Expanded Mental Health Coverage
Perhaps the most significant change for 2025 is the expansion of mental health coverage. Before, only first responders could file benefits claims for work-related stress or PTSD.
Now, all New York workers are eligible to submit claims for mental health conditions affecting workers and triggered by workplace circumstances. Importantly, workers no longer need to prove their stress exceeds “normal work environment” thresholds—a previous barrier that prevented many legitimate benefits claims.
For employers, this means:
- Increased attention to workplace mental health resources
- Potential premium adjustments in high-stress industries
- Greater importance of stress-prevention programs
- The need for proper documentation of all workplace incidents
An important caveat for employers and workers—claims must demonstrate that a mental health condition resulted from a distinct work-related event or events.
Employer Requirements for NY Workers’ Compensation Insurance
As you might have guessed, understanding and fulfilling your legal obligations is non-negotiable. Here’s what New York demands from every employer.
Mandatory Coverage Rules, Statute of Limitations, and More
The rules are straightforward but strictly enforced:
- Purchase adequate workers comp coverage before your first employee’s start date
- Post the Form Notice of Compliance (Form C-105) with complete insurer details in a visible workplace location
- Post the Disability Benefits Coverage notice (Form DB-120)
- Report injuries within strict timeframes: 10 days for employers and 30 days for workers
Although there’s a two-year statute of limitations for filing a workers’ compensation claim (two years from the date of injury or from when the worker became aware of an occupational disease), these four requirements apply from day one.
Need the updated Notice of Compliance? Or any other labor law posters, for that matter? Mosey makes it easy to automatically gather and share all the right posters for each state.
This is an area where such ease and efficiency are at a premium since New York provides no grace period for new businesses or small employers. In fact, these forms must be posted in areas frequented by employees, typically near other labor law posters. Missing or outdated notices can trigger automatic penalties during inspections.
Exemptions and Special Cases
While workers comp coverage is nearly universal, certain workers fall outside standard requirements:
- True volunteers (receiving no compensation of any kind)
- Certain family members working in family-owned businesses
- Legitimate subcontractors (but be extremely careful with this classification)
The most misunderstood exemption involves independent contractors. To qualify as exempt, workers must meet ALL the following criteria:
- Free from control and direction in performing their work
- Customarily engaged in an independent business offering similar services
- Performing work outside the usual course of the employer’s business
Remember, the burden of proof regarding employee status falls entirely on New York employers, not workers.
Obtaining Workers’ Comp Insurance in New York
Securing proper coverage doesn’t need to be complicated. New York offers multiple options to fit different business needs.
Private Workers Comp Insurance Carriers
Most small to mid-sized businesses opt for private compensation insurance carriers, finding premium costs varying based on:
- Industry classification and associated risks
- Payroll size
- Claims history
- Safety programs and workers risk management measures
Working with a knowledgeable compensation insurance broker can help you find the most competitive rates while ensuring adequate coverage for your workers.
New York State Insurance Fund (NYSIF)
The NYSIF is the compensation insurance carrier of last resort in New York, guaranteeing workers comp coverage for any business regardless of risk level. This makes it particularly valuable for:
- High-risk industries often rejected by private carriers
- New businesses without established safety records
- Companies recovering from previous benefits claims issues
To apply, you’ll need to complete a digital application and provide five years of loss runs (if applicable).
Self-Insurance Options
For large enterprises, self-insurance may offer cost advantages. However, the typical qualification requirements are stringent:
- Minimum $7 million net worth
- Fully audited financial statements
- Proven risk management programs
- Significant cash reserves for potential claims
Self-insurance isn’t practical for most businesses, but for large corporations with predictable compensation insurance risk profiles, it can provide substantial savings and flexibility.
Penalties for Non-Compliance with NY Workers’ Comp Laws
The consequences of non-compliance can be severe, potentially threatening your business’s survival.
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Financial Consequences
Monetary penalties escalate quickly:
- For businesses with five or fewer employees: $2,000 per 10-day period without workers comp coverage, plus twice the cost of compensation that should have been paid
- For businesses with more than five employees: Same financial penalties as above, plus potential business closure
These penalties accumulate rapidly, often exceeding what compliance would have cost in the first place.
Legal Ramifications
Beyond civil penalties, non-compliance can trigger criminal charges:
- Misdemeanor charges for smaller businesses ($1,000-$5,000 fines plus possible jail time)
- Felony charges for larger businesses ($5,000-$50,000 fines and higher likelihood of incarceration)
- Contempt charges for violation of stop-work orders
Obviously, criminal convictions can permanently impact your ability to run a business or obtain government contracts.
Business Closure Risks
The most immediate threat is the stop-work order—essentially, a forced business closure until a business is in compliance. Every day under a stop-work order means:
- Lost revenue
- Daily penalties of $1,000-$5,000
- Damaged client relationships
- Employee departures
Recovery from even a brief closure can take months—if possible at all—for businesses with tight margins.
Compliance Best Practices for NY Employers
Truly flourishing in compliance responsibilities goes far beyond just meeting minimum requirements, though. Implementing these practices will help you turn compliance into an actual advantage, all while minimizing costs and disruptions.
Staying Up-to-Date with Regulatory Changes
Workers’ compensation laws evolve constantly. To stay current:
- Monitor the Workers Compensation Board website for updates
- Subscribe to regulatory newsletters from industry associations
- Attend relevant seminars and webinars (many are free)
- Consider annual compliance reviews with your compensation insurance provider
The small time investment in staying informed prevents costly surprises later. This is yet another area where Mosey makes your life immeasurably easier by automating regulatory change notifications and helping you address notices in a timely fashion, ensuring you’re always dealing with the most up-to-date regulations.
Proper Employee Classification
Worker misclassification is the most common compliance mistake. Implement quarterly classification audits to identify:
- Contractors who should be classified as employees
- Unreported payroll or off-the-books compensation
- Workers performing tasks outside their classified risk category
When an employee’s duties change, immediately update their classification to avoid retroactive premium adjustments for comp insurance during audits.
Timely Reporting and Claims Management
Prompt, thorough documentation reduces benefits claims costs and prevents penalties:
- Use the WCB Online Forms Portal for all C-3 compensation claim submissions
- Implement automated payroll verification through tax form integrations
- Create a standardized internal injury reporting system with clear responsibilities for the entire compensation claim process
- Document all workplace incidents, even minor ones that don’t result in immediate benefits claims
Regarding that last point, you should also maintain records of workplace incidents falling under the 2025 mental health coverage expansion that could potentially lead to stress-related benefits claims for workers.
Resources for NY Workers’ Compensation Compliance
Lastly, organizations doing business in New York have several resources to help navigate these often thorny compliance requirements.
New York State Workers’ Compensation Board
The WCB should be your first stop for official guidance:
- Benefits claims Information: (877) 632-4996
- Compliance Questions: (866) 396-8314
- Online Resources: www.wcb.ny.gov
The Compensation Board offers employer-specific workshops and webinars throughout the year, many at no cost.
Industry Associations and Support
Your industry association likely offers specialized resources tailored to your business type:
- NYSIF Online Portal: www.nysif.com
- Business Council of New York State: www.bcnys.org
- Industry-specific organizations with compliance resources
These organizations often provide templates, checklists, and peer networking opportunities to share best practices.
Professional Consultation Services
Consider periodic professional reviews to ensure continuous compliance:
- Annual premium audits with your comp insurance provider
- Quarterly payroll verification through your accountant
- Biannual policy reviews with a licensed comp insurance broker
While these services involve some cost, they’re substantially cheaper than addressing compliance failures after they occur.
Stay Compliant with Mosey
Navigating New York’s workers’ compensation requirements isn’t optional—it’s essential for legal operation and business protection. By understanding your obligations, staying current with regulatory changes, and implementing smart compliance practices, you can maintain full compliance while minimizing administrative burdens and costs.
However, you still have a business to run. That’s why Mosey is such a valuable compliance partner, automating those time-consuming but essential tasks so you can focus on steering the ship. Want to find out more about the many ways Mosey simplifies multi-state compliance? Then request a demo today and see what a difference Mosey can make.
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- SHIELD Act: Compliance Guide for New York Employers
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