If you go without workers compensation in New York when you are required to have it, you can face civil fines, a stop-work order that shuts your business down, criminal charges, and a lawsuit from an injured worker in which you lose your usual legal defenses. New York enforces this hard, and construction is its top target.
Who this is for: New York owners weighing the risk of not carrying workers comp, or who just discovered a lapse. This guide lays out the penalties so you can see why coverage is cheaper than the alternative. Workers comp pays an injured worker's medical bills and part of their lost wages.
The short version
- Civil penalty: up to $2,000 for every 10-day period without coverage, or two times the missed cost, whichever is greater.
- Stop-work order: the Workers' Compensation Board can order your business to halt until you are covered.
- Criminal charges: a misdemeanor for five or fewer employees, a felony for more than five.
- Personal liability: corporate officers, sole proprietors, and partners are personally on the hook.
- Lawsuit exposure: an uninsured employer can be sued directly and cannot use its normal defenses.
The penalties in New York, laid out
New York's Workers' Compensation Law sets stiff consequences for failing to secure coverage. They stack, so a single lapse can trigger several at once.
| Penalty | What it means |
|---|---|
| Civil penalty | Up to $2,000 for each 10-day period of no coverage, or two times the cost of the coverage you avoided, whichever is greater |
| No payroll records | The penalty can be figured using the state average weekly wage multiplied by 1.5 per employee |
| Stop-work order | The Board can order all business activity to stop until you get covered |
| Misdemeanor | Failing to cover five or fewer employees in a 12-month span, with a fine of $1,000 to $5,000 |
| Felony | Failing to cover more than five employees is a class E felony, with a fine of $5,000 to $50,000 |
| Repeat offense | A second violation within five years can be a class D felony, with a fine of $10,000 to $50,000 |
| Failure to post notice | A $500 fine for not posting the required notice of coverage |
Personal liability and lawsuits
Two consequences hurt the most. First, the people running the business are personally liable: the president, secretary, and treasurer of a corporation, and every sole proprietor and partner, can be pursued personally for the penalties and the injured worker's benefits. The corporate shield does not protect you here.
Second, you lose your legal defenses. When you carry coverage, workers comp is normally the only remedy an injured worker has against you. When you do not, the worker can either collect from the state's Uninsured Employers' Fund or sue you directly, and in that lawsuit you cannot argue the worker was careless, that a coworker caused it, or that the worker assumed the risk. That combination makes an uninsured injury very expensive.
Other consequences that follow
Beyond fines and lawsuits, an uninsured employer can face assessments from the Uninsured Employers' Fund, debarment from bidding on public work for at least a year, and liability for all benefits and defense costs on a claim. For a contractor that relies on public or larger private jobs, the debarment alone can cost far more than the premium ever would.
A quick New York example
Illustrative, not a quote. A framing contractor in Nassau County runs four uninsured laborers to save on premium. During an inspection sweep, the Workers' Compensation Board finds no coverage and issues a stop-work order, halting the job. The civil penalty runs up for each 10-day period the crew went uncovered. Then a laborer falls and shatters an elbow; because the contractor is uninsured, the worker sues directly, and the contractor cannot raise the usual defenses. Between the penalty, the medical and wage benefits, and a year of debarment from public work, the contractor pays many times what a policy would have cost.
Real questions New York owners ask
What is the fine for not having workers comp in New York?
The civil penalty can reach $2,000 for every 10-day period without coverage, or two times the cost of the coverage you avoided, whichever is greater. Criminal fines and other penalties can apply on top.
Can the state really shut my business down?
Yes. The Workers' Compensation Board can issue a stop-work order that halts all business activity until you get covered. It is one of the fastest and most disruptive tools the Board has.
Could I face criminal charges?
Yes. Failing to cover five or fewer employees in a 12-month period is a misdemeanor, and covering more than five is a felony. A repeat offense within five years can be a more serious felony.
Am I personally liable, or just my company?
You can be personally liable. Corporate officers such as the president, secretary, and treasurer, along with sole proprietors and partners, can be pursued personally for penalties and the injured worker's benefits.
What happens if an uninsured worker gets hurt?
The worker can collect from the state Uninsured Employers' Fund or sue you directly. In that lawsuit you cannot argue the worker was careless, that a coworker was at fault, or that the worker assumed the risk.
I let my policy lapse by accident. What should I do?
Get coverage back in force immediately and document the gap. The penalty grows with each 10-day period uninsured, so closing the gap fast limits the exposure. We can often bind coverage the same day.
Does going uninsured affect public contracts?
Yes. An uninsured employer can be barred from bidding on public work for at least a year, on top of fines and benefits owed. For contractors that rely on public jobs, that debarment can be the costliest part.
Why New York owners choose Morrow
- We shop the right market for you. New York is an open, competitive market: you can buy coverage from any private carrier the state authorizes or from the state-run New York State Insurance Fund (NYSIF), so Morrow shops multiple insurers to find the best fit instead of leaving you with a single option.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related New York guides
Every New York business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in New York (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- What workers comp does not cover
- Workers comp vs employers liability
- Contractor workers comp in New York
This guide is general information, not legal advice. New York rules and penalty amounts can change, so verify current requirements with New York State Workers' Compensation Board or a licensed advisor before you rely on them. Last updated: July 2026.