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Workers Compensation Laws - State by State Comparison

Date: June 02, 2011

Worker’s compensation insurance requirements for employers vary from state to state. The differences can be incredible and knowing what insurance requirements your state sets out for you is essential to protecting yourself as a small-business owner. Some states never require worker’s compensation insurance, some always require it, and for some, whether it is required depends on the number of employees your business has.

Jump to the state-by-state table »

For example, in Alabama, the manner or method by which you choose to insure your worker’s compensation liability is your decision and the state generally does not regulate worker’s compensation requirements for small business owners. Conversely, California requires worker’s compensation insurance in every work situation, regardless of the number of employees. Connecticut requires employers to have worker’s compensation insurance if they employ at least one employee, while Florida requires employers to have worker’s compensation insurance when the employer employs at least four employees.

Additionally, even if your state does require you to carry worker’s compensation insurance, states have many exemptions. The most common exemptions are for agricultural employees, corporations or exempted members of limited liability companies. Check your state’s worker’s compensation website for more information and see the chart below:

State Funds Workers' Comp. Administrators Employer FAQ
Alaska AK  The Alaska Workers' Compensation Act requires each employer having one or more employees in Alaska to obtain workers' compensation insurance, unless the employer has been approved as a self insurer.
Alabama AL  The manner or method by which you choose to insure your workers' compensation liability is your decision. Should you have any questions contact the Workers' Compensation Division at 1-800-528-5166 or (334) 242-2868.
Arizona AZ  Since January 1974, Arizona law has required all public and private employers with at least one employee to carry workers’ compensation insurance. The law makes coverage optional for domestic servants, working partners and sole proprietors.
Arkansas AR  Most employers in Arkansas with three or more employees are required by law to have workers’ compensation insurance coverage for their employees. There are exceptions to the three-or-more requirement, so employers with fewer than three should check with authorities before assuming they do not fall under the workers’ compensation laws. Employers in doubt may contact their agent or the commission’s Information Officer, its Operations/Compliance Division, or the Legal Advisor Division.
California CA  Required in every work situation, normally covered under your owners insurance, if not you can obtain a policy through the CA State Fund. The annual premium is based on the annual salary the employee makes, and then they monitor ALL the tax filings each quarter and then at the end of the year they will do a audit to make sure the client paid the correct premium.
 Colorado  CO  All public and private employers in Colorado, with limited exceptions, must provide workers' compensation coverage for their employees if one or more full or part-time persons are employed. A person hired to perform services for pay is presumed by law to be an employee. This includes all persons elected or appointed to public sector service and all persons appointed or hired by private employers for remuneration. There are a few exemptions to this definition.
 Connecticut  CT  All businesses with one(1) or more employees are required by law to have workers compensation insurance except those able to self-insure. There are exemptions for household employees who work 26 hours or less per week,  Sole proprietors, multiple member LLC's, corporate officers and partnerships, who may elect not to carry workers compensation insurance for themselves. However, they must always provide coverage for their employees.
 Delaware  DE  Employers with one or more employees are required to carry workers' compensation insurance. Employers may not charge an employee any portion of the premium or expense of carrying workers' compensation insurance. Workers' Compensation benefits have certain entitlement requirements which must be met in order to receive benefits. The requirements are established by law in Title 19, Delaware Code and are administered by the Delaware Department of Labor, Division of Industrial Affairs, office of Workers' Compensation. Workers considered to be independent contractors, rather than employees, are not covered.
 District of Columbia  DC  You are required to have Workers’ Compensation insurance coverage if you have 1 or more employees.
 Florida  FL  If you are in an industry, other than construction, and have four (4) or more employees, full-time or part-time, you are required to carry workers' compensation coverage (an exempted corporate officer does not count as an employee).
 Georgia  GA  Every employer, individual, firm, association, or corporation, regularly employing three or more persons, part-time or full-time, shall provide workers' compensation insurance coverage. Exempted officers of corporations or exempted members of limited liability companies shall not reduce the number of employees for this purpose.
 Hawaii  HI  Any employer, other than those excluded (section 386-1), having one or more employees, full-time or part-time, permanent or temporary, is required to provide WC coverage for its employees.
 Idaho  ID  Employers with one or more full-time, part-time, seasonal, or occasional employees are required to maintain a workers’ compensation policy unless specifically exempt from the law. Workers’ Compensation is required to be in place when the first employee is hired. Employment that may be exempt from required coverage includes: Household domestic service, Employment of family members living in the employer’s household (applies only to sole proprietorships)
 Illinois  IL  Required is every work situation, please visit the IL industrial commission for more information.
 Indiana  IN  All Indiana public and private employer-employee relationships (with a few exceptions, discussed below) are covered by the Worker's Compensation and Occupational Diseases Acts. It does not matter how many workers are employed in a business; all employees must be covered.
 Iowa  IA  Most employers are required to purchase workers’ compensation liability insurance. Insurance is mandatory if you have eligible employees, unless you apply to the Iowa Insurance Commissioner to become self-insured. Most employees who are injured in Iowa, working under contract of hire made in Iowa, or whose employment is principally localized in Iowa, are eligible for benefits if they have a job-related injury.
 Kansas  KS  Though Kansas workers compensation laws make it obligatory for all employers to carry occupational injury compensation insurance, there are certain exceptions also. For example, employers with annual payroll gross of $20000 or less are exempted from this legal requirement. The obligation applies to only those employers whose annual payroll gross exceeds $20000. Besides that, agricultural employers are also exempted in this regard.
 Kentucky  KY  As per Kentucky workers compensation laws, all employers whether they are running a private or a government organization are legally obligated to have an occupational injury compensation insurance policy in place. The number of employees does not matter in this regard. Even if there is just one employee working in an organization, it will be legally mandatory for the employer to carry the occupational injury insurance coverage.
 Louisiana  LA  All employers must provide workers compensation insurance for their employees, and must show proof that they have the financial means to carry Louisiana workers compensation insurance. There are some exemptions such as the crews of any airplane working in dusting or spraying operations, real estate brokers, musicians and performers, and others.
 Maine  ME  Any business with one (1) or more employees must provide workers compensation insurance coverage.
 Maryland  MD  With few exceptions, every employer with one (1) or more employees is required by law to provide workers' compensation insurance. Agricultural employers with less than three (3) employees or an annual payroll for full-time employees which does not exceed $15,000, are not required to carry worker's compensation insurance.
 Massachusetts  MA  All businesses must carry Massachusetts workers compensation insurance coverage regardless of the amount of hours worked. This also includes owners that are considered employees. Employees in domestic service who work at least 16 hours a week also require coverage.
 Michigan  MI  All employers are required by Michigan Law to carry a workers compensation insurance policy. There are NO exemptions provided for workers compensation insurance.
 Minnesota  MN  It is very important to note that unlike the majority of other states, Minnesota does not provide any waiver to any of the employers working in this state. All employers are legally obligated to provide insurance coverage to all their employees, including the ones that are not even US citizens or are still minor.
 Mississippi  MS  Most of the employees qualify to use the workers compensation system in the state of Florida. However, there can be exceptions. For example, if you are working for an employer who has less than five employees in their organization, you may not be covered under such insurance plan. Employers with less than 5 employees are not obligated to carry workers compensation insurance coverage. Other workers that may not be covered include farm workers and independent contractors.
 Missouri  MO  Workers compensation coverage is required for all employers that have five or more employees. However, if a business is in the construction industry then coverage must be provided if there are one or more employees. It is important to note that Missouri law does not distinguish between employees of different employment statuses. The statutory definition of "employee" includes both full and part-time employees, seasonal, and even temporary employees.
 Montana  MT  The laws in Montana have made it legally mandatory for the employers to carry workers compensation insurance coverage for all their employees.
 Nebraska  NE  The laws require all employers to carry occupational injury insurance policies in order to ensure timely payments to injured workers as and when needed.
 Nevada  NV  As per Nevada workers compensation laws, all employers who have at least one worker must carry proper occupational injury insurance coverage. However, they have the option either to be self-insured or to buy the coverage from a Nevada based private insurance carrier. Some employers may qualify for certain exemptions as well. For example, if the employee is already covered under a private disability plan that ensures equal or higher benefits may not qualify for occupational injury compensation.
 New Hampshire  NH  Any business who employs even one full or part-time employee is required to provide workers compensation insurance, regardless of that employee’s family relation (son, daughter, husband etc.)
 New Jersey  NJ  New Jersey law requires that all New Jersey employers, not covered by Federal programs, have workers compensation coverage or be approved for self-insurance. Even out-of-state employers may need workers compensation coverage if a contract of employment is entered into in New Jersey or if work is performed in New Jersey.
 New Mexico  NM  Employers with three or more employees are required to carry workers compensation insurance through a New Mexico workers compensation policy or a New Mexico certified self-insurance program. Employers in the construction industry, however, must carry coverage regardless of the number of employees.
 New York  NY  New York workers compensation laws cover all types of employees regardless of whether they are working as a part-time, fulltime or a leased worker. The laws specifically mention that teachers for public schools, County workers working under hazardous conditions, and even volunteers working for a profitable business can also qualify for occupation injury compensation benefits.
 North Carolina  NC  As per these laws, all employers who have more than three employees or workers working for them are legally required to carry proper occupational injury insurance. However, if there are less than three employees in an organization, the employer can be exempted from this insurance requirement.
 North Dakota  ND  As per the laws, it is legally mandatory for all employers to carry workers compensation insurance coverage. Unlike the laws applicable in the majority of other states in the US, there are no numeral exceptions under North Dakota workers compensation laws. Besides that, waivers are also not permitted.
 Ohio  OH  All employers with one(1) or more employees must carry workers compensation insurance coverage
 Oklahoma  OK  Oklahoma workers compensation laws have made it legally mandatory for all employers to carry occupational injury coverage to all employees. No waivers are allowed to anyone. Even those who have just one part-time worker must meet these insurance requirements.
 Oregon  OR  As per Oregon workers compensation laws, it is compulsory for all employers to carry proper insurance coverage for occupational injuries and illnesses that employees may suffer from. There are no waivers permitted to any employer. Even if there is just one part-time worker in the organization, there must be an adequate workers comp insurance policy in place. Unlike the majority of other states, there are no numeral exceptions applicable in the state of Oregon.
 Pennsylvania  PA  As per Pennsylvania workers compensation laws, it is mandatory for all employers provide insurance coverage to their employees against the incidents of occupational injuries or illnesses. However, the employers have the option to provide the insurance by through self-insuring, through a competitive state fund, or through a private insurance carrier. Even domestic servants and agricultural employees are entitled to compensation benefits in case they get injured while perform their tasks assigned to them by their employers.
 Rhode Island  RI  In general, Rhode Island workers compensation laws make it mandatory for all employers to carry occupational injury compensation insurance coverage, but there are certain exemptions as well, such as for independent contractors, sole proprietors, and partners. Besides that, some agricultural and real employers and those having domestic servants may also be exempted from this insurance requirement.
 South Carolina  SC  Any South Carolina employer who regularly employs four or more workers full-time or part-time is required to have workers compensation insurance.
Agricultural employees, railroads, and railway express companies and their employees, and employers who had a total annual payroll during the previous year of less than $3,000, regardless of the number of workers employed during that period are exempt.
 South Dakota  SD  Though certain waivers are permitted in specific cases, in general, all employers must carry adequate amount of insurance coverage as required under the South Dakota workers compensation laws. Employers have the option either to buy this coverage from a private insurance carrier or to get self-insured. There are certain basic requirements that employers must fulfill in order to get self-insured; for example, they must submit certain documents to prove that they are financially capable enough to meet the compensation requirements as and when needed.
 Tennessee  TN  Tennessee workers compensation laws make it legally mandatory for every employer with more than five employees to carry insurance coverage for work-related accidents. However, this rule does not apply to those engaged in construction business (including subcontractors); even if they have five or less than five employees in their organizations, they must carry workers compensation insurance coverage. Certain waivers are also permitted in specific cases.
 Texas  TX  Texas workers compensation laws do not make it mandatory for all employers to carry occupational injury insurance coverage. There are however still some exceptions, such as construction contracts for governmental entities; in such cases, the insurance requirements are mandatory. But, workers have the legal right to file compensation claims if they think they have a genuine case and the employer is still refusing to pay monetary benefits.
 Utah  UT   All employers are legally required to carry appropriate workers compensation insurance coverage. However, the organizations with agricultural workers that have a payroll of up to $50000 are exempted from this legal requirement.
 Vermont  VT  It is mandatory for all employers to carry adequate amount of insurance coverage. There are no numerical exceptions to this legal requirement but waivers are permitted in specific cases.
 Virginia  VA  Virginia law requires every employer who regularly employs three or more full-time or part-time employees to purchase and maintain workers' compensation insurance. Employers with fewer than three employees may voluntarily come under the Act
 Washington  WA  It is compulsory for all employers to carry appropriate insurance coverage to ensure timely payments of compensation benefits as and when needed. There are no numerical exceptions. Even any types of waivers are also not permitted.
 West Virginia  WV  Though it is legally mandatory for all employers to carry adequate insurance coverage, there are a few employers who are still exempted from this requirement, such as an agricultural employer with less than five workers and a casual employer with less than three workers.
 Wisconsin  WI  Those who have less than three employees in their organizations have been exempted from this requirement. No waivers are permitted under the laws though. Even domestic servants must also be provided with voluntary worker’s compensation coverage.
Wyoming WY It is also important to note that not all employers can choose to be self-insured, as there are certain eligibility criteria set by the laws to qualify for the same. There are no numerical exceptions to this legal requirement and even waivers are also not permitted.

 

Note: NFIB offers worker's compensation savings in many states.

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