What is the difference between Worker’s Compensation and Disability

Business owner’s in the State of New York, who have employees need to carry two different insurance policies. These are Worker’s Compensation and Short Term Disability.

The difference between them while often confusing is actually very simple.

Worker’s Compensation

Workers’ Compensation is insurance that provides medical expense and lost wages for workers who are injured or become ill as a direct result of their job.

Employers are required to pay for this insurance and can not require employees to contribute to the cost of compensation.

Worker’s compensation rates are determined by the NY Worker’s Comp Board and are initial based on the industry you are in and the type of job your perform.

The amount that a worker can receive is based on his or her average weekly wage from the previous year. Using a formula of 2/3rd x your weekly wage.

There is a 7 day consecutive day waiting period before payment kicks in.

Short Term Disability

New York is one of a handful of states that require employers to cover employees for injuries or illnesses that happen off duty.

Coverage for disability benefits is usually obtained through a different insurance carrier than your Worker’s Compensation and only a handful of insurance carriers still offer it.

Disability benefits are temporary cash benefits paid to an eligible wage earner when they have been deemed unable to work by an off duty injury or illness.

The benefits are paid out with a max of 50% of the employees average weekly wage but no more than a maximum benefit of $170. This benefit can be increased by an employer before the policy period starts.

Benefits are paid for a maximum of 26 weeks during a 52 consecutive week period. There is a 7 day waiting period for which no benefits are paid.

Short term disability policies now include a separate part called Paid Family Medical Leave that was introduced to New York in 2018.

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New York Business Owners

New York business owner’s have been paying high insurance costs for many years. Juggling on how to best protect their businesses and employees at the same time staying in compliance with New York State guidelines.

Understanding what is needed, required, and how to find the most affordable coverage for your business is not easy and could be a full time job for some business owners.

Using a trusted insurance advisor will help you and take the pressure and pain of trying to understand what is needed and how to lower your costs.

If you don’t have a relationship with an agent or want a review of your insurance, click below to get started:



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