Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirement Before Hiring in New York

In New York, businesses must secure workers compensation insurance before hiring employees. This insurance is mandatory to cover medical expenses and lost wages for employees who suffer work-related injuries or illnesses.

When to Obtain Workers Compensation Insurance

• Before hiring any employees: You must have workers compensation insurance in place prior to the first day of employment.
• Coverage applies to: Full-time, part-time, and seasonal employees.
• Exceptions: Sole proprietors and partners are generally exempt unless they choose to be covered.

Operational Steps for Compliance

• Register your business: Ensure your business is properly registered with New York State.
• Purchase insurance: Obtain workers compensation insurance through a licensed insurance carrier or the New York State Insurance Fund.
• Maintain documentation: Keep proof of insurance available for inspection and include it in your payroll and compliance records.
• Notify employees: Post the required workers compensation notices in the workplace as mandated by New York regulations.

Related Operational Considerations

• Payroll integration: Factor workers compensation premiums into your payroll and budgeting processes.
• Employee classification: Correctly classify workers to ensure accurate insurance coverage and premium calculation.
• Compliance reporting: Submit any required reports to the New York Workers Compensation Board as part of ongoing compliance.

As of 2026, businesses in New York must have workers compensation insurance secured before hiring employees to avoid penalties and ensure proper coverage.