If you are an employee in New York, you may be wondering whether you are eligible for workers’ compensation benefits. Workers’ compensation benefits provide weekly cash wage replacement benefits and medical coverage for workers who have been injured while on the job. In exchange for agreeing not to bring a lawsuit against the employer, a worker can begin receiving weekly cash benefits after becoming injured at work. However, not all employers are required to provide workers compensation benefits. Additionally, there are some exclusions as to which employees must be covered in New York.
Businesses Not Required to Provide Workers’ Compensation
The vast majority of businesses in New York must carry workers’ compensation insurance. There are several different options employers can choose to satisfy this requirement. They may choose to pay for a private insurance policy through an insurance carrier authorized to write workers’ compensation policies in New York.
They may choose to purchase insurance through the state insurance fund, which is a quasi-public insurance carrier. Some employers self insure by setting aside money to pay for claims should they arise. Finally, some employers are part of group self-insurance plans in which several businesses pool their resources together to pay for claims.
There are some legal exemptions to the requirement that businesses carry workers’ compensation insurance. In the following cases, a business does not need to carry workers’ compensation insurance:
- Sole proprietorships owned by one person without any employees
- Partnerships formed under New York’s law, such as (LLC, LLP, PLLC, PLLP, or RLLP) without employees other than the partners or members
- One and two-person corporations where one or two people own all of the stock, hold all of the corporate offices, and don’t have any other employees, and
- Nonprofit entities under IRS rules. The entity cannot have any compensated individuals except for teachers or clergy that provide any services
If you are an employee of a company, there is a significant chance that your employer is required to carry workers’ compensation insurance. There are very few circumstances in which a business does not have to purchase this type of coverage. If your boss refuses to review your claim or tells you they do not have workers’ compensation insurance. We recommend discussing your case with an employment attorney. Your employer may be required to pay you damages and pay penalties for violating New York employment law.
Executive Officer Exclusion in New York
As mentioned above, most employers must purchase a worker’s compensation insurance policy to cover workers who are made ill or injured while on the job. However, suppose you are an owner and executive officer of your company, and you only have one or two executive officers. In that case, you may be able to exclude yourself from workers’ compensation coverage. Some drawbacks come from opting out of workers’ compensation benefits that should be seriously considered.
Executive officers of a corporation are usually included for coverage under each state’s workers’ compensation laws. They will usually be covered unless they intentionally file for an exclusion from the insurance policy. Additionally, sole proprietors and partners are typically exempt from coverage but may choose coverage under the workers’ compensation policy.
Why Would an Executive Officer Opt Out of Workers’ Compensation Insurance?
There are several different reasons why executive officers or business owners will opt out of paying for workers’ compensation insurance, such as:
- The individual assumes that their personal medical insurance will be enough to cover them if they become injured at the workplace
- The individual thinks they are saving a significant amount of money by not having to pay the workers’ compensation premium by excluding themselves
- The individual assumes that they would never want to file a workers compensation claim against their own company, so they do not see the benefit of paying premiums on a policy they will never use
Drawbacks of Executive Officers Opting Out of Workers’ Compensation
There are some drawbacks to opting out of workers’ compensation coverage as an executive. An executive may assume that since they spend most of their time behind a desk, they are not at risk of becoming injured. Sometimes we assume that only people in dangerous jobs like construction work become injured on the job. However, if an injury does occur, the officer’s own health insurance policy will likely be excluded from coverage for work-related injuries. In other words, the executive who becomes injured may be surprised to find that his or her personal insurance company will not cover medical bills from an injury that happened at work.
Without workers’ compensation benefits, the cost of treating work-related injuries will have to be paid for by the company or come out of the executive officer’s pocket. With medical expenses increasing every year, paying for even a mild to moderate injury could end up being expensive. Choosing to be excluded from workers’ compensation insurance will save money that would have been spent on the premium. However, it also transfers risk to the employee and the corporate officer who chooses to opt out of coverage.
The risk of being injured while on the job is more significant than most people imagine. Many executives travel to and from work and two other meetings, putting themselves at risk. For example, suppose an executive in Syracuse frequently travels down to New York City for meetings. He becomes injured in a car accident on his way to the city that someone with minimal insurance causes. Instead of receiving weekly workers’ compensation payments for lost income and medical coverage, he is now involved in a fight between insurance companies.
Contact an Experienced New York Workers’ Compensation Attorney Today
Have you been injured while on the job in New York? Do you have questions about your workers’ compensation policy and whether you qualify? If so, the experienced attorneys at Stanley Law Offices are here to help. Contact us today to schedule your free initial consultation to learn more about how we can help you.