Here at the Law Office of Vincent Miletti, Esq. and the home of the #UnusuallyMotivated movement, we take pride as a resilient and dependable legal services firm, providing such services in both a traditional and online, web-based environment. With mastered specialization in areas such as Employment and Labor Law, Intellectual Property (IP) (trademark, copyright, patent), Entertainment Law, and e-Commerce (Supply Chain, Distribution, Fulfillment, Standard Legal & Regulatory), we provide a range of legal services including, but not limited to traditional legal representation (litigation, mediation, arbitration, opinion letters, and advisory), non-litigated business legal representation and legal counsel, and unique, online legal services such as smart forms, mobile training, and legal marketing and development.

Still, here at Miletti Law®, we feel obligated to enlighten, educate, and create awareness, free of charge, about how these issues and many others affect our unusually motivated® readers and/or their businesses. Accordingly, to achieve this goal, we have committed ourselves to creating authoritative, trustworthy, & distinctive content. Usually, this content is featured as videos posted on our YouTube Channel https://www.youtube.com/channel/UCtvUryqkkMAJLwrLu2BBt6w and blogs that are published on our website WWW.MILETTILAW.COM. With that, the ball is in your court and you have an effortless obligation to subscribe to the channel and sign up for the Newsletter on the website, which encompasses the best way to ensure that you stay in the loop and feel the positive impact of the knowledge bombs that we drop here!

As the authoritative force in Employment Law, we are thrilled to continue creating content-filled videos that cover diverse areas of Labor Law to educate and deliver in a sense that only Miletti Law® can. In this regard, this blog introduces you to yet another of our training videos titled “Are You Exempt From Providing Workers Comp. Coverage?” which comes as a way of responding to some of the concerns our clients have had regarding the matter of providing compensation coverage. Accordingly, and as the title suggests, we aim to provide employers with legal guidance on whether they are exempt from providing their workers/employees with workers’ compensation coverage.

Without further ado, let us get down to it!

Generally, all employers, particularly within New York, are required to provide their employees with what is known as workers’ compensation coverage, irrespective of the number of workers one has. However, following the economic hardships caused by COVID, most employers struggled with providing their workers with their entitlements. Months later after COVID, everyone is still coming back, and businesses are trying and yet struggling to stabilize.

However, what is the current situation on the ground? Let us say that you start a business today and after several email exchanges and discussions with your broker, you obtain a worker’s compensation coverage. The day that follows, you hire an employee to work for several hours in a working week. After a week, you receive a communication audit from the workers’ compensation board (WCB) enquiring about your workers’ compensation plan. What should your response be, and what are you supposed to know?

For starters, under the workers’ compensation coverage law section 3, basically all employers in New York are required to have and provide their workers with some sort of coverage irrespective of the size and as long as one has a payroll. Section 50 of the workers’ compensation coverage law provides many ways regarding how you could satisfy this requirement. For instance, instead of the broker-provided workers’ compensation coverage plan, you would use another alternative, such as a self-funded system, but which is a complicated matter altogether. It is also crucial to understand that under section 50 of the workers’ compensation coverage law, an employer may be subject to penalties for failing to provide their workers with compensation coverage within ten days of hiring.

However, as the primary issue of focus in this blog and the video it is adapted from, there is a bunch of situations where an employer falls outside, which means that such an employer is exempt from providing workers with compensation coverage. While the matter may not be clear to most people, the problem is that the exceptions are scattered all over the general code and far-fetched, which underscores the need for employers to carefully examine each section, such as sections 2 (applicability), 3, 50, and 52, of the workers’ compensation coverage law. Nonetheless, while it is hard to follow these sections, an employer should evaluate whether they fall under any of the three general categories that determine exemptions and exceptions to obtain and provide worker’s compensation coverage. These categories include independent contractors, certain for-profit entities, and certain non-profit entities.

Category 1: Independent Contractors

From the word go, New York is not friendly to independent contractors because the state is adamantly pro-employee. Whenever labor statutes are amended or new laws passed in New York, independent contractors and freelancers are given more rights similar to those given to standard employees. This goes without saying that due to this issue, it is very hard under the law to identify and classify someone as an independent contractor. Usually, the classification is a two-part test:

Test 1: Looking at an Individual

When it comes to the individual, the law requires three characteristics to be met. The individual must (1) be free from control and direction in performing their job, (2) perform services outside the usual course of business for the employer, and (3) be engaged in an independently-established trade, occupation, or business that is similar to the services they provide.

Test 1: Looking at a Corporate Entity

On the contrary, when looking at the corporate entity, the law requires a total of 12 characteristics to be met. Well, we will not review these characteristics because, while the worker compensation code is very broad, it is extremely hard to qualify as and meet the qualifications of an independent contractor in New York.

Category 1: Certain For-profit Entities

The workers’ compensation coverage law provides a very straightforward exception for for-profit entities in that workers’ compensation coverage is not required for (1) partnerships, (2) LLCs (Limited Liability Companies), (3) LLPs (Limited Liability Partnerships) that do not have employees, (4) sole providers, and (5) business in which one or two people who own a corporation and are the principal stakeholders. However, any of these entities could participate out of good faith, but this is not a requirement under the workers’ compensation coverage law.

Category 3: Certain Non-profit Entities

There are a couple of exceptions as to why certain non-profit entities should not provide worker’s compensation coverage. Examples include (1) clergy and members of religious orders that perform religious duties, (2) members of a supervised amateur athletic activity operated on a non-profit basis, and (3) individuals engaged in a teaching capacity (to solely provide information) for a non-profit institution designated under the tax code as a religious, charitable, or educational organization.

Please, feel free to view our video at https://www.youtube.com/watch?v=NWMmuWdX43k. As we continue hammering on new stuff every day, stay tuned for more educative videos, inspiring training, & legal advice. In the interim, if there are any questions or comments, please let us know at the Contact Us page!

Always rising above the bar,

Isaac T.,

Legal Writer & Author.