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Did you know when you purchase a Workers Compensation Policy, you actually need to purchase 2 policies?

Did you know when you need to purchase a WC policy, you need to actually purchase 2 policies?

What most business owners don’t realize is when it’s time to hire an employee not only do you need a WC policy to cover them if they’re injured ON the job, but you need to provide a Short-Term Disability/Paid Family Leave policy as well.

When client’s/prospects call our office looking for a WC policy and we tell them they need the Short-Term Disability/PFL policy as well, I hear the groans at the other end of the line. And they always contest that they don’t want that.

Unfortunately, not having a Short-Term Disability Policy is not an option. Failure to secure required disability and paid family leave benefits is a MISDEMEANOR punishable by a fine of $100 to $500 or imprisonment for up to one year or both. The fines are even higher if you’ve had more than one violation.

Not only are you subject to a fine and/or imprisonment, but you’d also be responsible for the total value of any disability or paid family leave benefits paid by the Special Fund or ONE Percent of your total payroll during the period of noncompliance, whichever is greater. Either way it’s going to be a large penalty, so it’s cheaper to just get the insurance.

Workers Comp Insurance is providing coverage for on-the-job injuries. Covering the employee’s medical expenses and lost wages.

Short-Term Disability/PFL benefits are providing coverage for employees when they are disabled by an off-the-job injury or illness. The most common being Pregnancy and Maternity/Paternity Leave. An employee can get up to 26 weeks of disability benefits between the two.

Employees will get 50% of their average weekly wage for the last eight weeks worked, up to $170/week after a 7-day waiting period. You can purchase a higher weekly benefit, which I recommend.

At $170/week, if your employee worked 40 hours/week and made minimum wage $13.20/hour in Upstate NY it wouldn’t replace 50% of their income. You can purchase coverage up to $1,020/week.

I would recommend that you purchase a weekly benefit that would be 50% of your employees weekly pay. If you have multiple employees at varying degrees of income level, you can choose the option that meets the majority of your employees needs or weigh the benefit of providing coverage based on the highest compensated employee. This will mean that you are overpaying for coverage for the lower wage employees, but you would be keeping everyone happy knowing that they will be receiving the full benefits their eligible for. In today’s competitive job market you can use the higher benefits to attract and retain the best talent.