Requirement Checker
Do I Need Workers' Comp?
Workers' compensation requirements vary by state, employee count, and industry. Check your state's rules in seconds.
Your Business
Include full-time, part-time, and seasonal W-2 employees. Do not count independent contractors (1099).
Select your state and enter your employee count to see your requirements.
Common Questions
About workers' comp requirements
Is workers' compensation insurance required by law?
Workers' compensation insurance is required by law for employers with at least one W-2 employee in almost every U.S. state. Texas is the only state where private workers' comp is optional, though employers who opt out lose standard legal defenses against employee injury lawsuits. Specific thresholds vary: states like New York require coverage for any employee, while Florida and Georgia set the threshold higher for non-construction businesses.
Which states require workers' comp at the first employee?
Most states require workers' comp coverage from the first employee, including Arizona, California, Colorado, Hawaii, Idaho, Illinois, Massachusetts, Nevada, New Hampshire, Oklahoma, Oregon, Pennsylvania, and Utah. New York effectively requires it for any employee. Other states have higher thresholds: Florida at 4, Missouri and Tennessee at 5, Arkansas at 3, New Mexico at 3, and Georgia at 3.
Do construction businesses need workers' comp with only one employee?
Yes, in states where general workers' comp thresholds are higher, construction businesses typically have a stricter 1-employee rule. Florida, Missouri, New Mexico, Tennessee, and Arkansas all require construction businesses to carry coverage at the first employee, even though their general employer thresholds are 3 to 5 employees. California also requires coverage for roofers regardless of employee count.
Can business owners exempt themselves from workers' comp?
In most states, sole proprietors and partners are automatically exempt from their own workers' comp requirements but may elect to include themselves. Corporate officers and LLC members generally start included but may file to exempt themselves, subject to ownership percentage rules (typically 10%+ ownership) and limits on the number of officers who can exempt per entity. Rules vary by state — Hawaii, Massachusetts, and DC include officers by default.
What happens if a business doesn't carry required workers' comp?
Employers without required workers' compensation face significant penalties: fines ranging from hundreds to tens of thousands of dollars per day, stop-work orders that halt operations, personal liability for injured employees' medical costs and lost wages, and in several states criminal charges for willful violations. Injured employees can also sue directly without the usual exclusive-remedy protections that workers' comp provides.
Do I need workers' comp for independent contractors (1099)?
Generally no — true independent contractors who receive 1099s are not covered under an employer's workers' comp policy. However, states aggressively investigate misclassification, and many workers treated as 1099 contractors are legally employees. Construction is a particular focus area: several states require coverage for subcontractors if they lack their own policy, and the contractor may be audited and charged premium on unprotected subcontractor payments.