Do You Need Workers’ Comp for Family Helping at Your New York Restaurant?

Quick answer: Yes. New York’s Workers’ Compensation Board counts anyone who works under your supervision, direction and control as an employee of your for-profit business. Its list names part-time workers and unpaid workers, including family members and volunteers. Not paying someone, or only having them in for a few shifts, doesn’t take them off that list. A spouse who helps counts too, subject to the regular owner and officer exclusions.

The real exceptions are about owners, not unpaid help. An LLC, partnership or sole proprietorship with no employees doesn’t need a policy, because members, partners and a sole proprietor aren’t counted as employees. Once someone outside the ownership works for the business as an employee, including a relative helping for free under your direction, that exception no longer fits. A genuinely independent business you hire, like the outside accountant in one of the Board’s examples, isn’t automatically an employee. Corporations have a narrower test, covered below.

This covers New York State workers’ compensation for for-profit restaurants. It’s based on the Board’s coverage pages, read October 23, 2026. They show no publication or update date, and this isn’t a new law. The Board says whether a worker is covered “is always a factual determination by the Board,” based on the facts at the time of an injury. Treat this as the question to settle with your insurer, not a ruling on your business. It doesn’t cover disability and Paid Family Leave coverage, which the Board handles on separate pages. It also doesn’t answer whether someone can legally work for you unpaid at all. That’s a wage question, and workers’ comp treating unpaid help as covered doesn’t make unpaid work allowed.

Who counts as an employee

The For-profit businesses section of the Board’s coverage page defines it this way:

An employee is a person (including family members) who performs under the supervision, direction, and control of an employer either on or off their premises.

It then lists who that applies to: part-time, full-time, temporary, seasonal, casual or day labor, leased, borrowed, and “Unpaid - including volunteers and family members.” The page says these employees “must be covered by the employer for workers' compensation insurance.”

The same page closes the usual workarounds:

• Family: “Family members providing paid or unpaid services to a for-profit business are counted as employees for workers' compensation coverage purposes.” The page flags different family rules only for farms and household employers.
• Spouses: Coverage is required for a spouse providing paid or unpaid services to a for-profit business, with “regular owner/officer exclusions” applying. A spouse who is actually an LLC member, a partner or a qualifying corporate officer falls under the owner rules below. Being married to the owner isn’t one of those rules.
• Volunteers: The Board says a for-profit business can’t have volunteers. “These individuals are employees and must be covered.”

None of these pages sets a minimum number of hours or a pay level below which help stops counting, and casual and day labor are on the list. A relative who preps on Saturdays or a friend who works the register on opening weekend counts if they’re working under your direction. Plan on covering them.

Where the owner exceptions start and stop

The Board leaves owners out in three situations. For an LLC, partnership or sole proprietorship, the question is whether the business has employees, not whether anyone outside the ownership ever provides a service. The corporation test is narrower: it also requires that nobody else, including a subcontractor, works for the corporation.

• LLCs, partnerships and LLPs with no employees. Coverage isn’t required, and “Members and partners are not considered employees for the purposes of obtaining workers' compensation insurance.” Coverage is required once the business has employees, “including part-time employees, borrowed employees, leased employees, family members, and volunteers.”
• Sole proprietors with no employees. Same pattern. Coverage isn’t required for the owner alone, and it’s required once there are employees, including family members and volunteers.
• Corporations, narrowly. Coverage isn’t required only for a corporation owned by one or two people who own all the stock and hold all the offices, with each holding an office and at least one share, and nobody else working for it. That means no part-time employees, day labor, other stockholders, unpaid volunteers (family members included) or subcontractors. A corporation with more than two officers or more than two shareholders, or with officers who don’t own all the shares, needs coverage even if only owners work there. If you’ve incorporated, read the Board’s corporation with no employees section and confirm your setup with your insurer.

The Board says members, partners and sole proprietors can still choose to cover themselves voluntarily.

Only people who actually are members, partners or the sole proprietor get left out. A relative who helps isn’t a member because they’re family. Check who your formation documents list as owners before you count anyone as one.

Two fictional cases

Case A: an LLC member working alone

A fictional owner forms a single-member LLC to open a small counter-service café in New York. For the first month, the owner works alone, testing the menu, setting up the POS, cleaning and stocking. Nobody else does any work for the business.

Under the Board’s LLC rule, this business has no employees, and the owner, as the LLC’s member, isn’t counted as one. Coverage isn’t required at this point, though the owner can choose to buy a policy that covers themselves.

Case B: the same member adds a relative for a few prep shifts

Three weeks before opening, the owner’s cousin offers to help with prep on three Saturdays, unpaid. The cousin isn’t a member of the LLC. They’ll work in the café’s kitchen from the owner’s prep list, on the owner’s schedule.

That changes the question. The cousin is family, unpaid and part-time, and each of those is on the Board’s list of employees who must be covered when the work is under the employer’s supervision, direction and control. Prepping in the owner’s kitchen from the owner’s list, on the owner’s schedule, fits that description. The LLC exception applies only to an LLC with no employees, so it no longer fits. The owner should have a policy in force before the first Saturday, not after the cousin has started.

Calling the shifts a favor or keeping them to three Saturdays doesn’t change that on the Board’s pages. For contrast, the Board’s example of someone likely not an employee is an accountant who owns their own business, has their own office and is hired to do a restaurant’s annual tax return. The Board points to working off-site, controlling when and how the work gets done, and getting work from many clients. The cousin in Case B is on site, working from the owner’s list, on the owner’s schedule.

The Board calls its examples “illustrative and not determinative,” and it decides coverage on the facts at the time of an injury. Neither case settles a real business’s situation.

Get coverage in place before covered help starts

If anyone outside the ownership will work under your supervision, direction and control, paid or not, have the policy in force before they start. If you aren’t sure whether someone is an employee, an owner or an independent business, such as a spouse who may be a member or a helper described as a contractor, settle it with the insurer or the Board before you rely on an exemption or let that work start. The Board’s pages don’t give a lead time, so ask the insurer for the date the policy will be in force and don’t schedule covered help before it.

The Board lists three ways to get coverage: a private insurance carrier authorized by the New York State Department of Financial Services, the New York State Insurance Fund (NYSIF), or self-insurance for employers that qualify. NYSIF is a public carrier, and the Board says it must provide insurance to any employer seeking coverage. NYSIF can deny coverage if the employer owes it money from a previous bill or account.

Tell the insurer exactly who will work, how each person is related to the owners and what they’ll do. The note below keeps that in one place. Get written confirmation of the date the policy is in force. Once you have coverage, the Board says employers must post notice of coverage at their place of business.

Our guide to choosing POS, insurance and services by total cost covers getting comparable quotes from a broker. The business setup checklist covers the other employer registrations to finish before your first payroll.

A note for your insurer

Use this only if: you run a for-profit restaurant in New York State and you’re working out New York workers’ compensation coverage. It records facts for your insurer or the Workers’ Compensation Board. It isn’t a coverage decision, and a blank line doesn’t mean anyone is exempt.

Stop rule: Don’t let anyone outside the ownership start work under your supervision, direction and control, paid or unpaid, family included, until a policy is in force. Ask the insurer to confirm the in-force date in writing for your records. For an LLC, partnership or sole proprietorship, an independent business hired for a separate job, like an outside accountant with their own office and many clients, is likely not an employee, so on its own it doesn’t mean you need a policy. A corporation qualifies for the owner exception only under the one- or two-owner test with nobody else working for it, subcontractors included, and it needs coverage even before anyone else joins if it doesn’t meet that test. If anyone’s status is unclear, such as a spouse who may be an owner or a helper described as a contractor, don’t rely on an exemption or let that work start until the insurer or the Board clarifies. The Board decides coverage on the facts at the time of an injury.

• Legal business name and entity type (LLC, partnership, LLP, sole proprietorship or corporation): [ ]
• Owners as listed in the formation documents, with each one’s role (member, partner, sole proprietor, officer, shareholder): [ ]
• If a corporation, the number of officers and shareholders, and whether each officer owns at least one share: [ ]
• Everyone else who will do any work, with their relationship to the owners (spouse, relative, friend or other) and whether they’re paid or unpaid: [ ]
• For each of them, their actual duties, who directs the work, expected days and hours, and first day: [ ]
• Carrier or NYSIF, policy number, date in force and who confirmed it: [ ]
• Questions still open, such as how a spouse who is also an owner is treated: [ ]

Sources

• New York State Workers’ Compensation Board, Is Workers' Compensation Coverage Required? Family members, For-profit businesses, For-profit corporation with no employees, Partnerships/LLCs/LLPs, Sole proprietorships, Spouse of employer and Volunteers sections. The page cites Workers’ Compensation Law §2, §3 and §51. No publication or update date shown. Read October 23, 2026.
• New York State Workers’ Compensation Board, Examples Where Workers' Compensation Insurance Coverage is Generally Not Required. No publication or update date shown. Read October 23, 2026.
• New York State Workers’ Compensation Board, Obtaining Insurance. No publication or update date shown. Read October 23, 2026.