Are you an employer with employees working in New York State? If so, you need New York Disability Insurance for your employees. Disability insurance provides cash benefits to a worker who is disabled by an injury outside of work or who can’t work due to pregnancy. It’s different from Workers’ Compensation, which covers on-the-job injuries.
It’s important to make sure you maintain disability insurance coverage because the penalties for not having it can be high. Depending on the number of eligible employees you need coverage for, it can be very affordable (less than $100 per year for some businesses).
What Does New York Disability Insurance Cover?
- Provides weekly cash benefits for workers injured outside the course of their work
- 50 percent of their average weekly wages up to a maximum amount (the current limit is $170 per week)
- Provides benefits for 26 weeks out of every consecutive 52 weeks
- Companies can (but don’t have to) deduct up to 60 cents per week from employees’ wages for disability insurance to help with the cost of the policy
Who is Required to Have New York Disability Insurance?
You are required to have New York disability insurance if you are an employer with employees in New York State who have worked for at least 30 days in one calendar year. There are some specific industries and situations where employers are not required to maintain disability coverage, including:
- Government, railroad, maritime and farm workers
- Some religious positions (rabbis, priests, etc.)
- Volunteers for non-profit organizations
- Independent contractors
If you work with independent contractors before you assume you don’t have to provide coverage for them, make sure that they meet the requirements of an independent contractor. Otherwise, a judge could determine that they are actually employees who should have been covered. If you are not sure if your employee is an independent contractor, keep in mind that an independent contractor has their own company, controls when and how they perform work for you, and performs work for different businesses under specific contracts.
How to Get Coverage for Your Employees
Employers have a few different options for obtaining disability insurance. You can choose a commercial insurance plan from any company authorized to provide disability insurance or a plan offered by the New York State Insurance Fund.
Some employers opt to get approval for self-insurance, maintaining the necessary funds for covering disability claims on their own and keeping a security deposit on file with the Workers’ Compensation Board.
Employers can use payroll deductions to offset some of the costs of providing disability benefits. You may choose whether or not you want to collect employee contributions.
Penalties for Lack of Coverage
The Workers’ Compensation Board determines whether employers are required to have disability insurance and levies penalties for noncompliant companies.
According to the New York State Workers Compensation Board, penalties include:
“…1/2 of one percent of the employer’s payroll during the period of noncompliance PLUS an additional sum of $500 for each period of noncompliance.”
“…a fine of not less than $100 nor more than $500 or imprisonment for up to one year or both. A second violation of the Law within five years may result in a fine of not less than $250 nor more than $1,250. A third or subsequent violation of the Law within five years may result in a fine of up to $2,500.”
Given the reasonable costs of maintaining disability insurance coverage and the seriousness of the penalties, it makes financial sense to determine whether you are required to have coverage, choose a plan that works for you, and make sure to keep your coverage up-to-date.
At InsureYourCompany.com, we can help you navigate the requirements of New York State Disability Insurance and work to get you the affordable coverage you need. Don’t risk serious penalties by ignoring this requirement – contact us and get covered today.