Skip to main content

The Importance of Paying Your Workers Comp Insurance

The New York State Department of Insurance is cracking down on a practice they consider very common among NY business, specifically contractors,  known as employee misclassification on workers comp insurance.

workers comp insuranceThink of this crack down like Cops the TV show but instead it’s the workers comp insurance police and their busting construction sites not ghetto street corners in Memphis (No offense Memphis, that was just the last episode I saw).

According to an Albany Business Review article written by Michael DeMasi a New York State task force created to examine a perceived workers comp insurance problem found 12,300 instances of employee misclassification, which resulted in over $157 Million in unreported wages. Which in turn equates to ~$92 Million in lost unemployment tax and workers comp insurance assessment income to the state.

And if any of you are familiar with the current train wreck that New York’s legislators have spent us into (sorry to get political, but it doesn’t matter Dem, Republican, Independent its obvious our State legislators believe money grows on trees) then you can see why this lost workers comp insurance money would be a priority.

Contractors and Workers Comp Insurance

I know this might sound like contractor discrimination but the fact is, last year NY contractors were overwhelmingly the industry with the most violations (I don’t know the process for examining so maybe NYS does pick on contractors, I just don’t know).

From my own experience and from talking to other NY insurance professionals I do know that there are many misconceptions within the contracting community as to who is a sub-contractor, who is a independent sub-contractor, and who is an employee.

The Deal with Workers Comp Insurance

Whether you like it or not, whether you think its fair or not, New York State is coming after their workers comp insurance premiums. So you need to be prepared and start organizing your business and sub-contracting practices so you don’t get hammered with back premiums, fees, and penalties.

At a 10,000 foot level it comes to this:

  • If the person is a full or part-time employee YOU owe workers comp insurance premiums
  • If the person is a sub-contractor who does not have their own workers comp insurance YOU own workers comp insurance premiums

Think of it this way, someone is paying workers comp insurance premiums for ALL work done and the responsibility trickles up.  Its either going to be you or them, its not going to be nobody…

Your job as the owner of the contracting business is to make sure you properly understand the process associated with workers comp insurance and have procedures in place to protect your business.

Our workers comp insurance specialists can help with that!

Call us today at (518) 456-6688 or you can click here to email us.

We look forward to helping you…