Workers Compensation Requirements by State

Most states require businesses to have workers compensation insurance to cover employees who become injured at work.  Workers compensation insurance does two things.  First, it allows the injured employee to receive medical care and compensation for a portion of the income lost.  Second, it protects employers from lawsuits by employees who suffer injuries during work.  The laws regarding workers compensation can be complicated and vary from state to state.  Below are the workers compensation requirements for each state.

 

(Current as of 2018)

ALABAMA
Requirements:
Businesses with five or more employees must carry coverage. With corporations or LLCs, officers and members are counted as employees. If there are more than four employees, workers’ compensation insurance is required.
Exceptions:
Coverage is not required for businesses with four or fewer regular employees (full-time or part-time), other than businesses constructing or assisting on-site in the construction of new single-family, detached residential dwellings. Employers of household/domestic employees, farm laborers, or casual employees are not required to provide coverage, but may choose to. Sole proprietors can opt out of carrying coverage.

ALASKA
Requirements:
Employers with one or more employees must have workers’ compensation insurance.
Exceptions:
Sole proprietors, partners, executive officers in a nonprofit corporation, members in a member-managed LLC, part-time babysitters, non-commercial cleaners, harvest help and similar part-time/transient help, sports officials for amateur events, contract entertainers, commercial fishers, and taxi drivers whose compensation is by contractual arrangement are exempt. Executive officers in a for-profit corporation may choose to exclude themselves.

ARIZONA
Requirements:
Mandatory for any business (including sole proprietors) that regularly hires or employs at least one employee, regardless of the number or type of workers (whether part-time, full-time, minors, or family members).
Exceptions:
Coverage is not required for working partners, independent contractors, casual workers, or domestic servants working in your home. Sole proprietors can opt out of coverage if they do not have employees.

ARKANSAS
Requirements:
Most employers with three or more employees must carry coverage.
Exceptions:
Employers with two or fewer employees, farm laborers, and real estate agents. There are exceptions to the three-or-more requirement; thus, employers with fewer than three should check with authorities before assuming they do not fall under the workers’ compensation laws.

CALIFORNIA
Requirements:
All employers and work situations, even those with just one employee, including corporate officers and directors, must carry coverage. If you’re an out-of-state employer you might need workers’ compensation coverage for any employees regularly working in California, or if you enter into a contract of employment.
Exceptions:
Executive officers and directors of corporations must be included in workers’ compensation coverage, unless the corporation is fully owned by the directors and officers. If the directors and officers fully own the corporation, they can choose to be excluded from coverage. Sole proprietors without employees can opt out of coverage.

COLORADO
Requirements:
All employers with one or more employees, whether full- or part-time. Anyone hired to perform services for pay is considered an employee.
Exceptions:
Exemptions include casual maintenance or repair work for a business for less than $2,000 per calendar year, private domestic and maintenance/repair workers not working full-time, real estate agents and brokers paid by commission, independent contractors (with no employees), and drivers working with a contract carrier. Sole proprietors can purchase workers’ compensation insurance for themselves, but are not required to do so. A corporate officer of a corporation or a member of an LLC may choose to exclude themselves from coverage.

CONNECTICUT
Requirements:
All businesses with one or more employees (full-time, part-time, or contract) except those able to self-insure. Also included are uninsured subcontractors.
Exceptions:
Corporate officers and members of multi-member LLCs are automatically included but may opt-out. Sole proprietors and single member LLCs may purchase it, but are not required to. Other exemptions include partnerships, who don’t have to cover themselves (but must provide coverage for employees). Employers or workers who work in or around a private home for 26 hours or less per week are also exempt.

DELAWARE
Requirements:
Employers with one or more employees.
Exceptions:
Farm workers are exempt from the workers’ compensation law, but employers may choose to provide coverage. Workers considered to be independent contractors, rather than employees, are also not covered.

DISTRICT OF COLUMBIA
Requirements:
Employers with one or more employees.
Exceptions:
Sole proprietors are not required to unless they have employees, but may choose to purchase coverage for themselves. Homeowners are required to have coverage for domestic workers if one or more works at least 240 hours during any calendar quarter in the same or previous year.

FLORIDA
Requirements:
Construction businesses with one or more employees and non-construction industry employers with four or more employees (full-time or part-time, including corporate officers and LLC members) must carry coverage. Agricultural businesses with six or more regular employees and/or 12 or more seasonal employees who work for more than 30 days must carry coverage. Sub-contractors are responsible for providing coverage for their workers, but primary contractors are responsible for ensuring that the sub-contractor has it. Out-of-state employers must immediately notify their carrier that they have employees working in Florida, carry a Florida workers’ compensation policy, or have the out-of-state policy include Florida.
Exceptions:
Corporate officers are considered employees, unless they choose to exempt themselves from coverage. Sole proprietors and partners in the non-construction industry are not considered to be employees unless they choose to be. Members of an LLC will be considered as corporate officers/employees, unless they choose to be exempt.

GEORGIA
Requirements:
Employers (including individuals, firms, associations, or corporations) of three or more people are required to carry coverage. Exempted officers of corporations or members of LLCs are counted as employees. Contractors who sub-contract any part of their work might be liable for coverage for the subcontractor’s employees if the subcontractor lacks coverage.
Exceptions:
Georgia considers sole proprietors and partners to be employers (not employees) and they are therefore exempt; however, they can choose to be covered as an employee by advising their insurance carrier.

HAWAII
Requirements:
Any employer with one or more employees (full- or part-time, permanent or temporary) must carry coverage. LLC members must also be covered.
Exceptions:
Sole proprietors and partners are excluded, but can choose to cover themselves. Other exemptions include domestic workers earning less than $225 per calendar quarter, some 25-percent stockholders and all 50-percent stockholders, and real estate salespeople paid by commission. Employers can choose to cover any excluded employees.

IDAHO
Requirements:
Employers with one or more full- or part-time, seasonal, or occasional employees are required to have workers’ compensation coverage.
Exceptions:
Sole proprietors are exempt, but can choose to cover themselves. Other exemptions include household/domestic workers, sole proprietors who employ family members that live in their household (certain family member employees of a sole proprietor employer who do not live in the same household as the employer can be exempt), pilots of agricultural planes, real estate salespeople paid by commission, and casual employees whose work occurs occasionally or at irregular times (and is not related to the type of business conducted by the employer).

ILLINOIS
Requirements:
Required in nearly every work situation and for every employer, even those with one part-time employee. If the business is in construction, trucking at a construction site, or other hazardous fields, in almost every instance Illinois requires employers to obtain insurance.
Exceptions:
Sole proprietors (with no employees) are exempt, but may choose to purchase insurance. Employees who are family members must also be insured unless they are corporate officers, work for an agricultural business that employs less than 400 days of labor per year, or are immediate family members who live with the employer.

INDIANA
Requirements:
All employees must be covered.
Exceptions:
Sole proprietors, partners, and LLC members are excluded from coverage, but can choose to be included. Corporate officers are included but can choose to be exempt. Independent contractors in the building and construction trades must be certified with the Indiana Worker’s Compensation Board. Independent contractors’ injuries are not covered by workers’ compensation.

IOWA
Requirements:
Most employers are required to purchase workers’ compensation insurance.
Exceptions:
Sole proprietors and LLC members are not required to be covered by insurance, but may choose to do so. Exempt and non-covered employees include domestic/casual workers who make under $1,500 from their employer during the 12 consecutive months before injury, agricultural workers whose employer has a cash payroll of less than $2,500 in the calendar year before the injury, agricultural exchange labor, and officers of a family farm corporation (as well as their spouse, parents, brothers, sisters, children, stepchildren and spouses of those family members).

KANSAS
Requirements:
Mandatory for all employers with employees with gross payroll over $20,000 (paid in Kansas or elsewhere and including executive officers), with some exceptions. Sole proprietors’ and partnership wages paid to owners and owners’ family members are not counted toward the total payroll.
Exceptions:
Agricultural employers and those with annual gross payroll under $20,000. Sole proprietors, partners, and LLC members are exempt, but can choose to be covered. Independent contractors with no employees may choose to be exempt from carrying insurance, but those with employees and payroll exceeding total gross payroll of $20,000 must provide coverage. Family members that are not true owners of a company, or do not own 10 percent of the business, must be included in the coverage and cannot choose to be excluded.

KENTUCKY
Requirements:
All employers with one or more employees, regardless of employee status
Exceptions:
Sole proprietors, partners, and LLC members are excluded from coverage, but can choose to cover themselves. Exceptions include farm workers, domestic servants in a home with fewer than two full-time employees, and employees protected by federal laws (railroad and maritime workers). Independent contractors aren’t covered unless they have their own policy.

LOUISIANA
Requirements:
All employers must provide workers compensation insurance for their employees (whether part-time, contractors, or full-time).
Exceptions:
Sole proprietors, partners, corporate officers, and LLC members are included, but can choose to be excluded. Exemptions include dusting/spraying airplane crews, real estate brokers and agents, musicians and performers, employees covered federally, unpaid officers and board members of certain nonprofit organizations, and people whose work includes the exploration, development, production, or transportation of minerals.

MAINE
Requirements:
Any business with one or more employees must provide workers’ compensation insurance coverage. Independent contractors don’t count as employees, but if contractors employ subcontractors, subcontractors must be covered.
Exceptions:
Sole proprietors, partners, and LLC members are excluded but can choose to include themselves. Other exemptions include employers of domestic servants, employers of casual or seasonal laborers in agriculture/aquaculture businesses (but they must have $25,000 in liability insurance and $5,000 in medical payments coverage), and employers of six or less agriculture/aquaculture employees (must have liability insurance of $100,000 for each full-time equivalent employee and at least $5,000 minimum in medical payments coverage).

MARYLAND
Requirements:
Every employer with one or more employees must provide workers’ compensation insurance, with a few exceptions.
Exceptions:
Sole proprietors are excluded from requiring mandatory coverage, but can choose to include themselves in their policy. Agricultural employers with less than three full-time employees or an annual payroll for full-time employees below $15,000 are exempt. Agricultural office workers, independent contractors on farms (other than migrant laborers), and owner-operators of large tractor-trailer vehicles are also exempt.

MASSACHUSETTS
Requirements:
All businesses must carry workers’ compensation insurance regardless of the number of hours worked. Employees in domestic service must be covered if they work 16 or more hours per week.
Exceptions:
Sole proprietors, partners, and LLC members are not required to carry coverage for themselves, but may choose to be covered. Other exemptions include workers engaged in interstate/international commerce, salespeople working in real estate or consumer goods paid by commission, taxi drivers who lease their cabs on a fee basis not related to fares (and who are not employees under federal tax law), people working in interstate/international commerce who are covered by federal law for compensation for injury or death.

MICHIGAN
Requirements:
All businesses with one or more employees are required to carry coverage.
Exceptions:
Employees of a sole proprietorship are covered by the Workers’ Disability Compensation Act, but the sole proprietor (the business owner) is self-employed, not considered to be an employee, and not covered. Under certain circumstances named partners and corporate officers who are also shareholders of small, closely-held corporations may exempt themselves from coverage. Certain family members of an employer may also be exempt. Virtually all other employers and employees are subject to the law.

MINNESOTA
Requirements:
All employers are required to provide workers’ compensation insurance coverage to all employees, including non-US citizens and minors.
Exceptions:
Sole proprietors, partners, some managers of LLCs, officers of closely held corporations and certain relatives are excluded from compulsory coverage, but may choose to be included in their policy. Employers covered by federal liability laws are exempt, and so are family farm operations, with some restrictions.

MISSISSIPPI
Requirements:
All employers with five regular employees must provide workers’ compensation insurance coverage.
Exceptions:
Sole proprietors, partners, and corporate officers don’t count toward the employee total if they choose to not cover themselves. Employers with less than five employees or domestic or farm laborers are not required to have coverage but may be choose to provide it. Independent contractors are usually excluded from coverage but protection is given to employees of subcontractors.

MISSOURI
Requirements:
Employers with five or more employees must carry workers’ compensation coverage. All construction businesses with one or more employees (including part-time, full-time, temporary, and seasonal) require coverage. Corporate officers count toward the employee total.
Exceptions:
Sole proprietors and partners are excluded from requiring coverage, but can choose to be covered. Close family member-employees and members of LLCs are covered unless they opt out. Other exemptions include farm laborers, domestic servants, real estate salespeople, and commercial motor-carrier owner/operators.

MONTANA
Requirements:
All employers must carry workers’ compensation insurance coverage for all employees. Businesses in the construction industry must provide coverage for all employees, both resident and nonresident, if and while they work in Montana.
Exceptions:
Sole proprietors can exclude themselves from coverage, but may choose to be included. Contractors do not have to be covered under a business’s workers’ compensation policy, but must provide proof that they are a certified independent contractor. Other exceptions include domestic/household workers, casual/infrequent employees, freelancers, newspaper carriers, licensed barbers or cosmetologists who contract with cosmetology establishments, petroleum land professionals, and real estate, securities, and insurance salespersons paid by commission.

NEBRASKA
Requirements:
All employers (including contractors) with one or more employees (including part-time employees and minors) must have workers’ compensation insurance.
Exceptions:
Sole proprietors with no employees are not required to carry coverage, but may choose to purchase coverage. Federal employees, railroad employees, most volunteers, and independent contractors are exempt, as are household/domestic servants and some employees of agricultural operations (unless the business chooses to provide coverage).

NEVADA
Requirements:
All employers with at least one employee must carry coverage. Subcontractors, independent contractors, and their employees must also be covered (unless they are independent enterprises). Construction businesses are required to have workers’ compensation insurance.
Exceptions:
Sole proprietors without employees are not required to carry coverage, but can choose to have coverage for themselves. Other exceptions include household/domestic workers, agricultural or horticultural labor, employment related to interstate commerce entities not subject to Nevada’s laws, employment covered by private disability and death benefit plans, employers working in Nevada temporarily and insured in another state (not including construction), and casual employees (lasting less than 20 days with a labor cost of under $500), among others.

NEW HAMPSHIRE
Requirements:
All employers with any employees (full- and part-time, and family members) must carry workers’ compensation insurance. Even non-profit organizations must carry coverage.
Exceptions:
Sole proprietors, partners, and self-employed individuals are not required to carry coverage for themselves, but may choose to. Business that use subcontractors must ensure they have coverage or could be held liable for any injuries to the subcontractor’s employee or employees. Coverage is not mandatory for corporations or LLCs with three or fewer executive officers or members and no other employees, but remains optional. However, once there is a fourth officer or member, workers’ compensation must be obtained.

NEW JERSEY
Requirements:
Any business with one or more employees, and any employer not covered by federal programs must carry coverage. Out-of-state employers might need coverage if they enter a contract of employment in New Jersey or if any work is performed in New Jersey.
Exceptions:
Sole proprietors with no employees are not required to carry coverage, but may choose to cover themselves.

NEW MEXICO
Requirements:
All businesses with three or more employees are required to have workers’ compensation insurance. Coverage may be purchased voluntarily if the business has fewer than three employees. Construction businesses must carry coverage regardless of their number of employees.
Exceptions:
Sole proprietors and are usually excluded from coverage, but can choose to cover themselves. Coverage is not required for domestic servants, real estate salespeople, or farm/ranch laborers. Executives or sole proprietors with a financial interest who are employed by a corporation or LLC can choose not to be covered, but the executive is still counted for determining the number of workers.

NEW YORK
Requirements:
Virtually every employer is required to provide workers’ compensation insurance for all employees (including family members, part- and full-time workers, and leased employees).
Exceptions:
Coverage is not required for sole proprietors or partners without employees, but they may choose to do so.

NORTH CAROLINA
Requirements:
All employers with three or more employees are required to carry workers’ compensation insurance for all employees (including minors and undocumented workers). Any business in which one or more employees’ work involves the use or presence of radiation must have compensation insurance.
Exceptions:
Employers with less than three employees. Corporate officers may choose to be excluded from insurance coverage, but are still counted in the employee count. Sole proprietors, LLC members, and partners are not automatically counted as an employee and may choose to be included. Agricultural employers are not required to carry workers’ compensation unless they have 10 or more non-seasonal agricultural workers. Domestic/household servants are exempt.

NORTH DAKOTA
Requirements:
All employers must have workers’ compensation insurance for all employees (part-time, full-time, or seasonal) before hiring.
Exceptions:
Sole proprietors, partners, and corporate officers are not required to have insurance coverage, but may choose to do so. Farm and ranch labor, household/domestic workers, verified independent contractors and children (under age 22) of the employer are exempt.

OHIO
Requirements:
All employers with one or more employees must carry workers’ compensation insurance.
Exceptions: Coverage is optional for sole proprietors, partners, family farm corporate officers, LLCs acting as partnerships, an LLC acting as sole proprietor, and individuals incorporated as a corporation (with no employees).

OKLAHOMA
Requirements:
All employers, even those with one part-time employee, must carry workers’ compensation insurance.
Exceptions:
Sole proprietors, LLCs, partners, and corporate officers are not required to have insurance company, but may choose to cover themselves. There is also a “family of five or fewer exemption,” where an employer with five or fewer total employees (all of whom are related by blood or marriage to the employer), are exempt. Some workers in agricultural/horticultural businesses, licensed real estate brokers, and most household/domestic workers are exempt.

OREGON
Requirements:
Employers with one or more employees must carry workers’ compensation insurance.
Exceptions:
Sole proprietors can purchase coverage for themselves, but are not required to.

PENNSYLVANIA
Requirements:
Workers’ compensation insurance coverage is mandatory for all employers with one or more employees (regardless of employee status, number of hours worked per week or whether the employee is a spouse or child).
Exceptions:
Coverage for sole proprietors, partners, and corporate officers is optional. Licensed real estate salespeople or brokers, licensed insurance agents who work on a commission-only basis, domestic or casual laborers, outworkers, farmers with one employee who works less than 30 days a year or earns less than $1,200 a year, and a spouse or child of the farmer employer under eighteen years of age are exempt.

RHODE ISLAND
Requirements:
Employers with four or more employees must carry workers’ compensation coverage.
Exceptions:
Employers with three or fewer employees, sole proprietors, partners, and independent contractors. Some real estate, agricultural and domestic/household employees may be exempt.

SOUTH CAROLINA
Requirements:
Employers that employ four or more regular full-time or part-time employees are required to carry workers’ compensation insurance. Employees include adults, minors, and seasonal workers.
Exceptions:
Sole proprietors, partners, and LLC members are not automatically included in coverage, but may choose to include themselves in their policy. Agricultural employees, railroad/railway companies and their employees, and employers with a total annual payroll during the previous year below $3,000 (regardless of the number of employees) are exempt, as are textile hall corporations and some commission-paid real estate salespeople. If a subcontractor lacks coverage, their injured employees would be covered under the employer’s workers’ compensation insurance.

SOUTH DAKOTA
Requirements:
All employers must carry insurance, regardless of the number of employees.
Exceptions:
Corporate officers and members of LLCs are included, but may choose to be excluded. Sole proprietors and partners are excluded, but may choose to be included. Domestic servants working under 20 hours per week and less than six weeks in any 13-week period, farm/agricultural laborers, independent contractors, real estate agents, and owner-operators of trucks certified as independent contractors are exempt.

TENNESSEE
Requirements:
Every employer in the construction or coal mining business or trades (regardless of the number of employees, including subcontractors), and every employer with five or more employees must carry coverage.
Exceptions:
Family members and part-time employees are included when determining the number of employees. Corporate officers are also included in the count (even if excluded from coverage). Sole proprietors, LLC members, and partners are excluded but may choose to be included.

TEXAS
Requirements:
Workers’ compensation insurance is optional for employers in Texas. Construction companies on contract for governmental entities, however, must have coverage.
Exceptions:
Sole proprietors, partners, corporate officers, and LLC members are included under state coverage, but can choose to opt out. Employers not carrying insurance are non-subscribers and must notify employees, but could be liable in a civil suit. Workers have the legal right to file compensation claims if they think they have a genuine case and their employer refuses to pay benefits.

UTAH
Requirements:
All employers are required to carry coverage for employees. Directors, officers, and LLC members are considered employees. To exclude themselves from mandatory coverage, they must do so through an insurance company.
Exceptions:
Sole proprietors, partners and LLCs are not required to have coverage but may choose to be covered. General contractors must ensure their subcontractors (including sole proprietors, partners, and corporate officers) carry coverage. Businesses excluded from mandatory coverage include employers of agricultural laborers, casual or domestic workers, and real estate brokers.

VERMONT
Requirements:
All employers with one or more employees (full- or part-time) must carry coverage.
Exceptions:
Sole proprietors and partners may purchase coverage, but are not required to. Corporate officers and LLC members are included in coverage requirements, but may choose to be exempt. Businesses that work with independent contractors must determine in writing who’s responsible for insurance. If the independent contractor lacks coverage, your business will be responsible. Casual employees whose work is not for the purpose of the employer’s trade or business, and employees in agriculture/farming for an employer whose payroll is less than $10,000 in a calendar year are exempt.

VIRGINIA
Requirements:
Employers who regularly employ two or more employees are required to carry coverage. Employees include part-time, seasonal and temporary workers, minors, trainees, immigrants, and working family members. Coverage is optional for businesses with fewer than two employees.
Exceptions:
Sole proprietors, partners, and LLC members are excluded from mandatory coverage, but may choose to cover themselves with their policy. Independent contractors are not automatically eligible for workers’ compensation coverage, but if the independent contractor employs two or more full- or part-time employees, those workers are eligible.

WASHINGTON
Requirements:
All employers with one or more employees must carry coverage.
Exceptions:
Sole proprietors, partners, corporate officers, and LLC members are excluded from mandatory coverage, but may choose to be included in their policy. Exemptions include domestic servants (but two or more employed regularly for over 40 hours/week must be covered), private residential gardeners and maintenance/repair workers, family farm laborers who are minors, musicians/entertainers at specific events, and cosmetologists/barbers who rent or lease their space.

WEST VIRGINIA
Requirements:All employers must carry coverage, with some exceptions.
Exceptions:
Independent contractors, agricultural employers with less than five employees, and casual employers with less than three workers are exempt. Sole proprietors, partners, LLC members, and corporate officers are all included in coverage, but can choose to be excluded. Other exemptions include domestic service employers, federally-covered employees, employers who are churches, and employers in organized professional sports (but coverage must be provided for employees who help run the business but do not participate in sporting activities).

WISCONSIN
Requirements:
All employers must carry coverage.
Exceptions:
Sole proprietors with no employees are not required to carry coverage, but may choose to cover themselves. Sole proprietors, LLC members, and partners don’t count toward the number of employees a business has, but corporate officers do (unless there are only two of them and the company has no other employees). Farmers who employ six or more workers on the same day for any 20 days during the calendar year must purchase insurance no later than ten days after the 20th day of employment. Out-of-state employers who have employees working in Wisconsin must have coverage, and the policy must be through an insurance company licensed in Wisconsin. Employers with one or more full- or part-time employees that have been paid combined gross wages of $500 or more in any calendar quarter for work done at one or more Wisconsin locations must have insurance by the 10th day of the first month of the next calendar quarter.

WYOMING
Requirements:
All employers must have coverage for all employees. Employees include workers under any contract of hire (express or implied, oral or written) and also include minors, aliens authorized to work, and aliens the employer reasonably believes to be authorized to work.
Exceptions:
Sole proprietors and partners are excluded from coverage for themselves. Corporate officers and LLC members may choose to be covered. Exemptions also include the following, who are not considered employees: casual laborers, independent contractors, spouses/dependents of an employer living in the employer’s household, individual child caregivers or babysitters whose wages are subsidized/paid by Wyoming’s department of family services, and private household/domestic employees, among others.