An injured employee might find themselves temporarily unable to work. For situations such as this, employers should have workers’ compensation insurance. This coverage provides financial support when an injured employee needs time off of work. If an employer has at least one employee, then the employer must have workers’ compensation coverage. States such as New York impose fines on business owners who fail to maintain workers’ compensation. The act might even be a misdemeanor or a felony, depending on the location of the business.
Do All Businesses Need Workers’ Compensation?
As long as the business has at least one-employee, then yes, workers’ compensation is required by law. All employees are entitled to workers’ compensation coverage. Non-profit businesses are required to provide this coverage the same as for-profit businesses. And any full-time, part-time, or seasonal worker, even if they work from home, must have coverage as well.
Coverage rules are slightly different for farm workers. A farm worker must have coverage if they performed at least $1200 worth of work. And independent contractors and freelance workers require coverage as well. This is because tax status doesn’t determine who does or doesn’t need workers’ compensation coverage.
How Can an Employer Get Coverage for Employees?
The employer must estimate the total yearly payroll for every employee. This step is crucial because the payroll total determines the amount of the premium. After a year of coverage, the insurer will review the company’s business recorders. At that time the insurer will get the accurate payroll amount. If the premium is too low, then the employer will pay the difference. If the premium is too high, then the employer will have a credit applied to the policy.