Law Mandating Workers Comp Coverage for NY Employees in Effect

September 13, 2007 (PLANSPONSOR.com) - On Sunday a new law took effect that requires insured employers with any employees in New York to have workers compensation insurance policies providing full coverage in the state.

Business Insurance reports that previously, a multi-state employer could cover employees in New York under an “all states” endorsement to its workers comp policy unless the employer exceeded certain benchmarks, such as the amount of money its workers earned while in the state, according to Steve Carbone, head of education for the Workers Compensation Board’s Bureau of Compliance.

Now all insured employers must specifically state that they have coverage for New York workers under item 3A of a policy’s information page, Carbone said.

He noted there have been instances of out-of-state contractors failing to adequately insure when hiring New York-based subcontractors, and employers that are self-insured in other states, but not New York, must also comply with the new law.

The penalty for failing to comply is $1,000 for each 10 days that an employer does not have coverage. In addition, a noncompliant employer with five or fewer employees can be found guilty of a misdemeanor and fined an additional $5,000, and employers with six or more employees can be found guilty of a felony and fined an additional $50,000.

Employers without adequate workers compensation coverage can also be sued by an employee in civil court, according to the news report.

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