Workers’ comp insurance is a legal requirement for most New York employers. According to New York State law, these employers must carry workers’ comp insurance to cover injured employees who get hurt on the job.
Still, all insurance costs money, and you might be wondering how much workers’ comp insurance costs so that you can budget accordingly. To answer this question and others like it, we’ve broken down the entire process below.
If, however, you would like to speak with an experienced workers’ comp attorney directly, please contact Schwartzapfel Lawyers today at 1-516-342-2200 or visit us onlineto schedule your free consultation.
Is Workers’ Comp Necessary?
According to the National Council on Compensation Insurance (NCCI), it is required by law for almost all NYS employers to carry workers’ comp insurance. More specifically, if you are an employer in New York State, you will likely need to have workers’ comp insurance coverage for all of your workers.
In essence, if you operate a for-profit business of any kind, your employees need to be protected by workers’ compensation insurance.
Moreover, if one of your employees is injured in the workplace, their medical bills can be high. The insurance company foots the bill if you have workers’ comp insurance coverage. Workers’ compensation benefits make paying for medical expenses much simpler for all involved parties, and it also serves as an attractive perk for new top candidates you may wish to hire for open positions.
Small business insurance sometimes bundles coverage for workers’ compensation claims for work-related injuries. Workers’ compensation insurance costs are nothing compared to the cost of workers who leave your business for others that follow workers’ compensation laws.
Penalties for Not Having Workers’ Comp Insurance
In addition to the benefits of having sufficient workers’ compensation insurance coverage for your employees, business owners should have coverage to avoid certain legal penalties.
If you are non-compliant with workers’ compensation coverage laws in New York, you could be fined as much as $2,000 for every 10-day period each employee goes without coverage. It’s common for employers to be billed $12,000 or more by receiving their first penalty notice because of this timeline.
After you receive a penalty notice, you have (30) days to request a review if necessary or to explain why there was a lapse in coverage. Regardless, getting workers’ comp insurance coverage at the earliest opportunity is almost always better. If necessary, you can rely on insurance agencies to find the best deal for workers’ comp coverage based on your industry and other factors.
How Much Does Workers’ Comp Cost in New York?
The multi-thousand dollar question for many business owners in New York is how much workers’ compensation insurance coverage costs. There’s no single, universally applicable answer for every business and enterprise in the Empire State.
Instead, workers’ compensation insurance coverage costs can vary heavily from business to business and industry to industry, depending on the type of work. That said, the average estimated rate for workers’ comp insurance coverage in New York is $0.07 per $100 in payroll for low-risk jobs. It skyrockets to $29.93 per $100 in payroll for high-risk jobs.
Simply put, your business can expect to pay much more for insurance coverage for your employees if it operates in a high-risk industry like construction. The more likely your workers are to be injured on the job, the more you’ll pay in insurance each month and workers’ comp premiums.
Furthermore, as a loss cost state, New York’s Rating Board issues new manual rates for all workers’ compensation coverage each year. The average price of workers’ comp insurance payments increases yearly around October 1. With this in mind, you’ll need to incorporate these costs into your business billing and accounting office.
Do Employees Pay Anything?
Employees do not help you pay for your workers’ compensation coverage. The point of workers’ compensation insurance coverage is to protect employees from going bankrupt and/or suffering other severe financial harm should they be injured on the job.
Furthermore, if your business decreases worker wages after being forced to take out a workers’ comp policy, you could be sued and found liable for damages. This is because it is not legal for employers to offload the costs of workers’ compensation onto their employees.
That being said, if you or a loved one is being forced to pay for insurance coverage as an employee, Schwartzapfel Lawyers can help. Call us today at 1-516-342-2200 for a free consultation, case evaluation, and so much more!
Factors That Affect Workers’ Comp Insurance Costs
A number of factors can affect workers’ comp insurance costs for a given business. These factors include but are not limited to:
- Payroll. Generally, the higher your annual payroll, the more employees you have, which will probably impact your workers’ comp rates. Businesses with fewer employees are expected to bring in less money, so they face lower rates. Furthermore, businesses with fewer employees on their payroll can expect to have fewer workplace injuries every year, unless they operate in a high-risk industry.
- Number of employees, as explained above. The more employees you have, the higher your workers’ comp rates will usually be since you can expect more average incidents per year, even in low-risk industries.
- Location. If your business or your workers operate in a high-risk location, like a hazardous facility or site, you could expect higher workers’ comp insurance costs overall.
- Your industry and risk factors. As noted earlier, high-risk industries like construction result in higher workers’ comp rates across the board. Low-risk industries, like the service industry, result in lower workers’ compensation insurance rates on average.
- Coverage limits. If you have high coverage limits that cover most medical care or medical treatments, you’ll have to pay more on a per-month basis and pay higher workers’ compensation insurance premiums. Still, this may prevent your business from having to foot the bill for exorbitant or very high employee medical bills.
- Claims history. Like other insurance industries, the workers’ compensation insurance industry partly bills you based on your claims history. If your business routinely has injured employees, your workers’ comp insurance rates will likely go up as it may indicate a lack of workplace safety procedures on your part.
The unique intersection of these factors means that each business has a unique workers’ compensation insurance rate. On top of that, your insurance rates can vary from year to year because of the above-mentioned loss cost state policies.
Are There Ways to Save Money on Workers’ Comp?
While many business owners worry about finding ways to pay for necessary workers’ comp coverage, keep in mind that there are ways to save money.
For example, you can classify your employees correctly. If an employee has a desk job, for example, they have a much lower risk of injury than a delivery driver or other employee. Thus, you’ll pay less for that employee’s insurance coverage than another’s. Following the correct classification codes can also help avoid misclassification fees and fines.
You can alternatively purchase another type of coverage called “pay-as-you-go” workers’ comp insurance. This is a unique workers’ comp policy with a low upfront premium. You can make payments based on your current payroll instead of your estimated payroll. This is the best way to pay for and maintain workers’ compensation coverage if you hire seasonal workers regularly or if your total number of employees fluctuates because of industry factors.
Of course, an insurance agent may help you find the right insurance carrier based on class codes, insurance policies, and other elements. This can be very helpful for sole proprietors or those who have questions about workers’ compensation policies, the average cost of policies, healthcare for injured workers, and more.
Lastly, you can save money on workers’ comp costs by integrating a documented safety program to promote a safe work environment. Said differently, if you have exemplary safety procedures and policies in place, you’ll likely face fewer fines and may even receive discounts because your workplace may be seen as safer-than-most by insurance providers.
Contact Schwartzapfel Lawyers Today
As you have read, New York workers’ compensation insurance can be quite costly. But it can also be made manageable depending on the insurance company you choose to work with. In any event, you should remember that virtually all employers in NYS must carry workers’ comp insurance.
That said, you shouldn’t wait too long, as your window to file a claim and recover the money and benefits you are entitled to may soon close forever. To keep that from happening, act now and have Schwartzapfel Lawyers fight for you!
DISCLAIMER: Nothing on this page should be considered legal advice. You should seek the appropriate counsel your situation requires. For more information, call 1-516-342-2200 now!