Hey there! Wondering what states require workers compensation insurance? You’re in luck! Aupeo has compiled all the essential information to help you understand your obligations.
Contents
- 0.1 Overview of Workers Compensation Insurance Requirements in the U.S.
- 0.2 Mandatory Workers’ Compensation Insurance States
- 0.3 Exemptions and Exceptions in Workers Compensation Requirements
- 0.4 Penalties for Non-Compliance in Mandatory States
- 0.5 Voluntary Workers Compensation States and Their Policies
- 1 Conclusion
Overview of Workers Compensation Insurance Requirements in the U.S.
Workers’ compensation insurance is a critical component of the American workplace, designed to protect employees who suffer job-related injuries or illnesses by covering medical expenses and providing wage replacement benefits.
Every state has unique regulations, but the overarching goal is universal: to offer a financial safety net for employees while shielding employers from direct lawsuits.
The system benefits employees by providing immediate assistance without the need for legal action, and it protects employers by limiting liability and controlling the potential for costly legal disputes.
Mandatory Workers’ Compensation Insurance States
Here’s a comprehensive table detailing state-specific statutes, departments, and exemptions for Workers’ Compensation across the United States:
| State | Workers’ Compensation Statute | State Workers’ Comp Department | Exemptions and Special Rules |
|---|---|---|---|
| Alabama | Alabama Code §25-5-1 et seq. | Alabama Department of Labor | Not required for businesses with less than five employees. Does not cover casual employees, domestic servants, farm laborers, licensed real estate agents or product demonstrators. |
| Alaska | AS §23.30.005, et. seq | Department of Labor & Workforce Development | Doesn’t cover contract entertainers, commercial fishermen, domestic servants, harvest/transient workers or taxi cab drivers. |
| Arizona | Arizona Revised Statutes Annotated §§23-901, et seq. | Industrial Commission of Arizona | Doesn’t cover casual employees or independent contractors. |
| Arkansas | Arkansas Code Annotated § 11-9-101 et seq. | Arkansas Workers’ Compensation Commission | Doesn’t cover casual employees, farm laborers, inmates, or state employees. |
| California | California Labor Code Division 3, section 2700 through Division 4.7, section 6208 | Department of Industrial Relations | Doesn’t cover amateur sporting event officials; deputy clerks; deputy sheriffs; domestic workers employed by parents, spouse or child; volunteers for non-profit recreational camps or ski patrols. Not providing workers compensation payments can result in a year in jail and failure to insure can cost a business $100,000 in fines. |
| Colorado | Colorado Revised Statutes §8-40-101, et seq. | Department of Labor and Employment | Doesn’t cover drivers under lease agreements with common or contract carriers, inmates or volunteers. |
| Connecticut | Connecticut General Statutes Sections 31-275 through 31-355a, et seq. | Workers’ Compensation Commission | Doesn’t cover casual employees, independent contractors or sole proprietors. |
| Delaware | Delaware Code Annotated Title 19, §§2301-2397 | Department of Labor | Doesn’t include a spouse or minor child of a farm employer not named on insurance, anyone who sells products not in a space controlled by the employer, or casual employees. |
| District of Columbia | District of Columbia Code Annotated §32-1501, et seq. | Department of Employment Services | An employee whose employer is an uninsured subcontractor can assert a claim against the supervising general contractor. |
| Florida | Chapter 440, Florida Statutes, et seq. | Department of Financial Services | Doesn’t apply to: Bands, orchestras, musical or theater performers and DJs, Casual employees, Independent contractors (excluding construction industry), Licensed real estate brokers, Some sports officials, Some taxi cab or other vehicle for hire operators. |
| Georgia | Official Code of Georgia Annotated §§34-9-1, et seq. | Georgia State Board of Workers’ Compensation | Excludes rail common carriers engaged in interstate/intrastate commerce, domestic servants, farm laborers, independent contractors and licensed real estate salespeople or associate brokers. |
| Hawaii | Hawaii Revised Statutes, Chapter 386 | Department of Labor and Industrial Relations | Some contractors are exempt. |
| Idaho | Idaho Code §72-101, et. seq. | Industrial Commission | Doesn’t apply to casual workers, domestic servants, officials of secondary school athletics, pilots of spraying or dusting planes, real estate brokers and salespeople, volunteer ski patrol. |
| Illinois | 820 Illinois Compiled Statutes Annotated 305/1, et seq. | Illinois Workers’ Compensation Commission | Doesn’t apply to farmers, jurors, or real estate brokers and salespeople. Business owners who fail to make payments face fines of $500 per day with a $10,000 minimum fine. |
| Indiana | Ind. Code §22-3-1-1 et seq. | Workers’ Compensation Board of Indiana | Doesn’t apply to agricultural workers, casual laborers, employees of fire or police departments that have pension funds, household employees and some railroad and railyard employees. |
| Iowa | Iowa Code §85.1 et seq. | Iowa Workforce Development | Doesn’t apply to agricultural employees earning less than $2,500 in the year prior to the injury, casual or household employees who earned less than $1,500 in the year prior to injury or some officers of corporations or farms. |
| Kansas | Kansas Statutes Annotated §44-501 et seq. | Department of Labor | No exceptions. Applies to anyone who has entered into service or apprenticeship. |
| Kentucky | Kentucky Revised Statutes § 342.0011 et seq.;803 Kentucky Administrative Regulations. 25:009 et seq. | Kentucky Labor Cabinet | Doesn’t apply to domestic servants (if there are less than two employed in the home for 40 or less hours per week) or maintenance or similar type workers employed in a private home if the employer has no other employees subject to workers’ comp. |
| Louisiana | Louisiana Revised Statutes Annotated §23:1021 et seq. Louisiana Revised Statutes Annotated §33:2581 | Louisiana Workforce Commission | Doesn’t apply to employees of private homes, employees of unincorporated farms or musicians or other performers under contract. |
| Maine | Maine Revised Statutes Annotated, title 39-A, or 39-A M.R.S.A. §101 et seq. | Workers’ Compensation Board | Doesn’t apply to certain agricultural employees, independent contractors or people covered by admiralty law. |
| Maryland | Maryland Code Ann., Lab & Empl. §9-101 (2014) et seq.; Code of Maryland Regulations (COMAR) Title 14, §09.01.01 et seq. | Workers’ Compensation Commission | Applies to any regular payroll employee but not to independent contractors. |
| Massachusetts | Massachusetts General Laws, Chapter 152 | Executive Office of Labor and Workforce Development | Doesn’t apply to casual employees, people employed in professional athletics, real estate brokers and others who work on commission only or those employed in interstate or foreign commerce. |
| Michigan | Michigan Compiled Laws Annotated 418.101-941 | Department of Licensing and Regulatory Affairs | Exclusions apply for domestic workers, real estate brokers or agents, some agricultural employees and some smaller employers. |
| Minnesota | Minnesota Statutes Annotated Ch. 175A and 176, et seq. | Department of Labor and Industry | Doesn’t apply to farmers or family members of farmers who exchange work with other farmers. |
| Mississippi | Section 71-3-1 et. seq., MISS. CODE ANN | Workers’ Compensation Commission | Doesn’t apply to independent contractors. |
| Missouri | Chapter 287 R.S.Mo. 2005 | Department of Labor and Industrial Relations | Doesn’t apply to direct sellers, domestic servants, farm laborers, inmates, owner/operators of leased trucks in interstate commerce, sports officials or volunteers. |
| Montana | Mont. Code Ann. §39-71-101, et.seq | Department of Labor and Industry | Doesn’t apply to: Casual employment, Cosmetologist or barbers, Dependent member of the employer’s family, Domestic servants, Direct sellers, Freelance photographers and authors, Jockeys, Managers of a ditch company, Newspaper deliverers, Ordained ministers, People working solely within the boundaries of Indian reservations, Petroleum land workers, Real estate brokers or salesmen, Some officials at athletic events, Some sole proprietors |
| Nebraska | Nebraska Revised Statutes §48-101 et. seq. | Workers’ Compensation Court | Doesn’t apply to agricultural employees, domestic servants or railroad employees engaged in interstate commerce. |
| Nevada | Nev. Rev. Stat. Chapters 616A-616D, Nev. Rev. Stat. Chapter 617 | Department of Business & Industry | Doesn’t apply to casual employees, direct salespeople, domestic workers, members of the clergy, musicians (who work for two consecutive days or less), sports officials paid nominal fees, theatrical performers or voluntary ski patrol. |
| New Hampshire | New Hampshire Revised Statutes Annotated 281-A | Workers’ Compensation Division | Doesn’t apply to direct sellers, railroad employees engaged in interstate commerce, real estate brokers/appraisers or agents or those providing services for residential placement of individuals with disabilities. |
| New Jersey | New Jersey Statutes Annotated 34:15-1 et seq. | Department of Labor and Workforce Development | Doesn’t apply to casual workers, domestic workers, employees who are willfully negligent, independent contractors or inmates. |
| New Mexico | New Mexico Workers’ Compensation Act, New Mexico Statutes Annotated §§52-1-1, et seq. | Workers’ Compensation Administration | Doesn’t apply to domestic servants, farm employees, real estate agents or those with waiver from the state. |
| New York | Workers’ Compensation Law of the State of New York | Workers’ Compensation Board | Doesn’t apply to: Anyone engaged in yard work or household chores or making repairs or painting in and about a one-family owner-occupied residence, Babysitters and minors over the age of 14 engaged in casual employment for one family Clergymen, Domestic employees working less than 40 hours per week, Employees of municipalities and other political subdivisions who are not engaged in hazardous employment, Longshoremen and harbor workers, Railroad employees, Uniformed sanitation workers, firefighters and police officers in the employment of the City of New York. Failure to make workers compensation payments can lead to felony charges. |
| North Carolina | N.C. Gen. Stat. §97 | Industrial Commission | Doesn’t apply to casual employees. |
| North Dakota | North Dakota Century Code Title 65 (Chapters 65-01 through 65-10) | Workforce Safety and Insurance | Doesn’t apply to anyone doing something illegal, casual employees, independent contractors, spouse or child under age 22 of the employer, members of boards of directors, newspaper delivery people or real estate brokers and salespeople. Workers’ compensation insurance must be bought from a state fund. |
| Ohio | Ohio Revised Code §4121.01 et. seq. Ohio Administrative Code §4121-01 et. seq. | Bureau of Workers’ Compensation | No exemptions. Workers’ compensation insurance must be bought from a state fund. |
| Oklahoma | Okla. Stat. tit. 85, §§301-413 | Workers’ Compensation Court | Does not apply to horticulture workers not using motorized machines, anyone employed by an employer with less than five employees who are all related, employees of tax-exempt youth sports leagues, domestic servants in a private home, real estate brokers, sole proprietors, volunteers, owner-operators of trucks or workers who provide medical care or social services. |
| Oregon | Workers’ Compensation Law. Or. Rev. Stat. §656.001 | Workers’ Compensation Division | Doesn’t apply to casual employees or inmates. |
| Pennsylvania | Worker’s Compensation Act of June 24, 1996, P.L. 350, No. 57 | Bureau of Workers’ Compensation | Doesn’t cover casual employees. Intentional noncompliance with workers’ compensation laws is a felony that can result in a sentence of up to seven years. |
| Rhode Island | R.I. Gen. Laws. 27-7.1-1, et. seq.; | Department of Labor & Training | Doesn’t apply to casual employees, farmers or farm laborers, nursery workers, salespersons including real estate brokers and sworn employees of the state. |
| South Carolina | S.C. Code Ann. §42-1-110 et seq. | Workers’ Compensation Commission | Doesn’t apply to casual employees. |
| South Dakota | SDCL Title 62 | Department of Labor and Regulation | Doesn’t apply to domestic servants working less than 20 hours a week, farm workers, independent contractors or volunteers. |
| Tennessee | T.C.A. §50-6-101, et seq. | Department of Labor and Workforce Development | Doesn’t apply to some undocumented workers. |
| Texas | Texas Labor Code Annotated § 401.001 et. seq | Department of Insurance | Doesn’t apply to federal employees or independent contractors. |
| Utah | Utah Code Annotated §34A-2-101, et seq. | Labor Commission | Doesn’t apply to real estate brokers. |
| Vermont | Vermont Statutes Annotated title 21, § 601 et seq. | Department of Labor | Doesn’t apply to assistant judges, casual employees, those engaged in amateur sports, domestic workers, farm workers, illegally hired minors, members of an employers family who live in their home or sole proprietors or partners in an unincorporated business. |
| Virginia | Virginia Workers’ Compensation Act, Title 65.2 Code of Virginia 1950 | Workers’ Compensation Commission | Doesn’t apply to anyone whose employment is not within the usual course of the employer’s business. |
| Washington | RCW 51.04.010 to 51.98.080 | Department of Labor and Industries | Exemptions include: Booth renters, Certain workers for businesses registered within the Registration of Contractors or licensed Electricians and Electrical Installations, Children employed by parents on a family farm, Domestic workers, Employees not engaged in the business they were hired for, Entertainers hired for specific performances, Gardeners, Home maintenance workers, Insurance producers, Jockeys, Newspaper delivery workers, Services performed for sustenance or help, Sole proprietors or partners, Some officers of corporations. Workers’ compensation insurance must be bought from a state fund. |
| West Virginia | W. Va. Code §23-1-1 et seq. | Offices of the Insurance Commission | Doesn’t apply to companies with fewer than five employees, church workers, casual employees, domestic servants, federal employees, volunteer police or rescue or certain employees engaged in professional sports. |
| Wisconsin | Wis. Stat. §102.01-.89 (2011) | Department of Workforce Development | Doesn’t apply to domestic servants or most volunteers. |
| Wyoming | Wyoming Statutes §27-14-101, et seq. | Department of Workforce Services | Doesn’t apply to: Casual employees, Childcare workers employed by the state, Elected officials, Employees in private homes, Federal government employees, Foster parents, Independent contractors, Officers of corporations, Professional athletes, Sole proprietors, Volunteers. Workers’ compensation insurance must be bought from a state fund. |
This table serves as a detailed guide for understanding state-specific Workers’ Compensation statutes, the responsible departments, and key exemptions and special rules.
It can be particularly useful for employers and HR professionals to ensure compliance with local regulations. Source: https://www.forbes.com/advisor/legal/workers-comp/workers-compensation-laws/.
Exemptions and Exceptions in Workers Compensation Requirements
Despite the widespread mandate, there are notable exceptions that vary by state. Small businesses often wonder if they need to provide workers compensation.
In states like Missouri, businesses with fewer than five employees may be exempt, offering small business owners some flexibility.
Additionally, sectors such as agriculture and independent contractors often have different rules. For instance, in Georgia, certain farm laborers and domestic workers do not require filing for workers comp in mandatory states.
Understanding these exemptions is crucial for business owners to navigate their legal responsibilities effectively. For more info about Best Workers Comp Insurance For Small Business 2024 here.
Penalties for Non-Compliance in Mandatory States
Failure to comply with workers compensation laws can lead to significant consequences. States may impose fines, stop-work orders, and even criminal charges.
For example, in Florida, the penalty for non-compliance can include a fine equal to twice the amount the employer would have paid in premiums during the uninsured period or $1,000, whichever is greater.
These penalties underscore the importance of adherence to state laws and the severe repercussions for businesses that neglect this crucial insurance requirement.
Voluntary Workers Compensation States and Their Policies
In states like Texas, workers compensation insurance is optional. Businesses in these states choose to participate in the system for several reasons: to attract better talent, improve employee satisfaction, and protect against lawsuits.
Even though it’s not mandated, opting in can provide substantial benefits, including legal immunity from most employee injury claims.
This can be a strategic decision, particularly for businesses in high-risk industries or those looking to enhance their employee benefits package as a competitive differentiator.
Conclusion
Knowing what states require workers compensation insurance is crucial for your business’s compliance. For more valuable insights, visit Aupeo.com today!
