My Employer Has No Workers' Comp Insurance — What Now?

If your New York employer carried no workers’ compensation insurance when you were injured, the Uninsured Employers Fund (UEF) pays your benefits. New York requires almost every employer to carry WC insurance (WCL §50, §52), and failure to do so is a misdemeanor — or felony for repeat violations. You file the Form C-3 against the employer as normal. The State, through the UEF, then pays your indemnity, medical, and other WC benefits and separately pursues the uninsured employer for reimbursement and civil penalties (currently $2,000 per 10-day period of non-coverage). The injured worker receives full benefits; the employer’s lack of insurance does not reduce or eliminate them.

The Uninsured Employers Fund (UEF) pays your benefits. The employer pays the State back — plus penalties.

TL;DR

• New York requires almost every employer to carry workers’ compensation insurance. The exceptions are narrow (certain agricultural, certain household employment, sole proprietors without employees).
• When an employer fails to carry insurance and an employee is injured, the Uninsured Employers Fund (UEF) pays benefits to the worker.
• The State then pursues the employer for reimbursement, plus civil and potentially criminal penalties under WCL §52.
• The injured worker is not affected by the employer’s lack of insurance — the UEF pathway ensures coverage.

How UEF works

When a NY employer carries no WC insurance and an employee is injured:

1. The worker files Form C-3 as normal — naming the employer
2. The carrier search confirms no insurance
3. The case proceeds against the UEF as a substitute carrier
4. UEF pays indemnity and medical benefits to the worker
5. The State pursues the employer separately for repayment and penalties

The worker does not have to chase the employer for money. The State does that.

What this means for you

If you were injured working for a NY employer who carried no WC insurance — common in small construction operations, restaurants, off-the-books employment — you are still entitled to all WC benefits:

• Two-thirds wage replacement up to the statutory max
• Lifetime medical for the work injury
• SLU awards or classification benefits
• Death benefits

The UEF is the payment source rather than a commercial carrier.

Employer consequences

WCL §52 makes failure to carry WC insurance a misdemeanor (and, for repeat violations, a felony). Civil penalties run $2,000 per 10-day period of non-coverage, with additional penalties for the period after a claim arises. The State pursues these aggressively.

This matters for one reason from the worker’s perspective: it incentivizes the employer to settle related claims (back wages, unpaid overtime) more readily, since they’re already exposed on the WC side.

Misclassification — “1099” workers

A significant percentage of workers labeled “independent contractors” or paid on 1099 are actually misclassified employees. NY uses a substantive test (control, integration, etc.) rather than the label on the paperwork. If you were misclassified, you are still an employee for WC purposes and entitled to benefits — and the employer faces UEF / penalty exposure.

This is particularly common in:

• Construction trades
• Restaurant delivery (especially e-bike)
• Cleaning services
• Home health aide work
• Truck driving
• Some salon and barber operations

What I see go wrong

• Worker doesn’t file because the employer “doesn’t have insurance” — wrong response; file anyway
• Cash payment treated as disqualifying — it isn’t
• 1099 status accepted without challenge — often misclassification
• Employer intimidation to discourage filing — this is illegal retaliation under WCL §120

What to do next

If your employer has no WC insurance, file the C-3 and proceed via UEF. Contact me directly — UEF claims have procedural wrinkles but the substantive rights are full WC.

Related pages

• Restaurant worker injuries
• Undocumented worker WC
• Can I sue my employer instead of filing workers’ comp?
• How long does a NY workers’ comp case take?