What States Require Workers Compensation Insurance?

What States Require Workers Compensation Insurance

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.

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

Mandatory Workers' Compensation Insurance States

Here’s a comprehensive table detailing state-specific statutes, departments, and exemptions for Workers’ Compensation across the United States:

StateWorkers’ Compensation StatuteState Workers’ Comp DepartmentExemptions and Special Rules
AlabamaAlabama Code §25-5-1 et seq.Alabama Department of LaborNot required for businesses with less than five employees. Does not cover casual employees, domestic servants, farm laborers, licensed real estate agents or product demonstrators.
AlaskaAS §23.30.005, et. seqDepartment of Labor & Workforce DevelopmentDoesn’t cover contract entertainers, commercial fishermen, domestic servants, harvest/transient workers or taxi cab drivers.
ArizonaArizona Revised Statutes Annotated §§23-901, et seq.Industrial Commission of ArizonaDoesn’t cover casual employees or independent contractors.
ArkansasArkansas Code Annotated § 11-9-101 et seq.Arkansas Workers’ Compensation CommissionDoesn’t cover casual employees, farm laborers, inmates, or state employees.
CaliforniaCalifornia Labor Code Division 3, section 2700 through Division 4.7, section 6208Department of Industrial RelationsDoesn’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.
ColoradoColorado Revised Statutes §8-40-101, et seq.Department of Labor and EmploymentDoesn’t cover drivers under lease agreements with common or contract carriers, inmates or volunteers.
ConnecticutConnecticut General Statutes Sections 31-275 through 31-355a, et seq.Workers’ Compensation CommissionDoesn’t cover casual employees, independent contractors or sole proprietors.
DelawareDelaware Code Annotated Title 19, §§2301-2397Department of LaborDoesn’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 ColumbiaDistrict of Columbia Code Annotated §32-1501, et seq.Department of Employment ServicesAn employee whose employer is an uninsured subcontractor can assert a claim against the supervising general contractor.
FloridaChapter 440, Florida Statutes, et seq.Department of Financial ServicesDoesn’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.
GeorgiaOfficial Code of Georgia Annotated §§34-9-1, et seq.Georgia State Board of Workers’ CompensationExcludes rail common carriers engaged in interstate/intrastate commerce, domestic servants, farm laborers, independent contractors and licensed real estate salespeople or associate brokers.
HawaiiHawaii Revised Statutes, Chapter 386Department of Labor and Industrial RelationsSome contractors are exempt.
IdahoIdaho Code §72-101, et. seq.Industrial CommissionDoesn’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.
Illinois820 Illinois Compiled Statutes Annotated 305/1, et seq.Illinois Workers’ Compensation CommissionDoesn’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.
IndianaInd. Code §22-3-1-1 et seq.Workers’ Compensation Board of IndianaDoesn’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.
IowaIowa Code §85.1 et seq.Iowa Workforce DevelopmentDoesn’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.
KansasKansas Statutes Annotated §44-501 et seq.Department of LaborNo exceptions. Applies to anyone who has entered into service or apprenticeship.
KentuckyKentucky Revised Statutes § 342.0011 et seq.;803 Kentucky Administrative Regulations. 25:009 et seq.Kentucky Labor CabinetDoesn’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.
LouisianaLouisiana Revised Statutes Annotated §23:1021 et seq. Louisiana Revised Statutes Annotated §33:2581Louisiana Workforce CommissionDoesn’t apply to employees of private homes, employees of unincorporated farms or musicians or other performers under contract.
MaineMaine Revised Statutes Annotated, title 39-A, or 39-A M.R.S.A. §101 et seq.Workers’ Compensation BoardDoesn’t apply to certain agricultural employees, independent contractors or people covered by admiralty law.
MarylandMaryland Code Ann., Lab & Empl. §9-101 (2014) et seq.; Code of Maryland Regulations (COMAR) Title 14, §09.01.01 et seq.Workers’ Compensation CommissionApplies to any regular payroll employee but not to independent contractors.
MassachusettsMassachusetts General Laws, Chapter 152Executive Office of Labor and Workforce DevelopmentDoesn’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.
MichiganMichigan Compiled Laws Annotated 418.101-941Department of Licensing and Regulatory AffairsExclusions apply for domestic workers, real estate brokers or agents, some agricultural employees and some smaller employers.
MinnesotaMinnesota Statutes Annotated Ch. 175A and 176, et seq.Department of Labor and IndustryDoesn’t apply to farmers or family members of farmers who exchange work with other farmers.
MississippiSection 71-3-1 et. seq., MISS. CODE ANNWorkers’ Compensation CommissionDoesn’t apply to independent contractors.
MissouriChapter 287 R.S.Mo. 2005Department of Labor and Industrial RelationsDoesn’t apply to direct sellers, domestic servants, farm laborers, inmates, owner/operators of leased trucks in interstate commerce, sports officials or volunteers.
MontanaMont. Code Ann. §39-71-101, et.seqDepartment of Labor and IndustryDoesn’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
NebraskaNebraska Revised Statutes §48-101 et. seq.Workers’ Compensation CourtDoesn’t apply to agricultural employees, domestic servants or railroad employees engaged in interstate commerce.
NevadaNev. Rev. Stat. Chapters 616A-616D, Nev. Rev. Stat. Chapter 617Department of Business & IndustryDoesn’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 HampshireNew Hampshire Revised Statutes Annotated 281-AWorkers’ Compensation DivisionDoesn’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 JerseyNew Jersey Statutes Annotated 34:15-1 et seq.Department of Labor and Workforce DevelopmentDoesn’t apply to casual workers, domestic workers, employees who are willfully negligent, independent contractors or inmates.
New MexicoNew Mexico Workers’ Compensation Act, New Mexico Statutes Annotated §§52-1-1, et seq.Workers’ Compensation AdministrationDoesn’t apply to domestic servants, farm employees, real estate agents or those with waiver from the state.
New YorkWorkers’ Compensation Law of the State of New YorkWorkers’ Compensation BoardDoesn’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 CarolinaN.C. Gen. Stat. §97Industrial CommissionDoesn’t apply to casual employees.
North DakotaNorth Dakota Century Code Title 65 (Chapters 65-01 through 65-10)Workforce Safety and InsuranceDoesn’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.
OhioOhio Revised Code §4121.01 et. seq. Ohio Administrative Code §4121-01 et. seq.Bureau of Workers’ CompensationNo exemptions. Workers’ compensation insurance must be bought from a state fund.
OklahomaOkla. Stat. tit. 85, §§301-413Workers’ Compensation CourtDoes 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.
OregonWorkers’ Compensation Law. Or. Rev. Stat. §656.001Workers’ Compensation DivisionDoesn’t apply to casual employees or inmates.
PennsylvaniaWorker’s Compensation Act of June 24, 1996, P.L. 350, No. 57Bureau of Workers’ CompensationDoesn’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 IslandR.I. Gen. Laws. 27-7.1-1, et. seq.;Department of Labor & TrainingDoesn’t apply to casual employees, farmers or farm laborers, nursery workers, salespersons including real estate brokers and sworn employees of the state.
South CarolinaS.C. Code Ann. §42-1-110 et seq.Workers’ Compensation CommissionDoesn’t apply to casual employees.
South DakotaSDCL Title 62Department of Labor and RegulationDoesn’t apply to domestic servants working less than 20 hours a week, farm workers, independent contractors or volunteers.
TennesseeT.C.A. §50-6-101, et seq.Department of Labor and Workforce DevelopmentDoesn’t apply to some undocumented workers.
TexasTexas Labor Code Annotated § 401.001 et. seqDepartment of InsuranceDoesn’t apply to federal employees or independent contractors.
UtahUtah Code Annotated §34A-2-101, et seq.Labor CommissionDoesn’t apply to real estate brokers.
VermontVermont Statutes Annotated title 21, § 601 et seq.Department of LaborDoesn’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.
VirginiaVirginia Workers’ Compensation Act, Title 65.2 Code of Virginia 1950Workers’ Compensation CommissionDoesn’t apply to anyone whose employment is not within the usual course of the employer’s business.
WashingtonRCW 51.04.010 to 51.98.080Department of Labor and IndustriesExemptions 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 VirginiaW. Va. Code §23-1-1 et seq.Offices of the Insurance CommissionDoesn’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.
WisconsinWis. Stat. §102.01-.89 (2011)Department of Workforce DevelopmentDoesn’t apply to domestic servants or most volunteers.
WyomingWyoming Statutes §27-14-101, et seq.Department of Workforce ServicesDoesn’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.
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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

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.

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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.


Knowing what states require workers compensation insurance is crucial for your business’s compliance. For more valuable insights, visit Aupeo.com today!

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