New York Workers’ Compensation Coverage for the Out-of-State Employer
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New York – based businesses with employees are required to carry New York Workers’ Compensation Insurance.  But what about out-of-state employers who come into New York to do business?  What are they required to do?

NY Workers Compensation Policy

There are two different ways to include coverage for specific states on a Workers’ Compensation Policy.  The first is to list the state on the policy as a “3A” state, a state where operations are known or expected to exist.  If a state is included as a “3A” state, a classification describing operations in that state will be shown on the policy, along with a corresponding payroll.  The second method is to list the state as a “3C” state; “3C” states are states where a business has no normal or expected operations.  Sometimes, “3C” is used for states where there may be an incidental exposure, a salesman visiting a new out-of-state prospect, for example.

Criteria to Meet

New York’s Workers’ Compensation Law requires that certain out-of-state businesses with employees working in New York carry Workers’ Compensation coverage with New York as a “3A” state.   This requirement exists if the employer meets any one of the following criteria:

  • The employer is required to register with the New York State Department of Labor and pay Unemployment Insurance for any period in question.
  • The employer has a permanent physical location in New York or has employees whose primary work location is in New York.
  • The employer is operating in New York under a permit, contract, or license granted by the State of New York, its counties or any municipality as defined under §57 of the Workers’ Compensation Law.
  • The employer is working as a contractor, general contractor or subcontractor on a construction project in New York.
  • In the previous year, the employer:

Had employees physically in New York for at least 40 hours of every week, for a period of longer than 2 consecutive weeks; or

Had employees present in New York for 25 or more individual days (e.g.- 5 employees working for 5 days in New York equals 25 individual employee days).

Employees traveling through New York, not stopping for deliveries, pick-ups, or other work, are not considered to have worked a day in New York.   An employer that has reason to know that it will meet these criteria in the current year, even if it has not done so in the prior year, must obtain the required coverage.

For employers not meeting these criteria, it is enough that New York be listed as a “3C” state on the employer’s out-of-state Workers’ Compensation Policy.

Although an out-of-state employer’s Workers’ Compensation Policy will normally cover injured employees working temporarily in New York, this is not enough to keep an employer from violating the New York Workers’ Compensation Law.  It is important to talk to your insurance advisor about all states in which you are conducting business so that proper coverage can be arranged.

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