A guide to construction workers' compensation insurance in New York

From electricians handling live wires to roofers working on sloped multi-story houses, there are many hazards on active construction sites that put even the most experienced workers at risk of injury. That’s why having workers’ compensation insurance is both a legal and ethical requirement for construction firms. 

Each state has its own regulations around workers’ compensation, and New York has some of the strictest laws in the country. Workers’ comp is also tied to payroll compliance, so coverage impacts both administrative departments and field teams.

This article is a practical guide to workers’ compensation insurance in New York, including coverage requirements, what it costs, and how firms can stay compliant.

What is workers’ compensation insurance in New York?

Workers’ compensation is a type of insurance that provides financial benefits to employees when they suffer an injury or illness as a result of their workplace duties. These programs aim to cover the cost of medical care and lost wages resulting from injuries. 

Covered injuries include those stemming from workplace accidents such as broken limbs, sprains, and struck-by injuries. Workers’ comp also covers occupational injuries resulting from repetitive duties, like carpal tunnel and tendonitis.

Who needs workers’ compensation coverage in New York?

In New York, workers’ comp coverage is mandatory for most construction businesses, with some limited exceptions. Here’s an overview of who needs it and who may be exempt.

General contractors and subcontractors

General contractors and subcontractors must carry coverage as long as they employ at least one worker. This includes part-time employees, family members, and W-2 workers. 

Temporary, leased, and day laborers on jobsites

Seasonal workers, temporary employees, and day laborers are considered employees under New York state law. While self-employed independent contractors are typically exempt from coverage, the Construction Industry Fair Play Act assumes that any construction worker is an employee unless they meet all the following conditions:

• They’re free from control or direction while on the job.
• They’re performing duties outside the usual course of business for the employer.
• They’re engaged in an independently established trade or business that is similar to the service performed.

Any contractor who violates the Fair Play Act by misclassifying a worker is subject to financial and legal penalties, including debarment from public bidding and criminal prosecution.

Sole proprietors and small ownership-only corporations

Sole proprietors and businesses with one or two owners are typically exempt from workers’ comp requirements in New York, but only if they have no other employees. Even one temporary or casual worker performing duties for the business is considered an employee for the purposes of New York’s workers’ comp system.

What are the workers’ compensation requirements for employers in New York?

Complying with New York workers’ compensation requirements starts with purchasing coverage, but it extends to multiple other areas, including notification standards and payroll processing. Here are some compliance obligations for contractors managing New York state’s workers’ compensation rules.

Posting a notice of compliance

All contractors are required to display a notice of compliance (Form C-105) in a highly visible location on the jobsite. Employers must post both English and Spanish copies of the notice, and they have to display notices on every worksite they oversee.

These forms are typically provided by the insurance carrier and include policy details. Violating these requirements can result in a fine of $500 per infraction.

Keeping payroll records for premium audits

Contractors must report payroll records, including job classifications and employer identification number (EIN), to their workers’ comp insurance provider. Maintaining accurate records is key to setting up coverage, calculating payroll data, and preparing for potential audits. 

Contractors running multi-state payroll also need to carry coverage in every state where work is performed and apply the correct premium rate according to job code and location. Many carriers offer policies that cover several neighboring states at once, so, for example, New York contractors operating in New Jersey can often use the same policy for all workers.

Carrying disability and Paid Family Leave coverage

New York employers with workers’ comp must also carry Paid Family Leave (PFL) and Disability Benefits Law (DBL) insurance. Carrier policies typically bundle these coverages with workers’ comp and provide weekly payouts for workers who suffer an injury not related to work or those who need time off to care for a family member.

Which factors determine workers’ compensation insurance in New York?

Many contractors wonder how much workers’ comp is in New York, but there’s no single answer. Several factors influence the cost of coverage.

Classification code rate

Workers’ comp rates per employee depend on job classification. More dangerous jobs cost more per month to cover. 

Experience modification rate 

Insurance companies use a contractor’s experience modification rate (EMR) to adjust premiums. An EMR benchmarks an employer’s risk profile based on the frequency and severity of past claims. An EMR of more than 1.0 indicates higher risk and therefore raises premiums, while a rate of less than 1.0 indicates a reduced risk and lowers them.

Construction Classification Premium Adjustment Program (CPAP) credit

Many states offer premium discount programs that help lower rates for workers’ comp insurance. In 2025, New York redesigned the Construction Classification Premium Adjustment Program (CPAP), which allows contractors who pay wages above job classification thresholds to receive a 10–25% dedication in premium costs.

The revised program applies to any workers’ comp policy effective on or after October 1st, 2025. There is no separate application anymore. The carrier collects hours, payroll, and average hourly wage by class code at the year-end audit, sends it to the Rating Board, and the credit is calculated from that.

Payroll

In New York and most other states, workers’ comp premium rates are proportionally applied per $100 of payroll. Calculation requires splitting the payroll by job code first, dividing each code’s payroll by 100, multiplying by that code’s rate, and then applying the EMR to the total.

How can construction companies get workers’ comp coverage in New York?

Contractors can purchase workers’ comp coverage through a number of avenues. The right choice depends on the firm’s financial situation and risk level. 

Private insurance carriers

Most New York employers choose to obtain coverage through a private carrier. One of the benefits of a private insurer is that they often offer incentives through discounts, bundled policies, and faster claims handling. However, employers with high EMRs may find it more difficult to get coverage approval.

New York State Insurance Fund 

The New York State Insurance Fund (NYSIF) is a public, state-run insurance carrier that provides workers’ comp, DBL, and PFL coverage for all contractors. NYSIF can’t deny coverage to any employer, regardless of risk, unless the business actively owes money to the organization from a previous account.

Self-insurance

Contractors are allowed to provide workers’ comp insurance to their workers independently. However, companies must meet a variety of state-imposed requirements to lawfully self-insure.

Track workers’ comp costs accurately with Miter Payroll

Workers’ compensation costs tie directly to payroll accuracy. Misclassifying a worker or applying the wrong rate to the wrong job code can result in unreliable reports that undermine the accuracy of premium calculations.

Miter’s Construction Payroll connects field-captured time to payroll using the job, cost code, trade, and classification details that matter in construction. By applying the right pay rules, including workers’ compensation and other labor costs, Miter helps contractors reduce manual entry, improve payroll accuracy, and keep labor costs aligned with the work performed.

Frequently asked questions

What does workers’ comp insurance cover in New York?

In New York, workers’ comp covers costs associated with an on-the-job illness or injury, including medical expenses, disability payments, and death benefits for families of deceased workers.

What happens if I don’t carry workers’ comp insurance in New York?

Violating workers’ compensation law in New York carries both criminal and civil penalties for employers.

Failure to secure coverage may result in the following criminal penalties:

• For five or fewer employees: A misdemeanor conviction and fine between $1,000, and $5,000
• For more than five employees: A class E felony conviction and fine between $5,000 and $50,000

Civil penalties also include a $2,000 fine for every 10 consecutive days of noncompliance, and firms may also face lawsuits brought by the uninsured worker.

Do I need to post a workers’ comp notice at my job site?

Yes, contractors must post a notice of insurance (Form C-105) at all jobsites in a conspicuous location.

How long do employees have to file a workers’ comp claim in New York?

Employees must notify their employer within 30 days of an injury. However, they have two years to formally file a claim with the New York State Workers’ Compensation Board.