Disability and Paid Family Leave Benefits Coverage Requirements
Virtually all employers in New York State must provide disability and Paid Family Leave benefits coverage for their employees (WCL §202). An employer, who has had in New York State employment, one or more employees on each of at least 30 days in any calendar year, shall be a "covered employer" subject to the Disability Benefits Law after the expiration of four weeks following the 30th day of such employment (WCL §202). These 30 days of employment need not be consecutive days but must be work days of employment in one calendar year
Additionally, an employer who by operation of law becomes successor to a covered employer, or who acquires by purchase or otherwise the trade or business of a covered employer, immediately becomes a covered employer
The following links provide specific coverage requirements for disability and Paid Family Leave benefits insurance:
Disability and Paid Family Leave benefits coverage is not required for black car operators as defined in Article 6-F of the Executive law ("The Black Car Law"),whose base is a member in good standing of the Black Car Fund.
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A business may not "borrow" employees from another business without each business having New York State disability and Paid Family Leave benefits coverage in its own legal name. Parent corporations that lend employees to "subsidiary" corporations that the "parent" corporation fully owns must have a disability and Paid Family Leave policy that lists all the legal entities using employees and must be able to provide proof of disability and Paid Family Leave benefits coverage for each of the legal entities using employees under their specific Federal Employer Identification Number (FEIN).
The only exception is when a business obtains all of its employees from a Temporary Service Agency (TSA). When a TSA has a full New York State disability and Paid Family Leave benefits insurance policy and directly pays individuals, provides their direction and control, maintains the ability to hire and fire them and satisfies other factors as defined by case law in determining an employer/employee relationship, the TSA is generally considered the primary employer under the Workers' Compensation Law. A Temporary Service Agency is a business that is classified as a temporary service agency under the business's North American Industrial Classification System (NAICS) code.
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Disability benefits (DB) and Paid Family Leave (PFL) coverage is required for all employees. PFL is generally included as a rider on a DB policy. For new employees, DB/PFL coverage must be obtained within four weeks from the newly hired employee's 30th day of employment.
Note: Some part-time or seasonal employees may qualify for a waiver of PFL coverage. See Opting Out/Waivers for more information.
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For Profit Businesses generally include, but are not limited to, sole proprietors, partnerships, LLCs, LLPs, and most corporations.
Under the Workers' Compensation Law (WCL) most individuals providing services to a for-profit business will be considered employees of that business. An employee is a person (including family members) who performs under the supervision, direction, and control of an employer either on or off their premises. This applies whether the worker is:
- Part-time
- Full-time
- Temporary
- Seasonal
- Casual/ Day Labor
- Leased
- Borrowed
- Unpaid - including volunteers and family members
These employees must be covered by NYS statutory disability and Paid Family Leave benefits insurance four weeks following the 30th day of employment.
Disability and Paid Family Leave benefits coverage is not required for partnerships, LLCs, and LLPs that do not have employees. Members and partners are not considered employees for the purposes of obtaining disability benefits insurance, but may elect to voluntarily cover themselves.
Disability and Paid Family Leave benefits coverage is not required for a sole proprietor who does not have employees. However, a sole proprietor may voluntarily cover themselves under a disability benefits and Paid Family Leave policy.
Disability and Paid Family Leave benefits coverage is not required if the business is a one or two person owned corporation, with those individuals owning all of the stock and holding all offices of the corporation (each individual must hold an office and own at least one share of stock). Other than the corporate officer(s), there are no employees, day labor, leased employees, borrowed employees, part-time employees, other stockholders, unpaid volunteers (including family members) or subcontractors.
Disability and Paid Family Leave benefits coverage is required if the corporation has more than two corporate officers or more than two shareholders, or where the one or two corporate officers do not own all the shares of stock (each owning at least one share).
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Disability and Paid Family Leave benefits coverage is not required if the business is a one or two person owned corporation, with those individuals owning all of the stock and holding all offices of the corporation (each individual must hold an office and own at least one share of stock) with no employees.
Disability and Paid Family Leave benefits coverage is required if the corporation has more than two corporate officers or more than two shareholders, or where the one or two corporate officers do not own all the shares of stock (each owning at least one share).
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Domestic workers include chauffeurs, nannies, home health aides, nurses, babysitters, au pairs, maids, cooks, housekeepers, laundry workers, butlers, companions, and gardeners working in a private household (12 NYCRR §355).
- Disability and Paid Family Leave benefits coverage is required if the domestic worker is employed 20 or more hours per week by the same employer (including full-time sitters or companions, and live-in maids) and they work 30 or more days in a calendar year for that employer. Time spent at the residence including sleeping and eating and any additional time spent off premises running errands and performing other duties for the employer, count towards the total hours worked per week. Also included in the calculation of hours worked per week are all hours where the employer requires the domestic worker's presence. For example, if the employer goes away for two full days and requires the domestic worker's presence, this counts as 48 hours worked.
- Disability and Paid Family Leave benefits coverage is not required if the only people who work for the household are domestic workers in a private household who individually work less than 20 hours per week for that household and do not live on premises.
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Disability and Paid Family Leave benefits coverage is not required for independent contractors because they are not employees as defined in the Disability Benefits Law. The following factors are used to determine whether an individual, outside the construction and transportation industry, is an independent contractor. An individual may be an independent contractor if they:
- obtained their own Federal Employer Identification Number (FEIN) or have filed business or self-employment income tax returns based on work or service performed in the previous calendar year.
- maintains a separate business establishment;
- performs work different from that of the hiring business and works for other businesses;
- is responsible for performing satisfactorily under a specific contract and is in a position to succeed or fail if the business' expenses exceed its income;
- has appropriate liability, workers' compensation, and disability benefits insurance policies under its own legal business name and FEIN
- has recurring business liabilities and obligations;
- advertises their own business;
- provides all equipment and materials necessary to fulfill the contract;
- controls the time and way the work is done; and
- works under their own operating permit, contract or authority.
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Disability and Paid Family Leave benefits coverage is required for all employees in the horse racing industry except as indicated below.
Disability and Paid Family Leave benefits coverage is not required for jockeys, apprentice jockeys, exercise persons, employees of trainers or owners who are licensed under Article 2 or Article 4 of the racing, pari-mutuel wagering and breeding law and who are covered by the New York Jockey Injury Fund, Inc. for workers' compensation, as they are excluded from the definition of employees for disability and Paid Family Leave benefits.
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Professional employer organizations (PEO) and leased employees
Disability and Paid Family Leave is required for employees that are leased by their employer. A PEO assumes a dual employer relationship with their client. The client generally recruits and hires its employees and contracts with the leasing firm to handle the payroll, taxes and benefit packages for its employees. The PEO must be licensed by the New York State Department of Labor.
Currently, clients of PEOs may be covered by either of the following methods:
- Each client of a leasing firm may purchase its own disability and Paid Family Leave policy to cover its leased employees and any direct employees or
- The PEO may obtain a disability and Paid Family Leave insurance policy in the name of the client which would cover the leased employees only. The coverage must then be filed electronically by the insurance carrier using the Federal Employer Identification Number (FEIN #) of the client. The coverage should not be filed using the PEO's FEIN #, name or address.
NOTICE TO EMPLOYERS - Employers are responsible for covering "ALL" of their employees. If the PEO Is providing coverage for the leased employees the employer may have to obtain a separate DB/PFL policy to cover employees that are employed directly by the employer.
The professional employer organization (PEO)
Disability and Paid Family Leave benefits coverage is required for individuals performing the administrative services of the PEO. Leased employees used by the clients of the PEO are NOT considered employees of the PEO for disability and Paid Family Leave benefits.
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Disability and Paid Family Leave benefits coverage is not required for a licensed insurance agent if:
- Substantially all compensation for services provided is directly related to sales or other output rather than the number of hours worked;
- The agent is not a life insurance agent receiving a training allowance subsidy described in section 4228 of the Insurance Law;
- Services are performed pursuant to a written contract between the agent and the party for whom services are performed;
- The written contract contains these provisions:
- The agent is an independent contractor;
- The agent will be paid a commission on their gross sales, that shall be directly related to sales or other output, with no relation to hours worked, and shall not be treated as an employee for tax purposes;
- The agent may work any hours they choose;
- The agent may work out of a personal office or home, or out of the office of the person for whom services are performed;
- The person for whom services are performed may provide office facilities, clerical support, and supplies for agent's use, but the agent must bear any other expenses including travel and entertainment expenses;
- Both parties must comply with all requirements of Article-21 of the Insurance Law, but compliance shall not affect the agent's status as an independent contractor;
- The contract may be terminated by either party at any time with notice given to the other.
For a complete description of the written contract requirements, refer to WCL § 201(6)(A).
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Disability and Paid Family Leave benefits coverage is not required for a licensed real estate agent if:
- Substantially all compensation for services provided is directly related to sales or other output rather than the number of hours worked;
- The services performed are pursuant to a contract between the real estate agent and the person for whom services are provided.
- The written contract contains these provisions;
- The real estate agent is an independent contractor;
- The agent will be paid a commission on their gross sales, that shall be directly related to sales or other output, with no relation to hours worked, and shall not be treated as an employee for tax purposes;
- The agent may work any hours they choose;
- The agent may work out of a personal office or home, or out of the office of the person for whom services are performed;
- The agent is free to engage in outside employment;
- The person for whom services are performed may provide office facilities, clerical support, and supplies for agent's use, but the agent must bear any other expenses including travel and entertainment expenses;
- Both parties must comply with the requirements of Article 12-A of the Real Property law, but compliance shall not affect the real estate agent's status and an independent contractor;
- The contract may be terminated by either party at any time with notice given to the other.
For a complete description of the written contract requirements, refer to WCL § 201(6)(A).
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A media sales representative is a contractor engaged in the sale or renewal of magazine subscriptions or the sale or renewal of magazine advertising space who receive no direction on how they perform services, are in control of their own work schedules, and who may refuse work assignments.
Disability benefits coverage is not required for media sales representatives if:
- Substantially all compensation for services provided is directly related to sales or other productivity rather than number of hours worked;
- The sales representative is incorporated under New York State law and solely responsible for all workers' compensation premiums
- Services are performed pursuant to a written contract between the media sales representative and the party for whom services are performed; and
- The written contract contains these provisions:
- The media sales representative is an independent contractor;
- Any fees will be commission based on the fixed rate outlined in the contract, there will be no compensation related to the number of hours worked, and the sales representative will not be treated as an employee for federal and state tax purposes;
- The media sales representative may work any hours, subject to limited restrictions;
- The media sales representative may work anywhere other than on the premises of the person for whom services are performed;
- The person for whom services are performed is not responsible for any reimbursement expenses other than those outlined in the written contract;
- The person for whom the services are performed and the media sales representative must comply with all articles of labor law that apply to their work, except article eighteen.
- The contract may be terminated by the media sales representative at any time with two weeks' notice given to the person for whom services are performed.
For a complete description of the written contract requirements, refer to WCL § 201(6)(A).
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Disability and Paid Family Leave benefits insurance coverage is not required for Native American enterprises owned by the Native American tribe itself (i.e. Casinos). Native Americans and non-Native Americans working at the enterprise may be covered voluntarily.
Disability and Paid Family Leave benefits insurance coverage is not required for enterprises that are not owned by the tribe; but are instead owned by an individual, partnership, corporation etc.; and whose employees are working solely on a Native American reservation. Native Americans and non-Native Americans working at the enterprise may be covered voluntarily.
Any enterprise not owned by the Native American tribe itself that is working in New York State outside a Native American reservation must abide by the regular New York State coverage requirements for disability and Paid Family Leave benefits insurance.
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Nonprofit entities that are compensating individuals for their services are required to obtain disability and paid family leave benefits coverage for all employees with the following exceptions:
- Clergy or members of religious orders performing only religious duties (WCL § 3 Group 18).
- People engaged in a professional1 or teaching capacity in or for a nonprofit institution designated under the IRS tax code as a religious, charitable, or educational organization. Teachers must only be performing teaching duties to be exempt from coverage.
- Persons receiving charitable aid from a religious or charitable institution who perform work in return for such aid and who are not under any express contract of hire, and certain persons receiving rehabilitation services in a sheltered workshop.
- Compensated executive officers of a not-for-profit corporation or unincorporated association are exempt, if the institution is designated under the IRS tax code as a religious, charitable, or educational organization.
Individuals who volunteer their services for nonprofit organizations and receive no compensation do not require disability and paid family leave benefits coverage.
Footnotes
1 Professional Capacity
A person engaged in a "professional capacity" exercises discretion and judgment rather than outside supervision in work that is predominantly intellectual and varied in character.
A person is engaged in a "professional capacity" when:
- Their primary work requires knowledge of an advanced field of science or learning, usually earned through specialized intellectual instruction or study; or
- They do original and creative work in a recognized artistic field that depends primarily on their invention, imagination or talent
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Disability and Paid Family Leave Benefits coverage is not required for a nonprofit entity that is not compensating individuals (including executive officers) for their services. Please note that compensation includes stipends, room and board, and other "perks" that have monetary value. Money used solely to offset expenses incurred while performing activities for the nonprofit are not counted as stipends.
Disability and Paid Family Leave Benefits coverage is not required for a nonprofit that is designated under the IRS tax code as a religious, charitable, or educational organization if there are no employees other than compensated executive officers.
Disability and Paid Family Leave Benefits coverage is required for a nonprofit corporation or unincorporated association that is not classified as religious, charitable, or educational (as designated under the IRS tax code) if there are compensated executive officers.
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New York State disability benefits insurance is required if an out-of-state business employs one or more workers whose work is localized in New York State on each of at least 30 days in a calendar year.
An employee's service is considered localized in New York State if
- it is entirely performed within New York State or
- they sometimes work outside New York State, but the out-of-state work is incidental, temporary, or transitory in nature or consists of isolated transactions outside the state
An employee's service that is not localized in any one location might still count as employment if
- their base of operations is in New York State or
- there is no base of operations in any state where some of the service is performed, but the place where the service is directed or controlled is in New York State or
- the base of operations or place from which the employee's service is directed or controlled isn't in any state where the service is performed, but the employee lives in New York State.
For more information see sections 201(6)(B) and (C) of the Workers' Compensation Law.
Employers who must have statutory disability benefits insurance must also have Paid Family Leave (PFL) coverage (which is added as a rider on the disability policy). You can find more information at the Paid Family Leave websiteopens external website.
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Many businesses whose only locations are outside New York State have employees working for them who live in New York State. These employees, who are NY residents, commute to work to their employer's out-of-state business locations. Out-of-state employers having employees that just live in New York State and commute to work at a company location outside New York State are not required to carry New York State disability and paid family leave benefits insurance.
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Disability and Paid Family Leave benefits coverage is not required for partnerships, LLCs, and LLPs that do not have employees.
Disability and Paid Family Leave benefits coverage is required for partnerships, LLCs, LLPs with employees, including part-time employees, borrowed employees, leased employees, family members, and volunteers.
Members and partners are not considered employees for the purposes of obtaining disability and Paid Family Leave benefits insurance, but may voluntarily cover themselves under a disability and Paid Family Leave benefits policy.
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Disability and Paid Family Leave benefits coverage is not required for sole proprietorships that do not have employees.
Disability and Paid Family Leave benefits coverage is required for sole proprietorships with employees, including part-time employees, borrowed employees, leased employees, family members, and volunteers.
The sole proprietor is not considered an employee for the purposes of obtaining disability and Paid Family Leave benefits insurance, but may voluntarily cover themselves under a disability and Paid Family Leave benefits policy.
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The spouse of an employer must be covered by New York State disability benefits unless a spousal exclusion form (DB-212.5)PDF is filed.
Sole proprietorships, regular partnerships, individual trustees, individual receivers and legal representatives may be eligible for spousal exemptions from the coverage requirements under the NYS Disability and Paid Family Leave Benefits Law. Such election shall be final and binding upon the spouse named in the notice until revoked by the employer. To revoke the election to exclude a spouse from coverage under the NYS Disability and Paid Family, the employer must notify both the Board and their carrier with an updated Form DB-212.5.
Corporations, LLCs, LLPs, LPs, PLLCs, PLLPs, RLLCs, RLLPs, Joint Ventures, associations, unions, and non-profits are NOT eligible for spousal exemptions.
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Elementary and high school students
Disability and Paid Family Leave benefits coverage is not required for students in elementary or secondary school who work during the school year or during regular vacation periods as a part-time worker, because they are excluded from the definition of "employment" under the NYS Disability and Paid Family Leave Benefits Law.
Student interns
Disability benefits with paid family leave coverage is required for student interns (paid or unpaid) who provide services to a for-profit business, a nonprofit organization, or a government agency.
Exception: Student interns who are engaged in a teaching capacity in or for a religious, charitable or educational institution (as designated under the IRS tax code) are exempt from mandatory coverage, but can be covered voluntarily.
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Most taxi cab operators are considered employees
A taxi driver, who does not own the taxi, is generally considered an employee. However, disability and paid family leave benefits is not required if the taxi driver leases the taxi from a person who personally and regularly operates the taxi (40 or more hours per week), the taxi driver is not an employee of the taxi owner unless the taxi owner controls the taxi driver (directs, supervises, or has the power to hire or fire).
Disability and Paid Family Leave benefits coverage is not required for drivers in Westchester, Nassau and New York City who are affiliated with a base member of the Independent Livery Drivers Benefit Fund defined in Article 6-G of the Executive Law.
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Disability and Paid Family Leave benefits coverage is required for all for-profit unions in New York State with no exceptions.
A union that is established as a nonprofit entity and pays salaries and/or stipends to anyone, including its union officers and/or shop stewards, is required to obtain a disability and Paid Family Leave benefits insurance policy in that union's name.
If a union is established as a nonprofit entity and does not pay salaries and/or stipends to anyone, then that union is not required to obtain New York State disability and Paid Family Leave benefits insurance requirements.
Money used solely to offset expenses incurred while performing activities for the nonprofit are not counted as stipends.
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Voluntary coverage may be obtained by public and private employers for their compensated employees in New York State employments for whom disability benefits are not required. Employers who wish to provide voluntary coverage must complete an application and, upon approval of the chair, the employer is a covered employer subject to the provisions of the Disability and Paid Family Leave Benefits Law.
Private employers
Private employers may apply to provide voluntary coverage by filling out Employer's Application for Voluntary Coverage (No Employee Contribution) (Form DB-135) or Employer's Application for Voluntary Coverage for Class of Employees For Whom Disability Benefits Are Not Required by Law (Employee Contribution) (Form DB-136). Note, private employers that choose to provide disability benefits also elect to provide Paid Family Leave benefits. One may not be provided without the other.
Public employers
Public employers may apply to provide voluntary disability benefits coverage by filling out Employer's Application for Voluntary Coverage (No Employee Contribution) - Form DB-135 or Employer's Application for Voluntary Coverage for Class of Employees For Whom Disability Benefits Are Not Required by Law (Employee Contribution) - Form DB-136.
Public employers may also provide voluntary Paid Family Leave coverage by filling out for Employer's Application for Voluntary Coverage (No Employee Contribution) - Form PFL-135 or Employer's Application for Voluntary Coverage (Employee Contribution Required) - Form PFL-136) (employee contribution).
Public employers, unlike private, may choose to provide Paid Family Leave and/or disability benefits coverage.
Discontinue voluntary coverage
If an employer wishes to discontinue voluntary coverage, they must provide ninety (90) days written notice to the Chair and to the employees, with provisions made for the payment of obligations incurred on and prior to the effective termination date. Voluntary coverage must be maintained for no less than one year.