Starting a business in New York often requires a decent amount of time and money. You have to worry about things your never had to as a W-2 employee: payroll taxes, sales tax, payroll, cash flow, inventory, hiring staff and insurance just to name a few. In the flurry of ramping up, if you plan to hire any employees, one thing you do not want to forget is to secure the required amount workers’ compensation insurance.
What is it:
Workers’ Compensation insurance provides benefits to employees that suffer work related injuries. In most cases, the only way you can recover damages from your employer for work related injuries is through the workers’ compensation law; employees in all 50 states and federal employees are covered under this law. Workers’ Compensation claims do not allow employees to recover for punitive damages. Instead, they’re generally determined by the percentage of your wages.
Where can you get it:
There are an abundance of insurance companies that can sell you a workers’ compensation insurance. You can do a google search and see many different insurance companies or purchase it from the New York State Insurance Fund. An insurance broker can go over rates and answer any questions you may have. This is an essential step if you wish to hire employees.
What happens if you do not secure Workers’ Compensation Insurance:
If you have employees in the state of New York, you are legally required to secure Workers’ Compensation Insurance. Employers that fail to purchase such insurance are subject to fines and even criminal charges. In New York, an employer’s failure to secure workers’ compensation insurance can result in criminal charges, fines ranging from $1,000 to $50,000 and civil penalties of $2,000 for each 10-day period of non-compliance. This can all be avoided by purchasing the requisite amount of workers’ compensation insurance. For the sake of your sanity, if you have employees and have not already done so, please secure workers’ compensation insurance so you can focus on running your business and less time on administrative hearings.