Workers Compensation Insurance Requirements by State

Perfect compliance with workers’ compensation requirements can seem tricky for even the most experienced human resources professionals. Many laws in the human resources space are federal, meaning they’re mandated and enforced by government agencies nationwide. Workers’ compensation requirements, however, are state-specific. 

Our team of HR and compliance experts is here to help make sense of your state’s requirements. Read on for our state-by-state guide to workers’ compensation insurance rules, and stay tuned for Part 2 if you don’t see your state!

Alabama

• Employers with five or more either full or part-time employees must carry workers’ compensation insurance, and members of an LLC count toward this number.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Alabama, you may be able to self-insure.
• There is no state-controlled workers’ compensation fund in Alabama.
• Check out the Alabama Department of Labor’s page for more information.

Alaska

• Employers with one or more either employees must carry workers’ compensation insurance. Sole proprietors with no employees do not have to carry workers’ compensation insurance.
• Workers hired for transient help, such as harvest help workers, do not “count” as an employee for purposes of workers’ compensation requirements.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Alaska, you may be able to self-insure.
• Check out the Alaska Department of Labor and Workforce Development’s page for more information.

Arizona

• Workers’ compensation insurance is mandatory for all employers, including sole proprietorships, who normally have at least one employee.
• Family members and part-time employees count as employees for purposes of workers’ compensation requirements.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Arizona, you may be able to self-insure.
• Check out the Industrial Commission of Arizona’s page for more information.

Arkansas

• According to the Arkansas Department of Labor, “most” employers with three or more employees are required to have workers’ compensation insurance coverage for their employees.
• There are exceptions, but the Arkansas Department of Labor recommends checking with them before assuming your company falls within an exception.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Arkansas, you may be able to self-insure.
• Check out the Arkansas Department of Labor and Licensing’s page for more information.

California

• According to the California Department of Industrial Relations, all California employers who have one or more employees are required to carry workers’ compensation insurance.
• Corporate officers and directors count as employees for purposes of workers’ compensation requirements. Only sole proprietors with no employees can opt for coverage.
• California workers’ compensation insurance provides basic benefits, including medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits and a return-to-work supplement, and death benefits.
• You can 1) purchase workers’ compensation insurance from a private insurance company, 2) participate in California’s state-administered fund, or 3) if approved by the State of California, you may be able to self-insure.
• Check out the California Department of Industrial Relation’s page for more information.

Colorado

• All employers with at least one employee must carry workers’ compensation insurance.
• Both full and part-time employees count as employees for requirement purposes, as do individuals hired to perform services for the business for money, but there are several exceptions to this rule. Corporate officers and LLC members do not count as employees, but these companies can still choose to carry coverage.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Colorado, you may be able to self-insure.
• Check out the Colorado Department of Labor and Employment’s Employer Guide for more information.

Connecticut

• All employers with at least one employee, whether full-time, part-time, or contract workers, must carry workers’ compensation insurance.
• Corporate officers and LLC members can opt out of being counted as employees for purposes of workers’ compensation requirements. Sole proprietorships, single-member LLCs, and partnerships without employees are not required to carry coverage.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Connecticut, you may be able to self-insure.
• Check out the State of Connecticut Workers’ Compensation Commission’s page for more information.

Delaware

• All employers with at least one employee must carry workers’ compensation insurance.
• Farmworkers are not included as employees for purposes of workers’ compensation insurance, nor are independent contractors.
• Employers may not charge an employee any portion of the premium expense of carrying workers’ compensation insurance.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Delaware, you may be able to self-insure.
• Check out the Delaware Department of Labor’s page for more information.

Washington, D.C.

• All employers with at least one employee must carry workers’ compensation insurance.
• Homeowners who employ domestic workers in their homes who work 240 hours per quarter in any year are required to carry insurance coverage for these employees.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the District of Columbia, you may be able to self-insure.
• Check out the District of Columbia Department of Employment Service’s page for more information.

Florida

• All employers with four or more employees must carry workers’ compensation insurance.
• All agricultural businesses with six or more year-round employees or 12 or more seasonally hired employees (hired for 30 days or longer) must carry workers’ compensation insurance.
• All construction businesses with one or more employees must carry workers’ compensation insurance.
• Out-of-state employers hiring employees working in Florida must carry a Florida workers’ compensation policy or make sure their out-of-state policy applies to their Florida workers.
• You can purchase workers’ compensation insurance from a private insurance company, or, if approved by the State of Florida, you may be able to self-insure.
• Check out the Florida Division of Workers’ Compensation page for more information.

Keep in mind that even if your state doesn’t require you to carry workers’ compensation insurance, you should consider it. Workers’ compensation insurance provides financial and legal protection in the event that one of your employees while at work and while performing a duty within the scope of their employment.

Making sense of when and if you should carry workers’ compensation insurance and what happens if it needs to be used can be an undertaking. Your business doesn’t have to figure it out alone. Benely’s team of HR and compliance experts is here to help. Contact Benely for a free demo today.