Workers’ Compensation isn’t optional. It’s a core part of running a legal contracting business in New York State, and DCWP treats it as a non-negotiable requirement when you apply for (or renew) a Home Improvement Contractor (HIC) License.

This guide explains what it is, why it exists, when it’s required, and what NYC-specific rules you need to follow.

What Workers’ Compensation Is

Workers’ Compensation (“Workers’ Comp” or “WC”) is an insurance policy that covers employees who get injured or sick while doing their job.

It pays for:

• Medical bills

• Lost wages

• Rehabilitation

• Survivor benefits (in worst-case situations)

The purpose is simple: if someone gets hurt on your job site, you can’t leave them holding the medical bill, and you can’t expose homeowners to liability.

Why Workers’ Compensation Exists

Workers’ Comp protects everyone:

It protects workers

Contracting is physical labor. Accidents happen. WC ensures workers get medical care and wage replacement, without needing to sue you.

It protects you

Without WC, you personally may be liable for workplace injuries — including lawsuits, medical bills, lost wages, penalties from NYS, and license violations from DCWP.

It protects homeowners

Homeowners refuse unlicensed or uninsured contractors for a reason:

If someone gets hurt, the homeowner may get sued. WC prevents that.

When Workers’ Compensation Is Required in NYC

Here’s the rule of thumb:

If you have any employees — even one, even part-time, even temporary — you must carry Workers’ Compensation insurance.

Required if

• You have W-2 employees

• You use laborers who should legally be classified as employees (misclassification doesn’t exempt you)

• You run a contracting business with job sites where people work under your direction

Not required only if you meet strict exemption criteria

If your business truly has no employees and all work is performed by:

• You (the business owner), and

• Subcontractors who are separately licensed and insured

…you may qualify for a Certificate of Attestation of Exemption.

This exemption must be filed with the New York State Workers’ Compensation Board.

DCWP references this exemption in its contract requirements. Contractors who have an exemption must give the homeowner a copy of the Certificate of Attestation of Exemption before work starts.

What DCWP Requires from HICs

DCWP embeds Workers’ Comp compliance directly into the licensing and contract rules.

1. DCWP Requires Proof of Workers’ Compensation

Before starting any contracted work, the contractor must furnish the consumer with a Certificate of Workers’ Compensation Insurance.

2. If You’re Exempt, You Must Give the Homeowner the Exemption Certificate

If you filed a Certificate of Attestation of Exemption, you must provide the homeowner a copy.

3. All HIC Contracts Must Include a Workers’ Comp Clause

Contracts must state that the contractor agrees to furnish a Certificate of Workers’ Compensation Insurance before work begins. This is required under RCNY §2-221.

How a Contractor Shows Compliance

Option A: Carry a Workers’ Compensation Policy

• Purchase coverage from a private insurance carrier

• Or purchase coverage from the New York State Insurance Fund (NYSIF)

• Name DCWP as the certificate holder (required on your COI)

DCWP explicitly requires this in the model contract.

Option B: File for an Exemption

You can only do this if:

• You have no employees,

• You don’t hire anyone who should legally be an employee, and

• You’re not required to carry coverage based on your business structure.

This exemption is filed with the New York State Workers’ Compensation Board and documented through a Certificate of Attestation of Exemption.

What Happens If You Ignore Workers’ Comp

Skipping Workers’ Comp is a bad idea. Here’s the blunt version:

• DCWP can deny or revoke your HIC license

• NYS can fine you heavily for lack of coverage

• You can be personally liable for an injured person’s medical bills

• Homeowners will refuse to hire you — high-risk contractors are a liability to them

• You cannot legally perform work in NYC without complying

Contracting without WC is a fast route to legal and financial pain.

NYC Exceptions, Clarified

Many contractors get confused by the exemption rules. Here’s the reality:

“I use only subcontractors, so I don’t need Workers’ Comp.”

You might be exempt — but only if those subcontractors are legitimate 1099 businesses with their own insurance. If they work under your direction and control, NYS may classify them as employees, which means you do need WC.

“I’m a one-person LLC — I don’t need Workers’ Comp.”

Maybe. Maybe not. It depends on who performs the labor. If it’s just you, and you’re a member/owner performing the work yourself, you may file for an exemption.

In short:

If your business oversees physical labor on job sites, assume WC is required unless the State explicitly approves your exemption.

Workers’ Comp in Plain English

Here’s the simplest way to think about it:

If you send anyone into a home to work, and they can get hurt, Workers’ Comp is the insurance that prevents that injury from destroying your business.

That’s why DCWP forces contractors to prove they have it.

Summary

• Workers’ Comp is mandatory for NYC contractors with employees.

• You must provide homeowners a copy of your Workers’ Comp Certificate before work begins.

• If you are exempt, you must provide your Certificate of Attestation of Exemption.

• Every HIC contract must contain language acknowledging this requirement.

• Non-compliance exposes you to lawsuits, fines, license revocation, and personal liability.