Generally, businesses with at least one employee are required to carry worker’s compensation insurance to comply with state regulations. This type of insurance provides medical and wage replacement benefits when an employee is injured or ill due to work-related activities.
The requirements change according to conditions such as the number of workers employed and the type of business. However, consulting with a legal professional or the state’s Department of Industrial Relations is recommended. They can provide the most accurate information regarding workers’ compensation requirements for your specific situation and ensure compliance with current workers’ compensation laws and regulations.
Here is a broad overview of specific state’s workers’ compensation requirements:
ALABAMA: Employers who regularly employ 5 or more workers, including part-time, corporate officers and members of an LLC. Exceptions are domestic employees working in private homes, farm workers, casual employees without guaranteed hours, and municipalities with less than 2,000 residents.
ARIZONA: Employers with one or more employees are generally required to have workers’ compensation insurance, whether the employees are full-time or part-time. Note that there are exceptions for independent contractors and casual employees.
CALIFORNIA: By law, employers in the state of California must carry workers’ compensation insurance regardless of how many or how few workers they employ, and regardless of employee status, such as full-time, part-time, temporary, or seasonal. Exceptions are sole proprietors, corporate officers and members of an LLC, independent contractors, and domestic workers who are family members or who receive food and shelter as opposed to pay.
FLORIDA: Employers must have at least 6 regular employees or 12 seasonal employees. Note that seasonal employees must work more than 30 days during any given season, but not to exceed 45 days in a single calendar year.
GEORGIA: Employers with 3 or more regular persons. Officers or members of an LLC are included in this employee count.
MICHIGAN: Workers’ Compensation applies to employers with three or more employees, or with 1 employee who works more than 35 hours per week for a period of 13 weeks or longer. It must be noted that there are exemptions for certain employers, including agricultural employers with less than three employees, and domestic workers.
NEW MEXICO: Employers with 3 or more employees total, whether permanent, temporary, or transitory, must carry workers’ compensation insurance.
NORTH CAROLINA: Most employers with three or more employees (including full-time, part-time, and seasonal workers) are required to have workers’ compensation insurance. There are exceptions for certain agricultural and domestic workers, as well as certain casual employees.
OREGON: Almost all employers in Oregon need coverage. It must be noted that there are nearly 30 exemptions to this law, including people working in a private home performing domestic service, and home health care workers.
SOUTH DAKOTA: There is no law requiring an employer to carry workers’ compensation insurance, although it is recommended.
TEXAS: Workers’ compensation insurance is not required by law.
UTAH: Most employers with one or more full-time, part-time, temporary, or seasonal employees are required to have workers' compensation insurance. The exceptions are sole proprietors with no employee other than the owner, partnerships with no other employees other than the partners, and certain agricultural workers.
It’s important for employers to understand the state’s workers’ compensation laws and regulations. They are intended to maintain the safety of both the employee and the employer. It’s equally important to remember that workers’ compensation requirements and exemptions change occasionally, therefore, our best recommendation is to keep in contact with a legal professional or insurance expert to evaluate your obligations as an employer.
Imagine that you own an auto repair shop and there are certain laws in the state where your repair shop is located. Now, imagine that one of your workers slipped and fell in a small puddle of oil and was injured. Workers’ Compensation insurance would help your employee recover lost wages if time off from work was taken and help pay medical bills.
Some of the questions asked when completing a workers’ compensation application are:
FEIN (Federal Employer Identification Number)
Number of Employees
Breakdown per Employee Classification
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