What are some of the key issues of consideration for growing companies and start-up businesses, particularly operating within the state of New York and, thus, covered under the state’s employment and labor laws? As we continue dropping knowledge bombs regarding these issues, this blog post is an introduction to another new series, “Employer Considerations Concerning Employment-Related Insurance.” As the title suggests, the key issue here is insurance, which means that growing companies and start-up businesses should consider obtaining insurance with the aim of protecting their employees and nascent businesses. Some of the key policies that should be obtained and that will be discussed in this series include employment practices liability insurance (EPLI), unemployment insurance, workers’ compensation insurance, and disability insurance.
For the purposes of the record, the information provided under this series concerning what New York law says about the aforementioned policies was current as of 31 August 2022.
Accordingly, we kickstart this discussion by reviewing what New York law says about obtaining “Disability Insurance” in our blog titled “New York Law on Obtaining Disability Insurance.”
New York Law on Obtaining Disability Insurance for Growing Companies and Start-up Businesses
For starters, disability is one of the protected classes under New York City and State Labor Laws. As discussed in our blog post “Protected Classes under the New York City and State Labor Laws,” disability, whether perceived or actual, is a protected class pursuant to several laws that include the New York City Human Rights Law (NYCHRL) (NYC Administrative Code 8-101 et seq.), the New York Equal Pay Act (N.Y. Lab. Law § 194), and the New York State Human Rights Law (NYSHRL) (N.Y. Exec. Law § 290 et seq.). Notably, we also noted that the NYCHRL is very comprehensive when it comes to protections against workplace-related harassment, discrimination, and retaliation, including based on actual or perceived disability.
With that in mind, employers should obtain disability insurance to protect themselves against disability claims that may be made by their employees. Employers should note that New York is one of the few states where employers are required to provide disability benefits insurance for off-the-job illnesses or injuries to employees. Accordingly, as codified under N.Y. Work. Comp. Law § 203 of New York’s Disability Benefits Law, eligible employees must be provided with payment of disability benefits by their employers.
This implies that to remain in compliance with this requirement, it is advisable for employers of start-up businesses and growing companies to obtain disability insurance to cover eligible employees. Although they may choose to seek coverage elsewhere, permissible under the law, employers could opt for policies offered by the State Insurance Fund.
It is also crucial to note that in New York, disability benefits should only be provided in terms of cash-only benefits. In addition, the law stipulates that weekly cash benefits should be provided to employees with short-term disabilities, such as illnesses or injuries suffered off the job. As codified under N.Y. Work. Comp. Law § 204 & § 205(1), benefits (1) should be paid during any 52 consecutive week period and for a maximum of 26 weeks of disability, (2) are subject to Medicare and Social Security taxes, (3) cannot exceed the maximum benefit permitted under the law, which stands at $170 per week as of writing this blog and should be fifty percent of an employee’s mean wage per week for the last 8 weeks worked.
Another key thing to note is that disability benefits and paid family leave (PFL) compensation cannot be collected simultaneously. The law provides that the total combined PFL and disability benefits leave in any 52-week duration may not be more than 26 weeks.
Be on the lookout for our next blog post titled “New York Law on Employment Practices Liability Insurance (EPLI),” in which we will discuss why employers for start-ups and growing businesses and companies in the state of New York should consider purchasing EPLI in addition to other insurance policies.
As usual, stay tuned for more legal guidance, training, and education. 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, & Publisher.