If you're running a business in New York, here's something you need to know: the state requires you to provide disability insurance to your employees. It's called Disability Benefits Law (DBL) coverage, and unlike workers' compensation, it covers illnesses and injuries that happen off the job. Whether your employee breaks their leg skiing in Vermont or needs surgery for a medical condition, DBL helps replace their income while they recover.
This isn't optional coverage you can skip. New York is one of only a handful of states with mandatory disability insurance laws, and the penalties for non-compliance can be serious. But don't worry—we'll walk you through exactly what you need to know, from who needs coverage to how much it costs and where to get it.
Who Needs to Provide DBL Coverage?
The rule is straightforward: if you have at least one employee working in New York on each of at least 30 days in any calendar year, you're a covered employer. That means even if you're a small business with just one or two employees, you likely need to provide this coverage. The 30-day threshold comes quickly—once you hit it, you have four weeks to get your coverage in place.
There are a few exceptions. Domestic workers employed in private homes, certain agricultural workers, and government employees typically aren't covered under DBL. But for most businesses—retail shops, restaurants, offices, construction companies, you name it—this requirement applies.
Your employees become eligible for benefits after they've worked for you for a certain period. Full-time employees qualify after 4 consecutive weeks of employment, while part-time employees become eligible after their 25th day of work. This waiting period helps prevent fraud while still getting coverage to employees fairly quickly.
What Does DBL Coverage Actually Provide?
When an employee can't work due to a non-work-related illness or injury, DBL provides cash benefits to help replace their lost income. The benefit amount is 50% of their average weekly wage over the past eight weeks, up to a maximum of $170 per week. Yes, that maximum seems low—it hasn't been increased since 1989, despite decades of inflation. There's ongoing discussion about raising it, but for now, $170 is the cap.
Employees can receive these benefits for up to 26 weeks during any 52-week period. There's a mandatory 7-day waiting period before benefits begin, unless the employee is hospitalized—in that case, benefits start from day one. To qualify, your employee needs medical certification from their doctor confirming they're unable to perform their regular job duties.
It's important to understand what DBL doesn't cover. Work-related injuries and illnesses are handled through workers' compensation, not DBL. The coverage also doesn't apply to disabilities caused by war, intentional self-injury, or injuries sustained while committing a crime. And if your employee is receiving unemployment benefits or workers' comp, they can't simultaneously collect DBL.
How Much Does DBL Cost and Who Pays?
Here's where things get interesting: both you and your employees can contribute to the cost of DBL coverage. As an employer, you're allowed to deduct up to 0.5% of each employee's weekly wage to help pay the premiums. For 2025, that deduction is capped at $0.60 per week per employee. The taxable wage base for calculating contributions is $91,373.88 for 2025.
Many employers choose to cover the full premium cost themselves as an employee benefit, but you're not required to. If you do take the payroll deduction, you need to clearly communicate this to your employees. The actual premium cost varies depending on your industry, claims history, and which insurance carrier you choose, but the employee contribution limit stays the same across the board.
Don't confuse DBL with Paid Family Leave (PFL), which is a separate benefit that's 100% employee-funded through payroll deductions. For 2025, the PFL contribution rate is 0.388% of wages, capped at $354.53 annually. While both programs are mandatory in New York, they serve different purposes and have different funding structures.
Where to Get DBL Coverage: Your Three Options
You have three ways to meet your DBL obligation, and each has its pros and cons. Most employers go with option one or two.
First, you can purchase a policy from a private insurance carrier. Companies like MetLife, The Hartford, and many others offer DBL policies in New York. This gives you the flexibility to shop around for competitive rates and bundle your DBL with other business insurance needs. Your broker can help you compare options and find a policy that fits your business.
Second, you can use the New York State Insurance Fund (NYSIF), which is the state-operated option. NYSIF is required to offer coverage to any employer who applies, making it a good fallback if you're having trouble getting coverage from private carriers. The rates are set by the state and tend to be competitive, especially for small businesses or those in higher-risk industries.
Third, large employers can apply to become self-insured, which means you directly pay benefits to employees rather than going through an insurance carrier. This requires approval from the Workers' Compensation Board and posting a substantial security deposit or bond. For most small to mid-sized businesses, self-insurance isn't practical, but it can make sense for large corporations with the resources to manage claims internally.
Your Compliance Obligations as an Employer
Getting the coverage is just the first step. You also need to stay compliant with New York's posting and notification requirements. You must display Form DB-271 in a conspicuous location at your workplace where employees can easily see it. This notice tells employees they're covered and explains how to file a claim if they become disabled.
You'll also need to notify your insurance carrier whenever you hire new employees or when there are changes to their employment status. Keep accurate payroll records showing any employee contributions toward DBL premiums. If an employee files a claim, cooperate with the insurance carrier's investigation and provide requested documentation promptly.
The penalties for non-compliance aren't something to take lightly. If you fail to provide required DBL coverage, the Workers' Compensation Board can assess significant fines and penalties. You could also be personally liable for paying benefits directly to employees if they become disabled while you're uninsured. Operating without coverage is a risk no business owner should take.
How to Get Started with DBL Coverage
If you're a new employer or realize you don't have DBL coverage in place, don't panic—but do act quickly. Start by contacting a commercial insurance broker who works with New York businesses. They can explain your options, get quotes from multiple carriers, and help you choose the right policy for your needs and budget.
If you're having trouble finding coverage through private carriers, reach out directly to NYSIF. They're required to provide coverage to any New York employer who needs it. You can apply online through their website, and the process is fairly straightforward.
Once your policy is in place, make sure you understand how the claims process works so you can help your employees if they need to file. Keep your broker or carrier's contact information handy, post the required notices, and add a reminder to your calendar to review your coverage annually. Rates and requirements can change, and you want to make sure you're always in compliance.
New York's DBL requirement might seem like just another compliance headache, but it actually serves an important purpose. When employees know they have some income protection if they become sick or injured, it creates a more stable and secure workforce. And while the benefit amounts could certainly be higher, having this safety net in place is better than leaving your employees with nothing during difficult times. Take care of this requirement, and you'll have one less thing to worry about as you focus on growing your business.
