A Basic Overview of Workers Compensation Requirements by State

Aug 10, 2020Blog0 comments

Keeping your business safe—with or without a pandemic—requires knowledge about your state’s workers compensation requirements. To comply, your company needs the right coverage for the type of work you do and the size of your company. 

How can employers know how to comply with state regulations? While this isn’t an exhaustive list, we’ve compiled a basic overview of workers compensation requirements by state.

Requirements By State

When planning the workers compensation coverage for your company, use this information as a high-level overview of each state’s requirements. 

Alabama—Georgia

State by state requirements include:

  • Alabama—If you employ five or more employees, your business must carry worker’s comp coverage. However, there are exceptions for several types of specific industries.
  • Alaska—When you hire your first employee, you need workers’ compensation coverage.
  • Arizona—Companies must provide coverage when hiring one or more employees. Coverage applies to full or part-time workers.
  • Arkansas—Coverage begins at three or more employees. However, there are exceptions to this rule.
  • California—In-state employers with one employee must provide workers compensation. If your home office is out of state, you must offer coverage for employees in California. 
  • Colorado—This state requires coverage for business employing one person, part-time or full-time. “Employed” can include anyone you pay for any type of work.
  • Connecticut—Businesses with one or more employees must offer worker’s compensation. Some exceptions apply to employees who work primarily from a residence.
  • Delaware—All employees, except farm workers, must receive coverage. However, many farming companies choose to offer coverage to workers.
  • District of Columbia—Hiring one or more employees requires workers compensation coverage. This includes employing a domestic worker, depending on how many hours they work for you.
  • Florida—All construction companies with at least one employee must offer coverage. For non-construction businesses, you’ll need to provide coverage at your fourth employee.
  • Georgia—Your third employee triggers the requirements for workers comp. Businesses might also have some responsibility for a subcontractor’s employees.

Hawaii—Louisiana

These state requirements include:

  • Hawaii—Businesses must offer coverage after hiring the first employee. This includes temporary workers.
  • Idaho—This state’s coverage requirements begin at your first employee. Full-time, part-time, occasional, and seasonal workers can receive coverage.
  • Illinois—If you employ only one part-time employee, Illinois requires businesses to provide workers comp insurance. 
  • Indiana—There are no exceptions to worker’s compensation coverage in Indiana. All employees receive coverage.
  • Iowa—Iowa doesn’t specify a minimum number of employees. However, the state requires most employers to provide coverage.
  • Kansas—Businesses with a gross payroll of $20,000 or more must provide workers comp insurance to employees. 
  • Kentucky—Companies must provide coverage to all employees. This includes employees of any working status.
  • Lousiana—Similar to Kentucky, coverage extends to all employees, including contractors.

Maine—Montana

Follow these requirements, including:

  • Maine—Employing at least one worker requires businesses to offer coverage. You could also be liable for your subcontractors’ employees.
  • Maryland—Most businesses with any employees fall under the state’s requirement to provide coverage. 
  • Massachusetts—If you pay yourself as an employee, you must provide workers compensation for yourself—even without other employees. There are some exceptions to this rule.
  • Michigan—Michigan has a lot of exemptions to different types of employer situations. In general, employers must offer coverage when hiring one or more employees.
  • Minnesota—Workers compensation extends to minors and non-U.S. citizens. All businesses must offer coverage.
  • Mississippi—At five employees, businesses must provide workers comp coverage. 
  • Missouri—Any construction business with at least one employee must offer coverage. For most other companies, requirements begin at five employees.
  • Montana—All businesses must provide workers comp for all employees. For construction companies, coverage must extend to nonresidents while working in the state. 

Nebraska—Rhode Island

These states require:

  • Nebraska—All full-time and part-time employees receive coverage. 
  • Nevada—Employers must cover all employees. In most cases, businesses must also provide coverage to contractors.
  • New Hampshire—This state requires all non-profits and for-profit companies to offer workers comp insurance.
  • New Jersey—If your business doesn’t qualify for federal coverage, you must offer it to all employees. This includes out of state workers.
  • New Mexico—At three or more employees, employers must provide coverage. 
  • New York—This state offers very few exceptions to the requirements for coverage. 
  • North Carolina—Any business with three or more employees must offer workers compensation coverage. 
  • North Dakota—Businesses must have coverage in place before hiring any employees. 
  • Ohio—With your first employee, businesses must offer coverage. 
  • Oklahoma—Hiring only one part-time employee requires employers to provide coverage. 
  • Oregon—The state requires coverage from all employers with at least one employee.
  • Pennsylvania—At one employee, you must provide coverage, regardless of the employee’s status. 
  • Rhode Island—Hiring a fourth employee requires companies to offer coverage to all employees.

South Carolina—Wyoming

Follow these rules, including:

  • South Carolina—At four or more employees (full-time, part-time, or seasonal), businesses must provide workers compensation. 
  • South Dakota—Businesses must provide coverage regardless of the number of employees.
  • Tennessee—Coal industry employers must provide coverage to all employees. Other businesses start worker’s comp coverage at five or more employees.
  • Texas—This is the only state that makes workers compensation insurance optional for most employers—with some exceptions for a few specific types of industries.
  • Utah—All employees receive coverage, including directors and officers.
  • Vermont—One or more employees require coverage.
  • Virginia—When hiring your second employee, you must offer workers comp. 
  • Washington—All employees receive coverage.
  • West Virginia—With a few exceptions, West Virginia requires coverage for all employees.
  • Wisconsin—Hiring three or more employees (either full- or part-time) requires coverage. 
  • Wyoming—Employers must offer coverage to all employees, including minors.

For additional information about your state’s requirements, one of our consultants can help!. 

We Can Help You Understand Workers Compensation Requirements By State

In some states, employers face severe penalties for failing to comply with workers compensation requirements by state. Let us help you avoid penalties! Contact us for expert help with your coverage. 

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