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Workers’ Comp Requirements by State: Who Needs It and Who’s Exempt

Whether you need workers’ comp depends on your state, and on more than how many people you employ. States differ on the headcount that triggers it, which owners can leave themselves off the policy, who pays when a subcontractor’s crew isn’t covered, and whether a private insurer can sell you a policy at all. 34 states and D.C. require coverage from the first employee for most businesses. Here’s the rule in all 50 states and D.C., with the agency and the statute for each.

Quick answer

In most states, your first employee triggers it: 34 states and D.C. require workers’ comp from the first hire for most businesses. The rest use a higher headcount (3 to 5 employees, though one employee working 35 or more hours a week for 13 weeks in Michigan, or $500 a quarter in wages in Wisconsin, can trigger it), a payroll test (Kansas) or an industry test (Wyoming), and Texas lets most private employers opt out. Construction often gets a lower bar: Alabama, Arkansas, Florida, Missouri, New Mexico and Tennessee require coverage with fewer employees for some or all construction work. In North Dakota, Ohio and Washington you buy coverage from the state fund, not a private insurer. Wyoming requires state-fund coverage for extra-hazardous industries, which by statute include construction and landscaping services (W.S. 27-14-108). Owners can often leave themselves off the policy, but the rules vary, especially in construction. Find your state below.

34states plus D.C. require it from the first employee

6other states lower the bar for some or all construction work

4state-fund-only states (Wyoming: extra-hazardous work, incl. construction and landscaping)

Texaslets most private employers opt out

What contractors should know

Count the way your state counts. Part-time workers and corporate officers count toward the threshold in states like Alabama and Georgia, and South Carolina and Pennsylvania count family members. Construction often has its own, lower threshold: Florida, Missouri, New Mexico and Tennessee require coverage from the first employee in construction (New Mexico for work that needs a state construction license), Alabama does for building new single-family homes, and Arkansas drops to 2 employees for building work and 1 if you sub out part of a contract or work as a sub.
Owner exemptions get narrower in construction. Florida won’t exempt construction sole proprietors or partners, and Tennessee construction owners must cover themselves unless they’re on the state’s Exemption Registry. Colorado construction sole proprietors must carry coverage or file a rejection, and Montana requires coverage or an Independent Contractor Exemption Certificate for construction work away from your own business location. California requires concrete, HVAC, asbestos, roofing and tree service licensees to carry comp even with no employees, and every licensee starting January 1, 2028.
Collect a certificate from every sub before work starts. In many states a contractor can be liable for an uninsured sub’s workers, and some tie your protection to the paperwork: South Carolina relieves you if you collected proof of the sub’s coverage on the state’s form, while in North Carolina and West Virginia you can be liable for an uninsured sub’s crew if you didn’t get its certificate. Your insurer can also charge premium for work done by uninsured subs; the Arkansas, Connecticut, Georgia, Maine and Michigan entries say so.
Calling someone a sub doesn’t make them one. California presumes anyone doing work that needs a contractor’s license is an employee, and they need a valid license to be treated as independent. Washington uses a 7-part test for construction, Ohio treats a worker under a construction contract as an employee if 10 of 20 listed criteria apply, and Wisconsin treats an injured independent contractor as an employee unless all nine tests are met.
Crossing a state line? Check that state’s rule. Alaska has no reciprocity, so out-of-state employers must insure their Alaska work. Connecticut requires out-of-state employers to cover employees working there, and New Jersey may if the contract is made or the work is done there. In North Dakota, Ohio and Washington, coverage comes from the state fund (or approved self-insurance in Ohio and Washington), not a private insurer, and Wyoming requires state-fund coverage for extra-hazardous work, including construction and landscaping.
The penalties are steep. Depending on the state: stop-work orders (Florida’s halts all business operations in the state), fines by the day or by the employee, penalties pegged to the premium you didn’t pay (twice the premium in Florida and Oregon, three times in Delaware), paying an injured worker’s benefits yourself, and criminal charges. In Pennsylvania, failing to insure is a misdemeanor punishable by up to a $2,500 fine and a year in prison for each day, and a felony (up to $15,000 and seven years per day) if intentional.

Builder’s note: We’re a Pennsylvania contractor. Here the law kicks in at one employee, part-timers and family included, and family members get no exemption. The municipality has to see proof of coverage, or an affidavit that you have no employees, before it issues a building permit. Ask your contractor for the same proof before you sign.

Find your state:Jumps to your state’s full entry, with its sources.

Workers' comp requirements in all 50 states

State	When coverage is required	State fund only?	Owners, subs, penalties
Alabama	5+ (new home building: 1+)	No	Details
Alaska	1+ employees	No	Details
Arizona	1+ employees	No	Details
Arkansas	3+ (construction: 2+; subs/GCs: 1+)	No	Details
California	1+ (all licensees from 2028)	No	Details
Colorado	1+ employees	No	Details
Connecticut	1+ employees	No	Details
Delaware	1+ employees	No	Details
District of Columbia	1+ employees	No	Details
Florida	4+ (construction: 1+)	No	Details
Georgia	3+ employees	No	Details
Hawaii	1+ employees	No	Details
Idaho	1+ employees	No	Details
Illinois	1+ employees	No	Details
Indiana	1+ employees	No	Details
Iowa	1+ employees	No	Details
Kansas	Payroll over $20,000/yr	No	Details
Kentucky	1+ employees	No	Details
Louisiana	1+ employees	No	Details
Maine	1+ employees	No	Details
Maryland	1+ employees	No	Details
Massachusetts	1+ employees	No	Details
Michigan	3+, or 1 full-time 13+ weeks	No	Details
Minnesota	1+ employees	No	Details
Mississippi	5+ employees	No	Details
Missouri	5+ (construction: 1+)	No	Details
Montana	1+ employees	No	Details
Nebraska	1+ employees	No	Details
Nevada	1+ employees	No	Details
New Hampshire	1+ employees	No	Details
New Jersey	1+ employees	No	Details
New Mexico	3+ (construction: 1+)	No	Details
New York	1+ employees	No	Details
North Carolina	3+ employees	No	Details
North Dakota	1+ employees (state fund only)	Yes	Details
Ohio	1+ employees (state fund only)	Yes	Details
Oklahoma	1+ employees	No	Details
Oregon	1+ employees	No	Details
Pennsylvania	1+ employees	No	Details
Rhode Island	1+ employees	No	Details
South Carolina	4+ employees	No	Details
South Dakota	1+ employees	No	Details
Tennessee	5+ (construction: 1+)	No	Details
Texas	Optional (gov't projects: required)	No	Details
Utah	1+ employees	No	Details
Vermont	1+ employees	No	Details
Virginia	3+ (subs' workers can count)	No	Details
Washington	1+ employees (state fund only)	Yes	Details
West Virginia	1+ employees	No	Details
Wisconsin	3+, or $500 wages in a quarter	No	Details
Wyoming	Extra-hazardous jobs (state fund)	Yes, for extra-hazardous industries, incl. construction and landscaping	Details

The general rule for private employers. Owner exemptions, subcontractor and homeowner rules, penalties, the agency and the statute for each state are in the entries below.

State-by-state details

AlabamaSecondary source

Who must carry it: Employers who regularly employ 5 or more employees, full- or part-time, must carry coverage; corporate officers and LLC members count toward the 5 (Alabama Dept. of Workforce; Workforce Alabama FAQ). The under-5 exemption does not apply to businesses in construction of new single-family detached homes, so those employers need coverage from the first employee (Alabama Dept. of Workforce).
Owners and officers: Corporate officers and LLC members count as employees toward the 5-employee threshold (Workforce Alabama FAQ). How owners themselves are covered or can opt out was not confirmed in an official source; ask your insurer.
Subcontractors: Alabama has no statutory-employer provision; the employer is the party that hires and pays wages directly (Ala. Code § 25-5-1(4)), though joint employers can be held jointly liable (per ALFA International compendium, 2025).
Homeowners: Domestic employees are exempt from mandatory coverage (Ala. Code § 25-5-50). With no statutory-employer rule, a homeowner hiring a contractor is not made the employer of the contractor's crew under the comp law.
Penalties: No penalty amount published on an official source we could find. Ask the state agency.
The law: Ala. Code Title 25, Ch. 5 (Workers' Compensation); § 25-5-50 (exemptions incl. under-5 rule)
State agency: Alabama Department of Workforce, Workers' Compensation Division
Good to know: Alabama requires coverage once you regularly have 5 or more employees, counting part-timers, corporate officers and LLC members. If you build new single-family homes, you need coverage with even one employee.

Sources: adol.alabama.gov · workforce.alabama.gov · adol.alabama.gov · alfainternational.com

AlaskaSecondary source

Who must carry it: Every employer with 1 or more employees in Alaska must carry coverage or be approved to self-insure (Alaska Workers' Compensation Act, AS 23.30; Alaska DOLWD employer page). Alaska has no reciprocity, so out-of-state employers must cover their Alaska work. No separate construction rule.
Owners and officers: Not required to cover themselves (effective Aug 1, 2019): sole proprietors, partners, LLC members with at least 10% ownership, and for-profit corporate officers with at least 10% ownership. Officers of nonprofit or municipal corporations are not employees unless the corporation elects to cover them. These businesses must still cover employees, including family members and friends (Alaska DOLWD employer page).
Subcontractors: If a subcontractor fails to secure coverage, the contractor is liable for and must secure compensation for the subcontractor's employees (AS 23.30.045(a)).
Penalties: Penalties of up to $1,000 per employee for each day an employer is uninsured, and a mandatory $1,000 per day for violating a stop-work order (Alaska DOLWD Division of Workers' Compensation).
The law: AS 23.30 (Alaska Workers' Compensation Act); AS 23.30.045 (contractor liability)
State agency: Alaska Department of Labor and Workforce Development, Division of Workers' Compensation
Good to know: Alaska requires coverage with even one employee, and out-of-state contractors must insure their Alaska work. A general contractor is on the hook for an uninsured sub's workers.

Sources: labor.alaska.gov · labor.alaska.gov · labor.alaska.gov

ArizonaOfficial source

Who must carry it: Any employer who regularly employs workers in its business, full- or part-time, regardless of number (A.R.S. § 23-902(A); ICA Employers' FAQ). Domestic servants and casual workers outside the usual business are excepted. No separate construction rule.
Owners and officers: A sole proprietor with no employees need not insure himself or herself but may elect coverage (ICA Employers' FAQ) and may waive coverage (A.R.S. § 23-961(N), referenced in § 23-902(E)); a business using a sole proprietor who has waived is not liable for that person (§ 23-902(E)). A corporation's or LLC's employees may include its officers, directors, shareholders, members and managing members (ICA FAQ).
Subcontractors: A business that hires a contractor it supervises or controls, for work that is part of its regular trade or business, is the statutory employer of the contractor's and subcontractors' employees (A.R.S. § 23-902(B)).
Homeowners: Domestic servants are excepted (A.R.S. § 23-902(A)). The statutory-employer rule only reaches work that is part of the hiring party's own trade or business, so it generally does not make a homeowner the employer of a contractor's crew.
Penalties: If the Commission finds an employer uninsured it can impose a civil penalty of up to $1,000, up to $5,000 for a second failure and up to $10,000 for a third within five years; if the Special Fund pays a claim, the employer owes it back plus a penalty of 10% or $1,000, whichever is greater; the Commission can seek an injunction stopping the business until it complies (A.R.S. § 23-907). The ICA FAQ (rev. 11/2015) also says an uninsured employer is guilty of a class 6 felony (A.R.S. § 23-932).
The law: A.R.S. Title 23, Ch. 6; §§ 23-902 (employers subject; statutory employer), 23-907 (uninsured employers), 23-932
State agency: Industrial Commission of Arizona (ICA)
Good to know: Arizona requires coverage for any regular employee, even part-time. If you hire a sub to do part of your own trade's work and control the job, you can be treated as that sub's employer for comp purposes.

Sources: azica.gov · azleg.gov · azleg.gov · azleg.gov

ArkansasSecondary source

Who must carry it: 3 or more regular employees in most businesses; 2 or more for anyone engaged in building or building repair work; 1 or more for a contractor who subcontracts any part of a contract; 1 or more for any subcontractor (Ark. Code § 11-9-102(11)(A)-(D)).
Owners and officers: Sole proprietors, partners and LLC members can apply to the Commission for a Certificate of Non-Coverage, which exempts only the named owner, never its employees, and is not a waiver of workers' comp liability (AWCC Advisory 2001-1; joint AWCC/Insurance Dept./Contractors Licensing Board bulletin, Aug 2007). Corporate officer rules not confirmed in a current official source.
Subcontractors: When a subcontractor fails to secure coverage, the prime contractor is liable for compensation to the sub's employees and can recover from the sub (Ark. Code § 11-9-402, per ALFA International compendium, secondary). The 2007 joint bulletin warns that insurers audit and charge premium for uninsured subs' workers and that a contractor would probably be liable if an uninsured sub's worker is hurt.
Homeowners: A person employed by a homeowner as a domestic servant, or to do gardening, maintenance, repair, remodeling or similar work at the employer's own private home, is excluded from covered employment (Ark. Code § 11-9-102(11)(A)(i)-(ii)).
Penalties: No penalty amount published on an official source we could find. Ask the state agency.
The law: Ark. Code Title 11, Ch. 9; § 11-9-102(11) (employment), § 11-9-402 (prime contractor liability)
State agency: Arkansas Workers' Compensation Commission (Arkansas Department of Labor and Licensing)
Good to know: Arkansas sets lower thresholds for construction: 2 employees in building or repair work, and just 1 if you subcontract work or work as a sub. An owner's Certificate of Non-Coverage exempts only that owner, not anyone working for them.

Sources: labor.arkansas.gov · law.justia.com · labor.arkansas.gov · labor.arkansas.gov · alfainternational.com

CaliforniaSecondary source

Who must carry it: Every employer with 1 or more employees must carry coverage (California DIR). For CSLB-licensed contractors: a licensee with no employees may file an exemption, except C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing and C-61/D-49 Tree Service, which must carry comp whether or not they have employees (CSLB). Under SB 1455 (2024), all licensees must carry comp regardless of employees starting January 1, 2028 (CSLB industry bulletin).
Owners and officers: A licensed contractor with no employees can file an exemption with CSLB, but not if it holds one of the five mandatory classifications or its license is qualified by a Responsible Managing Employee; if an exempt contractor hires someone, proof of coverage must reach CSLB within 90 days (CSLB). An officer or director who is the sole shareholder of a private corporation is excluded; officers or directors owning at least 10% of the stock, general partners and LLC managing members can waive coverage in writing to their insurer (Lab. Code § 3352(a)(16)-(17)).
Subcontractors: Anyone doing work that requires a contractor's license, or working for someone required to hold one, is presumed to be an employee rather than an independent contractor, and must hold a valid license to be treated as independent (Lab. Code § 2750.5). Hiring an unlicensed 'sub' can therefore leave you responsible for that sub and its crew.
Homeowners: CSLB warns that a homeowner may be liable for medical bills if an uninsured worker is hurt on the property, and that a homeowner's insurance policy might not apply if the worker wasn't licensed (CSLB). Hire licensed, insured contractors.
Penalties: CSLB suspends a contractor's license if required comp coverage lapses, and work done while suspended counts as unlicensed (CSLB). The Labor Commissioner can cite an uninsured employer $1,500 per uncovered employee and issue a stop order halting work until coverage is obtained; violating a stop order can bring penalties up to $10,000 and misdemeanor charges (DIR Labor Commissioner).
The law: Cal. Lab. Code § 3700 et seq.; §§ 2750.5, 3352; Bus. & Prof. Code § 7125
State agency: California Department of Industrial Relations (DIR), Division of Workers' Compensation; Contractors State License Board (CSLB)
Good to know: California requires coverage with even one employee. Concrete, HVAC, asbestos, roofing and tree service licensees must carry it even with no employees, and every licensed contractor must carry it starting January 1, 2028.

Sources: dir.ca.gov · cslb.ca.gov · cslb.ca.gov · cslb.ca.gov · dir.ca.gov · cslb.ca.gov

ColoradoSecondary source

Who must carry it: All businesses with employees operating in Colorado must carry coverage, regardless of the number of employees and even if they work part-time or are family members (Colorado Division of Workers' Compensation). Construction businesses must carry coverage or file a rejection even if the business is a sole proprietorship or partnership with no employees (CDLE).
Owners and officers: Corporate officers and LLC members are employees, but those who own at least 10% of the company and hold a specified officer role (or are LLC members taking part in daily operations or management) may reject coverage by filing a rejection (CDLE; C.R.S. § 8-41-202). Sole proprietors and partners in construction must carry coverage or file a rejection (CDLE).
Subcontractors: A business that contracts out work is the statutory employer of the contractor's and subcontractors' workers and must insure them, recovering the cost from the contractor; if the contractor is itself insured, the contractor's workers cannot sue the hiring business (C.R.S. § 8-41-401(1)-(2)).
Homeowners: The comp law does not apply to the owner or occupant of a 'qualified residence' (IRC § 163(h)(4)(A)) who contracts out work on the property, unless the worker is otherwise that owner's employee (C.R.S. § 8-41-402(1)).
Penalties: Uninsured employers can be fined up to $500 for every day they are uninsured (the statute sets up to $250 a day for a first violation and $250 to $500 a day for later ones), and their business may be shut down; if a worker is hurt, the employer pays the claim itself plus a penalty of 25% of the worker's benefits (CDLE insurance requirements page; C.R.S. §§ 8-43-408, 8-43-409(1)(b)).
The law: C.R.S. Title 8, Arts. 40-47; §§ 8-41-202, 8-41-401, 8-41-402, 8-43-409
State agency: Colorado Department of Labor and Employment, Division of Workers' Compensation
Good to know: Colorado requires coverage with one employee, and construction sole proprietors must carry it or file a rejection. A homeowner who hires a contractor to work on their own home is not treated as the contractor's employer under the comp law.

Sources: cdle.colorado.gov · cdle.colorado.gov · cdle.colorado.gov · wc1.cdle.state.co.us · colorado.public.law · colorado.public.law

ConnecticutSecondary source

Who must carry it: All employers with employees in Connecticut must carry coverage (C.G.S. § 31-275(9)-(10); CT WCC). No separate construction threshold; out-of-state employers must cover employees working in Connecticut.
Owners and officers: Sole proprietors are covered only if they accept the Act. Corporate officers, LLC members and partners may elect to be excluded by written notice (C.G.S. § 31-275(9)(B); WCC forms 6B, 6B-1, 75).
Subcontractors: Insurers may charge premium for work done by an uninsured contractor (C.G.S. § 31-291; CT WCC). Collect a certificate of insurance from every contractor and sub before work starts.
Homeowners: A person working in or about a private home is excluded unless regularly employed by the owner or occupier more than 26 hours a week (C.G.S. § 31-275(9)(B)).
Penalties: The Labor Commissioner can issue a stop-work order, within 72 hours of finding a violation, halting operations at the work site until the employer gets coverage, with a $1,000-per-day civil penalty for violating the order; knowingly and willfully failing to insure is a class D felony for owners, partners, LLC principals and corporate officers (OLR summary of Public Act 07-89, 2007; C.G.S. § 31-288).
The law: C.G.S. Ch. 568 (Workers' Compensation Act); §§ 31-275, 31-288, 31-291
State agency: Connecticut Workers' Compensation Commission
Good to know: Connecticut requires coverage for any employee. Corporate officers, LLC members and partners can file to exclude themselves, but anyone they hire must be covered, and an uninsured employer can be shut down with a stop-work order.

Sources: portal.ct.gov · cga.ct.gov · prdext3.cga.ct.gov

DelawareOfficial source

Who must carry it: Almost every employer with 1 or more employees in Delaware, including full-time, part-time, seasonal and temporary workers, must carry coverage, generally in place before they start work, with only limited exceptions (Delaware Division of Industrial Affairs; 19 Del. C. §§ 2306(a), 2372). No separate construction threshold.
Owners and officers: Sole proprietors and partners are not covered but may elect coverage; their immediate family members are covered unless exempted by written agreement. Corporate officers are covered by default, but up to 8 stockholder-officers, and up to 8 LLC members, can be exempted by written agreement (19 Del. C. § 2308); for contractors the limit is 4 (§ 2311(a)(4)). An exclusion must be filed and approved; employers can't assume officers or family are exempt (Division of Industrial Affairs).
Subcontractors: Each contractor and subcontractor is the employer of its own workers (19 Del. C. § 2311(a)(1)). A business that hires a sub or independent contractor without collecting the required certificate of insurance or exemption notice is deemed to insure workers' comp claims from that work, and must keep those records for 3 years (§ 2311(a)(5)). Construction businesses hiring out-of-state contractors must verify their Delaware coverage (§ 2371(f)).
Homeowners: Household workers in a private home who earn less than $750 in cash in any 3-month period from that household are excluded (19 Del. C. § 2307(a)).
Penalties: Civil penalty of 3 times the premium not purchased (or 3 times the most expensive premium for a year if never insured); after notice, $10 per employee per day with a $250 per day minimum; the Court of Chancery can bar the business from operating after a 30-day default; the employer stays liable to injured workers (19 Del. C. § 2374). The Division also cites stop-work orders.
The law: 19 Del. C. Ch. 23; §§ 2306, 2311, 2372
State agency: Delaware Department of Labor, Division of Industrial Affairs, Office of Workers' Compensation
Good to know: Delaware requires coverage with one employee. If you hire a sub without collecting its certificate of insurance or exemption, you're on the hook for claims from its work.

Sources: industrialaffairs.delaware.gov · industrialaffairs.delaware.gov · industrialaffairs.delaware.gov · delcode.delaware.gov · delcode.delaware.gov

District of ColumbiaOfficial source

Who must carry it: Employers with 1 or more employees in the District must cover them (D.C. Workers' Compensation Act of 1979, D.C. Code § 32-1501 et seq.; DOES Office of Workers' Compensation).
Owners and officers: Sole proprietors, casual workers and unpaid volunteers are not covered. An employer and/or the president, secretary and treasurer of a corporation are severally and personally liable for fines and for benefits owed for injuries while uninsured (DOES employer brochure). Partner and LLC member rules not confirmed.
Subcontractors: A contractor is liable for and must secure compensation for a subcontractor's employees unless the subcontractor has secured it (D.C. Code § 32-1503(c)).
Homeowners: An employer of domestic workers who together work 240 hours or more in a calendar quarter must carry coverage (DOES employer brochure).
Penalties: Fines of up to $10,000 for failing to obtain coverage; corporate officers can be personally liable (DOES employer brochure).
The law: D.C. Code § 32-1501 et seq. (Workers' Compensation Act of 1979)
State agency: D.C. Department of Employment Services (DOES), Office of Workers' Compensation
Good to know: D.C. requires coverage with one employee, and households with domestic workers who work 240+ hours a quarter must carry it. Fines run up to $10,000.

Sources: does.dc.gov · code.dccouncil.gov

FloridaOfficial source

Who must carry it: Construction: 1 or more employees, including the business owner. Non-construction: 4 or more employees, including owners who are corporate officers or LLC members. Agriculture: 6 regular or 12 seasonal workers (Fla. Stat. Ch. 440; Florida DFS Division of Workers' Compensation). Construction trades are defined in Fla. Admin. Code 69L-6.021.
Owners and officers: In construction, up to 3 corporate officers or LLC members per company (or affiliated group), each owning at least 10% of a Florida-registered corporation or LLC, may obtain exemptions; sole proprietors and partners in construction are treated as employees and cannot get an exemption. Outside construction, sole proprietors and partners are not employees unless they elect coverage (form DWC-251) (Florida DFS).
Subcontractors: When a contractor sublets part of its work, all employees on the job are treated as employed in one business, and the contractor must secure coverage for them unless the sub has already done so; a contractor must require subs to provide evidence of workers' comp insurance (Fla. Stat. § 440.10(1)(b)-(c); Fla. Admin. Code 69L-6.032). Keep copies of subs' policies or exemption certificates.
Penalties: Stop-work order within 72 hours that halts all business operations in the state; penalty of 2 times the premium the employer would have paid over the preceding 12 months, or $1,000, whichever is greater (look-back extends to 24 months in some cases) (Fla. Stat. § 440.107(7)(a), (7)(d), 2026).
The law: Fla. Stat. Ch. 440; §§ 440.02, 440.10, 440.107
State agency: Florida Department of Financial Services, Division of Workers' Compensation
Good to know: Florida construction businesses need coverage with even one employee, counting the owner. Only corporate officers or LLC members with at least 10% ownership can be exempt, up to three per company; construction sole proprietors can't be exempt.

Sources: myfloridacfo.com · Myfloridacfo.Com · leg.state.fl.us · leg.state.fl.us

GeorgiaOfficial source

Who must carry it: Employers who regularly employ 3 or more people in Georgia, full- or part-time, must carry coverage; corporate officers and LLC members count toward the 3 (Georgia SBWC). No separate construction threshold.
Owners and officers: Corporate officers and LLC members are employees, but up to five may waive coverage on themselves by filing Form WC-10 with the insurer; a waiver does not reduce the employee count. Sole proprietors and partners are employers, not employees, but may elect coverage in writing to their insurer (Georgia SBWC FAQ).
Subcontractors: A contractor who sublets work may be liable for coverage of an uninsured subcontractor's employees, and its insurer can charge premium for payments to uninsured subs (Georgia SBWC employer pamphlet).
Penalties: Civil penalty of $500 to $5,000 per occurrence; a 10% increase in compensation if the employer willfully fails to insure; willful failure is a misdemeanor with a fine of $1,000 to $10,000, up to 12 months in jail, or both (Georgia SBWC employer pamphlet, rev. 7/23).
The law: O.C.G.A. Title 34, Ch. 9 (Workers' Compensation)
State agency: Georgia State Board of Workers' Compensation
Good to know: Georgia requires coverage once you regularly have 3 or more workers, counting part-timers and corporate officers. A general contractor can be liable for an uninsured sub's workers.

Sources: sbwc.georgia.gov · sbwc.georgia.gov · sbwc.georgia.gov

HawaiiSecondary source

Who must carry it: Any employer, other than those excluded in HRS § 386-1, with 1 or more employees, full- or part-time, permanent or temporary, must provide coverage (Hawaii DLIR Disability Compensation Division). No separate construction threshold.
Owners and officers: Excluded from 'employment': sole proprietors; individual partners (and LLP partners with at least a 50% interest); LLC members with at least a 50% distributional interest; a person owning at least 50% of a corporation; and an unpaid officer owning at least 25% of a corporation with no employees (HRS § 386-1).
Subcontractors: An independent contractor is deemed the employer of everyone working under its contract, including its subcontractors' employees; the direct employer is primarily liable and the contractors above it are secondarily liable (HRS § 386-1, definition of 'employee').
Homeowners: Domestic work for personal, family or household purposes is excluded if cash pay is under $225 in the current and preceding calendar quarters (HRS § 386-1).
Penalties: No penalty amount published on an official source we could find. Ask the state agency.
The law: HRS Ch. 386 (Workers' Compensation Law); § 386-1 (definitions and exclusions)
State agency: Hawaii Department of Labor and Industrial Relations, Disability Compensation Division
Good to know: Hawaii requires coverage with even one part-time or temporary employee. A general contractor stands behind its subcontractors' workers if the sub's coverage fails.

Sources: labor.hawaii.gov · labor.hawaii.gov · law.justia.com

IdahoOfficial source

Who must carry it: Most employers with any employees must carry coverage; exemptions are listed in Idaho Code § 72-212 (e.g., household domestic service, casual employment) (Idaho Industrial Commission). No separate construction threshold.
Owners and officers: Exempt unless they elect coverage: the owner of a sole proprietorship; working members of a partnership or LLC; and corporate officers owning at least 10% of voting stock (who must also be directors if the corporation has directors). Family members living in the household of a sole proprietor or single-member LLC owner are exempt; non-resident family members can file form IC53 to be exempt (Idaho Code § 72-212(4)-(6); Idaho IIC).
Subcontractors: An employer is liable for compensation to the employees of a contractor or subcontractor under it who has not secured coverage, and can seek reimbursement from that contractor (Idaho Code § 72-216).
Homeowners: Household domestic service is exempt unless coverage is elected (Idaho Code § 72-212(1)). Section 72-216 contains no express homeowner exception.
Penalties: Failure to insure is a misdemeanor, and responsible officers or LLC managers can be personally liable for benefits; civil penalty of the greater of $2 per employee per day or $25 per day (up to 3 years), plus $500 for a second and $1,000 for a third failure within 3 years; a court can bar the business from operating while uninsured (Idaho Code § 72-319).
The law: Idaho Code Title 72, Ch. 2-3; §§ 72-212, 72-216, 72-301, 72-319
State agency: Idaho Industrial Commission, Employer Compliance
Good to know: Idaho has no minimum employee count: if you have employees, you need coverage. Owners, partners, LLC members and 10%+ officers are exempt unless they choose to be covered.

Sources: iic.idaho.gov · iic.idaho.gov · legislature.idaho.gov · legislature.idaho.gov · legislature.idaho.gov

IllinoisOfficial source

Who must carry it: Any employer with 1 or more employees, even part-time, must carry coverage, with rare exceptions; extra-hazardous work under Section 3, which includes construction, must be covered, and the Employee Classification Act (820 ILCS 185) requires construction businesses to insure in almost all cases (820 ILCS 305/3, 305/4; IWCC).
Owners and officers: Sole proprietors, partners, corporate officers and LLC members are generally not required to cover themselves; to come under the Act they buy insurance for themselves, and to opt out of a policy that covers other employees they notify their insurer in writing. The IWCC has no opt-out form (IWCC).
Subcontractors: A business doing Section 3 work (which includes construction) that contracts any of it out is liable for compensation to the employees of a contractor or sub that hasn't insured, and can recover what it pays from that contractor; this applies only to injuries on or about the premises where the principal contracted for the work to be done (820 ILCS 305/1(a)(3)).
Penalties: Knowing and willful failure to insure: fines up to $500 per day with a $10,000 minimum, and a stop-work order halting all business operations until proof of insurance; negligent failure is a Class A misdemeanor and knowing failure a Class 4 felony; officers can be personally liable; injured workers can sue an uninsured employer in civil court (820 ILCS 305/4(d); IWCC).
The law: 820 ILCS 305 (Workers' Compensation Act); §§ 1(a)(3), 3, 4(d)
State agency: Illinois Workers' Compensation Commission
Good to know: Illinois requires coverage with even one part-time employee, and construction work is always covered. Willfully going without coverage can mean a stop-work order and fines of at least $10,000.

Sources: iwcc.illinois.gov · ilga.gov

IndianaSecondary source

Who must carry it: Every employer covered by the Act must insure its employees or prove to the Board it can pay directly, except those exempted by Ind. Code § 22-3-2-5 (mainly government employers); there is no minimum number of employees (Ind. Code § 22-3-5-1; Indiana WCB). No separate construction threshold.
Owners and officers: Executive officers are employees but may elect not to be by written notice to the insurer and the Board. Sole proprietors, partners, and LLC members or managers are not employees unless they elect coverage by notice to the insurer and the Board (Ind. Code § 22-3-6-1(b), 2025 text via Justia).
Subcontractors: A person who contracts for work over $1,000 without getting a certificate of coverage from the contractor, or a contractor who sublets work without one, is liable to the same extent as the contractor for the contractor's or sub's employees (Ind. Code § 22-3-2-14(b)-(c)). An independent contractor who opts out files for a certificate of exemption (Dept. of Revenue clearance, filed with the WCB); a hiring party holding a copy of the stamped certificate is protected from claims (Ind. Code § 22-3-2-14.5).
Homeowners: The contractor-liability rule does not apply to an owner who contracts for work on the owner's own owner-occupied residential property (Ind. Code § 22-3-2-14(a)(1)).
Penalties: The Board may assess a civil penalty of $100 per day if an employer doesn't provide proof of coverage by the 10th day after the Board's request (waived if proof is provided by day 20) (Ind. Code § 22-3-5-2.5; Indiana WCB).
The law: Ind. Code Title 22, Art. 3; §§ 22-3-2-5, 22-3-2-14, 22-3-6-1
State agency: Indiana Worker's Compensation Board
Good to know: Indiana has no minimum employee count. Homeowners hiring work on their own home aren't liable for an uninsured contractor's crew, but contractors who don't collect a sub's certificate of insurance can be.

Sources: in.gov · in.gov · law.justia.com · law.justia.com

IowaOfficial source

Who must carry it: Most employers must carry insurance or be approved to self-insure; there is no minimum number of employees (Iowa Code § 87.1; Iowa Division of Workers' Compensation). Exempt: household and casual workers who earn less than $1,500 from the employer in the prior 12 months, and agricultural employers with under $2,500 cash payroll in the prior year (Iowa Code § 85.1).
Owners and officers: Proprietors, partners, LLC and LLP members are not covered unless the business buys a policy that specifically includes them (Iowa Code § 85.1A) and may file a nonelection; up to four officers (president, VP, secretary, treasurer) of a non-family-farm corporation may reject coverage in writing (Iowa Code §§ 85.1(5), 87.22).
Subcontractors: No general statutory-employer provision was found in Iowa Code chs. 85 and 87. Confirm a contractor's coverage with your insurer before work starts.
Homeowners: A worker in a private home is covered only if they earn $1,500 or more from that employer in the 12 months before the injury and are not a household member (Iowa Code § 85.1(1)).
Penalties: Willfully and knowingly failing to insure is a class D felony (Iowa Code § 87.14A). An injured worker can sue an uninsured employer for damages, with negligence presumed and common-law defenses barred (Iowa Code § 87.21).
The law: Iowa Code Chs. 85 and 87; §§ 85.1, 85.1A, 87.1, 87.14A, 87.21, 87.22
State agency: Iowa Department of Inspections, Appeals, and Licensing, Division of Workers' Compensation
Good to know: Iowa has no minimum employee count. Owners, partners and LLC members aren't covered unless the policy names them, and willfully going uninsured is a felony.

Sources: dial.iowa.gov · legis.iowa.gov · legis.iowa.gov

KansasOfficial source

Who must carry it: Required unless the employer's total gross annual payroll for the prior calendar year was $20,000 or less and is expected to stay at or under $20,000 this year; wages paid to family members don't count, and owners' wages are excluded for sole proprietors and partnerships (K.S.A. 44-505(a)(2); KDOL). Agriculture is exempt. No separate construction rule.
Owners and officers: Sole proprietors, partners and LLC members are the employer and not covered, but may elect coverage; corporate officers owning 10% or more of the stock may elect in or out (KDOL employer guide K-WC 25).
Subcontractors: A principal who contracts out work that is part of its trade or business is liable for compensation to the contractor's workers, with a right of indemnity against whoever would otherwise be liable; this doesn't apply to accidents away from premises under the principal's control, and the principal is not liable if the contractor has secured coverage for its workers (K.S.A. 44-503(a), (b), (d), (g)).
Penalties: Intentional failure to secure coverage is a class A misdemeanor plus a civil penalty of twice the annual premium or $25,000, whichever is greater; failure to secure coverage can also result in closure of the business (KDOL employer guide K-WC 25, rev. 04-25).
The law: K.S.A. Chapter 44, Article 5; K.S.A. 44-503, 44-505
State agency: Kansas Department of Labor, Division of Workers Compensation
Good to know: Kansas uses payroll, not headcount: you need coverage once your annual payroll (not counting family members) tops $20,000. Willfully going uninsured can cost twice the premium or $25,000, whichever is more.

Sources: dol.ks.gov · kslegislature.gov · kslegislature.gov

KentuckyOfficial source

Who must carry it: Employers with 1 or more employees, including family, temporary and part-time workers, must carry coverage (KRS 342.630; Kentucky Department of Workers' Claims). No separate construction threshold.
Owners and officers: Business owners, and 'qualified' partners and LLC members who share in profits, losses and decisions, are not employees unless they elect coverage by an endorsement on a comp policy; the business must still cover nonqualified partners or members it pays regularly for their work (KRS 342.012).
Subcontractors: A contractor who subcontracts work is liable for compensation to the sub's employees unless the sub has secured coverage. A 'contractor' includes anyone who has soil, rock or mineral excavation or drilling, or timber cutting or removal, done, or work that is a regular or recurrent part of its own trade or business (KRS 342.610(2)). Builders must show proof of comp coverage, or certify an exemption on the state form, before a local building official issues a building permit (KRS 342.610(6)).
Homeowners: For most work, the up-the-ladder rule reaches only work that is a regular or recurrent part of the hiring party's own trade or business. But the statute separately treats anyone who has soil excavation or drilling, or timber cutting or removal, done as a 'contractor,' with no trade-or-business limit (land principally used for agriculture is excepted) (KRS 342.610(2)).
Penalties: Civil fines of $100 to $1,000 per offense, with each employee and each day without coverage a separate offense (KRS 342.990(7)(c)); the employer must repay the Uninsured Employers' Fund for benefits it pays and loses exclusive-remedy protection, so injured workers can sue (Kentucky Department of Workers' Claims employer FAQ).
The law: KRS Chapter 342; KRS 342.012, 342.610, 342.630, 342.990
State agency: Kentucky Labor Cabinet, Department of Workers' Claims
Good to know: Kentucky requires coverage with one employee, and family and part-time workers count. Builders must show proof of comp, or certify an exemption, to get a building permit.

Sources: elc.ky.gov · apps.legislature.ky.gov · apps.legislature.ky.gov · apps.legislature.ky.gov

LouisianaOfficial source

Who must carry it: Every employer must secure compensation for its employees through an authorized insurer, a group self-insurance fund, an interlocal risk management agency, or approved self-insurance; there is no minimum number of employees (La. R.S. 23:1168). No separate construction threshold.
Owners and officers: A corporate president, vice president, secretary or treasurer owning at least 10% of the stock, an LLC member owning at least a 10% membership interest, a partner, or a sole proprietor may opt out by written agreement with the insurer or group self-insurance fund (La. R.S. 23:1035(A)).
Subcontractors: A principal is the statutory employer of a contractor's employees when the contracted work is part of its trade or business (integral or essential to its ability to generate its goods, products or services) and, automatically, when the work is included in a contract between the principal and someone else (the two-contract situation). Otherwise, status exists only if a written contract recognizes the principal as statutory employer. The statutory employer owes comp but is immune from the workers' tort suits (La. R.S. 23:1061).
Homeowners: Employees of a private residential householder are excluded if their annual net earnings are $1,000 or less and their work is not part of a trade or business; a business that furnishes labor or services to private homes stays liable for its own workers (La. R.S. 23:1035(B)).
Penalties: Civil penalty assessed by a workers' compensation judge of up to $250 per employee for a first offense (capped at $10,000 for a related series of violations) and up to $500 per employee for later offenses (La. R.S. 23:1170). Willful failure to secure coverage is a crime: fine of up to $250 per day uninsured, up to 1 year in prison, or both (La. R.S. 23:1172).
The law: La. R.S. 23:1021 et seq.; 23:1035, 23:1061, 23:1168, 23:1170, 23:1172
State agency: Louisiana Workforce Commission, Office of Workers' Compensation Administration
Good to know: Louisiana requires coverage with one employee. Officers owning at least 10%, LLC members with at least 10%, partners and sole proprietors can opt out in writing with the insurer.

Sources: laworks.net · legis.la.gov · legis.la.gov · legis.la.gov · legis.la.gov · legis.la.gov

MaineOfficial source

Who must carry it: Almost all public and private employers with employees must carry coverage; employers of domestic servants in a private home are exempt, and farm/aquaculture employers have conditional exemptions (39-A M.R.S.; Maine Bureau of Insurance employer guide). No separate construction threshold.
Owners and officers: Sole proprietors need not cover themselves; LLC owners are not required to be covered and need no waiver; a bona fide owner of at least 20% of a corporation's voting stock may waive coverage in writing; a parent, spouse or child of a sole proprietor, partner or 20% owner may waive in writing (Maine Bureau of Insurance employer guide).
Subcontractors: Maine has no general rule making a hiring business liable for an uninsured contractor's crew; the statute's express rule covers landowners contracting for wood harvesting, who are liable unless they get a predetermination, certificate of independent status or certificate of insurance (39-A M.R.S. § 401(4)). If you don't get a contractor's certificate of coverage or a WCB-266 predetermination of independent-contractor status, your insurer might count the contractor's employees as yours and include their payroll in your premium (Maine Bureau of Insurance employer guide).
Homeowners: Employers of domestic servants in a private home are exempt from the coverage requirement (Maine Bureau of Insurance employer guide).
Penalties: Uninsured employers can be sued by injured workers, are guilty of a Class D crime for a knowing violation, face a civil penalty of up to $10,000 or 108% of the premium that should have been paid, whichever is larger, and in some cases can have a professional license suspended or revoked or the company administratively dissolved (39-A M.R.S. § 324(3); Maine Bureau of Insurance employer guide).
The law: 39-A M.R.S. (Maine Workers' Compensation Act of 1992); § 401 (coverage requirement), § 324 (penalties)
State agency: Maine Workers' Compensation Board; Maine Bureau of Insurance
Good to know: Maine requires coverage for nearly every employer with employees. Ask subcontractors for a certificate of coverage, or your insurer may bill you for their workers.

Sources: maine.gov · legislature.maine.gov · legislature.maine.gov

MarylandOfficial source

Who must carry it: Every employer with 1 or more employees in Maryland must provide coverage, with few exceptions (Md. Code, Lab. & Empl. Title 9; Maryland WCC). No separate construction threshold.
Owners and officers: Corporate officers and LLC members paid for services are covered employees but may elect exemption by written notice to the Commission and insurer: officers of close corporations; up to five officers of other corporations; 20%+ owners of farm or professional corporations; LLC members owning at least 20% (Lab. & Empl. § 9-206). Sole proprietors are not covered unless they elect coverage (§ 9-227); partners are covered only if the partnership elects (§ 9-219).
Subcontractors: A principal contractor that subcontracts part of work in its own business is considered the employer of the sub's covered employees and liable for compensation, with indemnity rights against the sub; it is not liable for exempt officers/members, non-electing partners, or sole proprietors who haven't elected coverage (Lab. & Empl. § 9-508).
Homeowners: The principal-contractor rule applies only to a contractor doing work that is part of its own business, so a homeowner hiring a contractor isn't made the employer of the contractor's crew by § 9-508.
Penalties: Fine of up to $10,000 for failing to secure coverage; corporate officers with general management responsibility in Maryland are personally liable for the fine (Maryland WCC employer FAQ, Form C-98).
The law: Md. Code, Lab. & Empl. Title 9; §§ 9-206, 9-219, 9-227, 9-508
State agency: Maryland Workers' Compensation Commission
Good to know: Maryland requires coverage with one employee. A general contractor is treated as the employer of a sub's workers, so collect proof of coverage from every sub.

Sources: wcc.state.md.us · mgaleg.maryland.gov · mgaleg.maryland.gov

MassachusettsOfficial source

Who must carry it: All employers operating in Massachusetts must carry coverage for their employees, with no minimum headcount or hours; the only listed exception is domestic workers, who are covered at 16 or more hours a week (M.G.L. c. 152; Massachusetts DIA).
Owners and officers: Owners (sole proprietors, partners, LLC members) are not required to cover themselves. Corporate officers who own at least 25% of the corporation can request an exemption (coverage is elective for them, by written waiver); non-officer employees must still be covered (Massachusetts DIA; M.G.L. c. 152, § 1(4)).
Subcontractors: If an insured business contracts work that is part of its trade or business to a contractor or sub who is uninsured, the business's insurer must pay the sub's injured workers as if they were insured, then can recover from the uninsured contractor; this doesn't apply to contracts merely ancillary to the business or to injuries away from premises the business controls (M.G.L. c. 152, § 18).
Homeowners: Domestic workers must be covered if they work at least 16 hours a week (Massachusetts DIA).
Penalties: DIA Office of Investigations issues a stop-work order; fines start at $100 per day (including weekends) until coverage is obtained, or $250 per day if the order is appealed and the business stays open; possible criminal charges of up to 1 year in prison and/or a $1,500 fine; 3-year debarment from public contracts (Massachusetts DIA; M.G.L. c. 152, § 25C).
The law: M.G.L. c. 152 (Workers' Compensation Act); §§ 1(4), 18, 25A, 25C
State agency: Massachusetts Department of Industrial Accidents (DIA)
Good to know: Massachusetts requires coverage for any employee, with no minimum. Getting caught without it means a stop-work order and fines of at least $100 a day.

Sources: mass.gov · malegislature.gov · malegislature.gov · malegislature.gov

MichiganOfficial source

Who must carry it: Private employers must carry coverage if they regularly employ 3 or more employees at one time (including part-time), or 1 or more employees for 35+ hours a week for 13+ weeks in the preceding 52 weeks (MCL 418.115; Michigan WDCA). No separate construction threshold.
Owners and officers: A sole proprietor is never an employee of the business. Partners, corporate officers and LLC member-managers are employees, but a business can file an exclusion form (WC-337) instead of insuring if every worker is excludable and no subcontractors are used: all partners; all officers owning 10%+ of stock; all member-managers owning 10%+; or a sole proprietor's spouse, child or parent (MCL 418.161, 418.611; WDCA WC-PUB-002, Apr 2026).
Subcontractors: A principal that contracts with a contractor who is uninsured (or not subject to the Act) is liable for compensation to the contractor's workers, with indemnity against the contractor; it applies only if the contractor uses workers other than excluded ones (MCL 418.171). Insurers charge premium on uninsured subcontractor payroll.
Homeowners: Householders must carry coverage for domestic servants who work 35+ hours a week for 13+ weeks in the preceding 52 weeks (MCL 418.115; Michigan WDCA).
Penalties: Failure to comply can result in prosecution and financial penalties (Michigan WDCA; MCL 418.641).
The law: MCL 418.101 et seq. (Workers' Disability Compensation Act); §§ 418.115, 418.161, 418.171, 418.611, 418.641
State agency: Michigan Department of Labor and Economic Opportunity, Workers' Disability Compensation Agency (WDCA)
Good to know: Michigan requires coverage with 3 employees at once, or just 1 who works 35+ hours a week for 13 weeks. A contractor can be liable for an uninsured sub's workers.

Sources: michigan.gov · michigan.gov · legislature.mi.gov

MinnesotaOfficial source

Who must carry it: Every employer must cover its employees unless a statutory exclusion applies or it is approved to self-insure; there is no minimum number (Minn. Stat. §§ 176.021, 176.181; Minnesota DLI). No separate construction threshold.
Owners and officers: Excluded: sole proprietors and their immediate family; partners and their spouses, parents and children; executive officers of closely held corporations (10 or fewer shareholders) owning at least 25% of stock, and managers of LLCs (10 or fewer members) owning at least 25%, if the business had under 22,880 payroll hours the prior year, plus their immediate family (Minn. Stat. § 176.041; DLI info sheet).
Subcontractors: If a subcontractor fails to comply with the comp law, the general contractor, intermediate contractor or subcontractor above it is liable for all compensation due to the sub's employees working on the contract (Minn. Stat. § 176.215, subd. 1).
Homeowners: Domestic, repair, groundskeeping or maintenance workers at a private household are excluded if they earn less than $1,000 cash in a three-month period (unless they earned more than $1,000 in a quarter at that household in the prior year) (Minn. Stat. § 176.041; DLI info sheet).
Penalties: DLI can fine uninsured employers up to $1,000 per employee per week of noncompliance and order them not to employ anyone until insured; corporate owners or officers who direct employees count as the employer; willful noncompliance is a gross misdemeanor; if a worker is hurt, the employer owes the benefits plus a penalty of 65% of those benefits (Minn. Stat. §§ 176.181 subds. 3-4, 176.183 subd. 2).
The law: Minn. Stat. Ch. 176; §§ 176.041, 176.181, 176.183, 176.215
State agency: Minnesota Department of Labor and Industry (DLI)
Good to know: Minnesota has no minimum employee count. A general contractor can be liable for an uninsured sub's injured worker, and uninsured employers face fines up to $1,000 per employee per week.

Sources: dli.mn.gov · revisor.mn.gov · revisor.mn.gov · revisor.mn.gov · revisor.mn.gov

MississippiSecondary source

Who must carry it: Employers with 5 or more workers regularly in the same business must carry coverage; employers with fewer may opt in (Mississippi WCC fact sheet; Miss. Code § 71-3-5). Domestic servants, farmers and farm labor are excluded unless voluntarily covered. No separate construction threshold.
Owners and officers: By written action of its governing authority, and with the person's written agreement, an employer may exempt its sole proprietor, a partner, or an employee owning 15% or more of the corporate stock; an exempt person doesn't count toward the 5-worker threshold (Miss. Code § 71-3-5, 2023 text via Justia).
Subcontractors: The Commission's fact sheet says employees of subcontractors get special protection under the law (Mississippi WCC). Under Miss. Code § 71-3-7, employees of an uninsured subcontractor are treated as employees of the general contractor; this applies only where there is a general contract, so a mere premises owner does not qualify (per ALFA International compendium, secondary).
Homeowners: Domestic servants are excluded unless voluntarily covered (Miss. Code § 71-3-5). A premises owner who is not a general contractor is not made the employer of an uninsured sub's workers under § 71-3-7 (per ALFA International compendium, secondary).
Penalties: Failing to secure required coverage is a misdemeanor punishable by a fine of up to $1,000, up to 1 year in jail, or both; a corporation's president, secretary and treasurer face the same penalty and are personally liable, with the corporation, for benefits owed; the Commission can also impose a civil penalty of up to $10,000 (Miss. Code § 71-3-83, 2023 text via Justia).
The law: Miss. Code Title 71, Ch. 3; §§ 71-3-5, 71-3-7, 71-3-83
State agency: Mississippi Workers' Compensation Commission
Good to know: Mississippi requires coverage once you have 5 or more regular employees. Going without required coverage is a misdemeanor, and corporate officers can be personally liable.

Sources: mwcc.ms.gov · law.justia.com · law.justia.com · alfainternational.com

MissouriOfficial source

Who must carry it: Employers with 5 or more employees must carry coverage; construction-industry employers (those who erect, demolish, alter or repair improvements) need coverage with 1 or more employees. Corporate officers and LLC members count toward the total; sole proprietors and partners do not (RSMo 287.030; Missouri DOLIR).
Owners and officers: Sole proprietors and partners are not covered unless they elect coverage with their insurer. LLC members are presumed covered unless they opt out with their insurer; corporate officers count toward the employee total (Missouri Division of Workers' Compensation).
Subcontractors: A business that has work done under contract on or about its premises as part of its usual business is the statutory employer of the contractor's and subcontractors' injured workers; liability runs up the chain only if no immediate or intermediate employer insured the worker (RSMo 287.040.1, .3).
Homeowners: The statutory-employer rule does not apply to the owner of premises on which improvements are being built by an independent contractor; the contractor is treated as the employer of its subs' workers (RSMo 287.040.2).
Penalties: Knowingly failing to insure is a class A misdemeanor plus a penalty of up to three times the annual premium or up to $50,000, whichever is higher; a repeat offense is a class E felony (RSMo 287.128.7).
The law: RSMo Chapter 287; §§ 287.030, 287.040, 287.128
State agency: Missouri Department of Labor and Industrial Relations, Division of Workers' Compensation
Good to know: Missouri requires coverage with 5 employees, but construction businesses need it with just 1. Homeowners building or improving their property through an independent contractor are not the crew's statutory employer.

Sources: labor.mo.gov · revisor.mo.gov · revisor.mo.gov

MontanaOfficial source

Who must carry it: The Act covers employers broadly, with listed exemptions such as household/domestic and casual employment (MCA 39-71-401). No minimum headcount. In construction, a person working at locations other than their own business location must carry coverage unless they hold an Independent Contractor Exemption Certificate (ICEC) (MCA 39-71-401(3), 39-71-417).
Owners and officers: Exempt unless coverage is elected: sole proprietors, working partners and LLP members, and working members of member-managed LLCs; corporate officers and LLC managers owning 10% or more (alone or with listed relatives), and listed relatives of 10% owners (MCA 39-71-401(2)(d), (2)(r)). Independent contractors need an ICEC ($125, no test) or must elect coverage (MCA 39-71-417; Montana DLI).
Subcontractors: A business that hires an independent contractor who has not secured coverage is liable for benefits to the contractor's employees; if the hired worker is not truly independent and the work is part of the hirer's trade or business, the hirer is liable for all benefits (MCA 39-71-405(1)-(2)).
Homeowners: Household or domestic employment and casual employment are exempt (MCA 39-71-401(2)(a)-(b)); if contracted work is casual employment for the hirer, the contractor becomes the employer (MCA 39-71-405(3)).
Penalties: Uninsured employers can be assessed a penalty of double the premium they would have paid (minimum $200) and are liable for 100% of an injured worker's medical and wage-loss benefits, which the Uninsured Employers' Fund collects from them; the worker may also sue (Montana DLI UEF page; MCA 39-71-502 et seq.). Independent contractors can be fined up to $5,000 per violation for working without an ICEC or coverage, or for misrepresenting independent-contractor status (Montana DLI ICEC page).
The law: MCA Title 39, Ch. 71; §§ 39-71-401, 39-71-405, 39-71-417
State agency: Montana Department of Labor and Industry, Employment Relations Division
Good to know: Montana has no minimum employee count. In construction, anyone working without coverage needs an Independent Contractor Exemption Certificate, and a hiring contractor is liable for an uninsured sub's employees.

Sources: erd.dli.mt.gov · erd.dli.mt.gov · erd.dli.mt.gov · mca.legmt.gov · mca.legmt.gov

NebraskaOfficial source

Who must carry it: The Act covers employers in Nebraska who employ 1 or more employees in their regular trade, business, profession or vocation (Neb. Rev. Stat. § 48-106(1)). Exceptions include household domestic servants in a private residence, agricultural operations with only related employees, and agricultural operations with unrelated employees unless they have 10 or more unrelated full-time employees on each working day for 13 weeks in a calendar year (§ 48-106(2)). No separate construction threshold.
Owners and officers: Sole proprietors, partners, LLC members and self-employed persons working substantially full time in the business are not covered unless they elect coverage in writing with the insurer. Executive officers owning 25% or more of a corporation's stock are not employees unless they elect coverage in writing; officers owning less are covered (Neb. Rev. Stat. § 48-115(9)-(10)).
Subcontractors: A person who uses a 'scheme, artifice or device' (such as contracting work out) to avoid comp responsibility is treated as the employer, jointly liable with the immediate employer. This does not apply to an owner who in good faith hires a contractor, or a contractor who in good faith hires a sub, and requires that contractor or sub to carry comp from an insurer licensed in Nebraska (Neb. Rev. Stat. § 48-116).
Homeowners: Court decisions annotated to § 48-116 hold that an owner who hires a worker to remodel or move a residence is not an employer under the Act, even if the owner earns rental income from it (Neb. Rev. Stat. § 48-116, annotations).
Penalties: Civil fine of up to $1,000 per violation, with each day of continued failure a separate violation; if criminally charged, up to one year in jail, a $1,000 fine, or both; employers can be enjoined from doing business in Nebraska until they comply (Nebraska WCC employer FAQ).
The law: Neb. Rev. Stat. Ch. 48, Art. 1; §§ 48-106, 48-115, 48-116
State agency: Nebraska Workers' Compensation Court
Good to know: Nebraska requires coverage with one employee in your regular business. Require every contractor or sub you hire to carry comp from a Nebraska-licensed insurer, which protects you from liability for their workers.

Sources: newcc.gov · nebraskalegislature.gov · nebraskalegislature.gov · nebraskalegislature.gov

NevadaSecondary source

Who must carry it: Every person, firm or private corporation with workers under a contract of hire must carry coverage unless a statute excludes them (NRS 616A.230; Nevada DIR). Exclusions include casual work outside the employer's trade and certain household and farm roles (NRS 616A.110).
Owners and officers: Sole proprietors (including working partners) are not required to cover themselves, but a sole proprietor acting as a principal contractor or subcontractor where coverage is required must be covered. Officers and managers of a corporation or LLC may reject coverage in writing to the company and insurer (NRS 616A.310, 616B.624; Nevada DIR).
Subcontractors: Subcontractors, independent contractors and their employees are treated as employees of the principal contractor (NRS 616A.210). Licensed contractors can't use the 'independent enterprise' exemption (NRS 616B.603), so in construction the principal contractor is almost always responsible and may require proof of subs' coverage.
Penalties: A principal contractor without required coverage can face monetary penalties, criminal prosecution or an order to shut down, and may owe the full claim cost plus administrative fees if an uninsured sub's worker is hurt (Nevada DIR; NRS 616C.220).
The law: NRS Chapters 616A-616D; NRS 616A.210, 616A.230, 616B.603, 616B.624
State agency: Nevada Department of Business and Industry, Division of Industrial Relations, Workers' Compensation Section
Good to know: Nevada requires coverage for anyone working under a contract of hire. In construction, the principal contractor is almost always responsible for subs' workers, so get proof of coverage.

Sources: dir.nv.gov · leg.state.nv.us

New HampshireOfficial source

Who must carry it: Every employer with any employees, full- or part-time, including family members, must cover them (RSA 281-A:5; NH DOL). A corporation or LLC with 3 or fewer executive officers or members and no other employees is not required to carry coverage; a 4th officer or member triggers the requirement (RSA 281-A:2, VIII).
Owners and officers: Sole proprietors, partners and self-employed persons need not cover themselves but may elect coverage (RSA 281-A:3). Once coverage is required, up to three executive officers or LLC members may elect to be excluded (RSA 281-A:18-a; NH DOL).
Subcontractors: A general contractor may require sole-proprietor or partner subcontractors without employees to carry coverage (NH DOL). A contractor who subcontracts any part of a contract is liable for compensation to the sub's employees unless the sub has secured it, and can recover from the sub; 'contractor' also includes anyone (other than the landowner) who has soil, rock or mineral excavation or drilling, or timber cutting, done (RSA 281-A:18).
Penalties: Civil penalty of up to $2,500, plus up to $100 per employee per day of noncompliance (for up to one year); people who control pay decisions and knowingly fail to insure can be personally liable; the commissioner can get a court injunction barring the employer from doing business in New Hampshire; purposely failing to insure is a class B felony (RSA 281-A:7).
The law: RSA Ch. 281-A; RSA 281-A:2, 281-A:3, 281-A:5, 281-A:7, 281-A:18, 281-A:18-a
State agency: New Hampshire Department of Labor, Workers' Compensation Division
Good to know: New Hampshire requires coverage for any employee, including family. A general contractor is liable for an uninsured sub's workers, and penalties run up to $100 per employee per day.

Sources: nh.gov · gc.nh.gov · gc.nh.gov

New JerseySecondary source

Who must carry it: All New Jersey employers not covered by federal programs must carry coverage or be approved to self-insure, with no minimum payroll; out-of-state employers may need coverage if the contract is made or work is done in NJ (N.J.S.A. 34:15-1 et seq.; NJ Division of Workers' Compensation).
Owners and officers: Corporations must cover anyone paid for services, including corporate officers. Partners, LLC members and sole proprietors may opt to cover themselves; coverage is required once anyone else is paid. Corporate officers, partners and LLC members can be personally liable for benefits if the business is uninsured (NJ DWC Employer's Guide WC-373, 10/25).
Subcontractors: A contractor is liable for compensation to the employees of a subcontractor who has not secured coverage (N.J.S.A. 34:15-79).
Penalties: Failure to insure is a disorderly persons offense, and a fourth-degree crime if willful; penalties of up to $5,000 for the first 10 days and $5,000 for each later 10-day period; officers can be personally liable, penalties are not dischargeable in bankruptcy and can become liens (NJ DWC).
The law: N.J.S.A. 34:15-1 et seq.; 34:15-79
State agency: New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation
Good to know: New Jersey requires coverage for anyone you pay, including corporate officers, with no small-business exemption. Penalties run up to $5,000 per 10 days uninsured.

Sources: nj.gov · nj.gov · law.justia.com

New MexicoOfficial source

Who must carry it: Businesses with 3 or more workers must carry coverage, counting working owners, relatives and part-time, temporary and seasonal workers (New Mexico WCA). Employers in activities that must be licensed under the Construction Industries Licensing Act need coverage regardless of the number of employees (NMSA 1978 § 52-1-6; WCA).
Owners and officers: Owners who work in the business count as employees. Corporate officers and LLC executives owning 10% or more may opt out, but still count toward the 3-employee threshold. Construction sole proprietors may decline coverage by filing the CID Sole Proprietor Affirmative Election form (New Mexico WCA).
Subcontractors: If a business has work that is part of its own trade or business done by a contractor who is not an independent contractor, the business is liable for compensation as if it had done the work itself (NMSA 1978 § 52-1-22). The WCA coverage page does not address general contractor liability further.
Homeowners: Domestic servants are exempt from coverage (New Mexico WCA).
Penalties: Penalties range from fines to an injunction halting the business until coverage is in place; uninsured employers may owe the injured worker's medical costs and lost wages (New Mexico WCA).
The law: NMSA 1978 Ch. 52, Art. 1 (Workers' Compensation Act); §§ 52-1-6, 52-1-22
State agency: New Mexico Workers' Compensation Administration (WCA)
Good to know: New Mexico requires coverage once you have 3 workers, but licensed construction businesses must cover every employee. Exempt officers still count toward the 3.

Sources: workerscomp.nm.gov · nmonesource.com

New YorkOfficial source

Who must carry it: Most individuals providing services to a for-profit business are employees and must be covered; there is no minimum number (WCL §§ 2, 10, 50; NY WCB).
Owners and officers: Not required: sole proprietors, partnerships, LLCs and LLPs with no employees (owners/members can buy voluntary coverage); one- or two-person corporations where the officers own all the stock, hold all offices and there are no other workers. Coverage is required if a corporation has more than two officers or shareholders, or officers don't own all shares (NY WCB).
Subcontractors: A contractor who subcontracts hazardous work is liable for compensation to the sub's employees if the sub hasn't secured coverage, and can recover from the sub; it isn't liable for sole-officer/two-officer corporation owners, self-employed persons or partners (WCL § 56).
Homeowners: Coverage is required for a domestic worker employed 40 or more hours a week by the same employer; a homeowners policy's workers' comp rider does not cover them (NY WCB household employers page).
Penalties: Up to $2,000 per 10-day period uninsured, or twice the cost of coverage; misdemeanor (5 or fewer employees) or Class E felony (more than 5) with fines up to $50,000, Class D felony for repeats; stop-work orders halting all business activity (WCL § 141-a); debarment from public works bids; officers can be personally liable (WCL §§ 52, 141-a, 141-b; NY WCB).
The law: N.Y. Workers' Compensation Law; §§ 2, 10, 50, 52, 56, 141-a
State agency: New York State Workers' Compensation Board
Good to know: New York requires coverage for virtually every employee, and only one- or two-person corporations owned entirely by their officers are exempt. General contractors are liable for an uninsured sub's workers.

Sources: wcb.ny.gov · wcb.ny.gov · apps.wcb.ny.gov · apps.wcb.ny.gov · nysenate.gov

North CarolinaOfficial source

Who must carry it: Employers who regularly employ 3 or more employees in the same business must carry coverage; corporate officers count toward the 3. Any employer with 1 or more employees working with radiation must be covered (N.C.G.S. §§ 97-2(1), 97-13; NC Industrial Commission). Subcontractors with fewer than 3 employees are still pulled in through the contractor-liability rule (§ 97-19).
Owners and officers: Corporate executive officers are employees and count toward the 3, but may be excluded from the policy. Sole proprietors, partners and LLC members actively engaged in the business are not counted but may elect coverage by notifying the insurer (N.C.G.S. § 97-2(2); NC Industrial Commission).
Subcontractors: A principal contractor, intermediate contractor or subcontractor who sublets work without getting a certificate from the sub's comp carrier (or a Department of Insurance certificate of compliance for a self-insured sub) is liable for the sub's workers, even if the sub has fewer than 3 employees; there's no liability if the sub actually had a policy in effect on the injury date (N.C.G.S. § 97-19).
Homeowners: Domestic service is excluded from covered employment (N.C.G.S. § 97-2(1)). The § 97-19 contractor-liability rule applies to principal and intermediate contractors and subcontractors who sublet work; it does not name homeowners.
Penalties: Civil penalty of $1 per employee per day, minimum $20 and maximum $100 per day; willful failure is a Class H felony and neglect a Class 1 misdemeanor, also for any person with authority to bring the employer into compliance, who can be assessed up to 100% of benefits due (N.C.G.S. § 97-94).
The law: N.C.G.S. Chapter 97; §§ 97-2, 97-19, 97-94
State agency: North Carolina Industrial Commission
Good to know: North Carolina requires coverage at 3 employees, but if you sublet work without collecting the sub's certificate of insurance, you can be liable for the sub's crew even if the sub has fewer than 3.

Sources: ic.nc.gov · ncleg.gov · ncleg.gov · ncleg.gov

North DakotaOfficial source

Who must carry it: Employers must have coverage from the state fund, Workforce Safety & Insurance (WSI), before employees begin working, covering full-time, part-time, seasonal and occasional workers, with limited exceptions; North Dakota law does not allow private insurers to write workers' comp (NDCC § 65-04-33; WSI).
Owners and officers: Owners, partners, corporate officers and their spouses are exempt from mandatory coverage but can buy elective coverage from WSI (NDCC Title 65; WSI coverage types page). LLC member rules not stated on the page.
Subcontractors: A general contractor's subcontractors and independent contractors (and their workers) are deemed its employees, and the GC is liable for their unpaid premium and penalties for work done under it until the sub pays (NDCC § 65-04-26.2). A person performing services is presumed to be an employee (NDCC § 65-01-03(1)).
Penalties: Back premium, penalties and interest; liability for the actual cost and reserves of claims while uninsured, and workers can sue (NDCC § 65-04-33(4)); WSI cease-and-desist orders; $10,000 plus $100 per day penalty, and $5,000 plus $100 per day for a contractor who willfully uses a sub under a cease-and-desist order (NDCC § 65-04-27.2).
The law: NDCC Title 65; §§ 65-01-03, 65-04-26.2, 65-04-27.2, 65-04-33
State agency: North Dakota Workforce Safety & Insurance (WSI)
Good to know: North Dakota coverage must be bought from the state fund (WSI) before your employees start work. A general contractor can be billed for an uninsured sub's premiums.

Sources: workforcesafety.com · workforcesafety.com · workforcesafety.com · workforcesafety.com · ndlegis.gov

OhioOfficial source

Who must carry it: Employers with 1 or more employees must carry coverage through the Ohio BWC state fund (or be approved to self-insure); independent contractors and subcontractors must cover their own employees (Ohio BWC). BWC is the exclusive provider of workers' comp insurance in Ohio (BWC Annual Report FY2025).
Owners and officers: Corporate officers are employees of the corporation. Coverage is elective for sole proprietors, partners, ministers and officers of a family farm corporation (Ohio BWC); the election is made by written notice to BWC naming the person, and no benefits are paid before BWC receives it (ORC 4123.01).
Subcontractors: Each contractor and subcontractor must carry BWC coverage for its own employees (Ohio BWC). If a contractor or sub hasn't paid its premiums, its workers are treated as employees of the party that hired it (ORC 4123.01). A person working under a construction contract is an employee, not an independent contractor, if at least 10 of 20 listed criteria apply (ORC 4123.01(A)(1)(c)).
Penalties: An injured worker of a non-complying employer can file a claim that the state pays from its surplus fund, and the employer must repay the full award, which the Attorney General can collect; the worker can also sue the employer (ORC 4123.75).
The law: Ohio Revised Code Chapter 4123; ORC 4123.01, 4123.35, 4123.75
State agency: Ohio Bureau of Workers' Compensation (BWC)
Good to know: Ohio coverage comes only from the state fund (BWC), and you need it with one employee. If a sub hasn't paid its BWC premiums, its workers can be treated as yours.

Sources: bwc.ohio.gov · codes.ohio.gov · codes.ohio.gov · dam.assets.ohio.gov

OklahomaSecondary source

Who must carry it: Most employers must secure compensation (insurance, approved self-insurance, or a qualified employer plan). Exempt: agricultural/horticultural employers with under $100,000 in annual ag payroll, and businesses with 5 or fewer employees who are all related by blood or marriage (85A O.S.; Oklahoma WCC guide). No separate construction threshold.
Owners and officers: Sole proprietors are not employees; LLC members and corporate stockholder-employees owning at least 10% are not employees; both may elect coverage (Oklahoma WCC guide). Corporate officers, sole proprietors, partners and LLC members who are not subcontractors may exclude themselves by agreement (85A O.S. § 8).
Subcontractors: A primary contractor may be liable for injuries to a subcontractor's employees if the subcontractor did not secure coverage (Oklahoma WCC guide).
Penalties: Civil penalties of up to $1,000 per day; the injured worker can sue in district court; a court can bar the employer from employing anyone until coverage is secured or penalties are paid (Oklahoma WCC guide).
The law: 85A O.S. (Administrative Workers' Compensation Act); § 8
State agency: Oklahoma Workers' Compensation Commission
Good to know: Oklahoma requires most employers to carry coverage, with a narrow exemption for family-only businesses of 5 or fewer. A primary contractor can be liable for an uninsured sub's workers.

Sources: ok.gov · law.justia.com

OregonOfficial source

Who must carry it: Almost all employers with workers in Oregon must carry coverage; a worker is anyone paid to work who isn't an independent contractor (ORS Ch. 656; Oregon WCD). Casual labor under a set 30-day payroll amount is exempt. Construction and landscape businesses registered with the CCB or LCB as having no workers can't hire even casual labor.
Owners and officers: Exempt: real partners and most LLC members (in construction and landscaping, they need a substantial ownership interest); corporate officers who are directors and own at least 10% of stock (or the average). Construction and landscape firms are generally capped at two exempt officers/members, or one per 10 employees, unless all are family. Owners working under contract must also qualify as independent contractors (Oregon WCD guide; ORS 656.027).
Subcontractors: A person who awards a contract for labor that is a normal and customary part of its own trade or business is responsible for comp coverage for the contract's workers unless the contractor provides it before labor begins; otherwise injured workers are paid as if the hirer were a noncomplying employer (ORS 656.029). This does not apply when the hirer holds a CCB or LCB license required for the work (ORS 656.021), but prime contractors must still confirm subs are covered (Oregon WCD guide).
Homeowners: Workers doing gardening, maintenance, repair, remodeling or similar work in or about the employer's private home are nonsubject workers (ORS 656.027(2)), and ORS 656.029 only reaches work that is part of the hirer's trade or business.
Penalties: First offense: twice the premium owed, minimum $1,000; continued noncompliance up to $250 per day with no cap; WCD seeks a permanent injunction; noncomplying employers pay full claim costs plus a fee; officers, directors and LLC members/managers can be personally liable (Oregon WCD guide).
The law: ORS Chapter 656; ORS 656.017, 656.027, 656.029
State agency: Oregon Department of Consumer and Business Services, Workers' Compensation Division (WCD)
Good to know: Oregon requires coverage for nearly every worker. Construction and landscape firms registered as having no workers can't hire even casual help, and homeowners hiring remodeling work on their own home aren't treated as the crew's employer.

Sources: wcd.oregon.gov · oregonlegislature.gov

PennsylvaniaOfficial source

Who must carry it: Any employer with at least 1 employee who could be injured in Pennsylvania must carry coverage, including part-time workers and family members such as a spouse or children, unless every employee is excluded (PA Workers' Compensation Act; PA L&I). No separate construction threshold.
Owners and officers: Sole proprietors and general partners with no other employees are excluded, as are LLCs whose only workers are members. Executive officers may apply to be excluded: an ownership interest in an S corporation or at least 5% of a C corporation is required; nonprofit officers must serve unpaid (WC Act § 104; PA L&I, forms LIBC-509/513). Family members get no exemption.
Subcontractors: A contractor who subcontracts work is liable for compensation to the sub's employees unless the sub has secured it. Anyone who contracts to have soil, rock or mineral excavation or drilling, or timber cutting, done, or work that's a regular or recurrent part of its own business, counts as a 'contractor' for this rule (WC Act § 302(a)). An employer who lets a contractor's workers onto premises it controls to do part of its regular business is also liable if the contractor hasn't insured (§§ 203, 302(b)). Municipalities must require proof of coverage, or an affidavit of no employees, before issuing a building permit (PA L&I).
Homeowners: Domestic workers are excluded unless they've elected to come under the Act (PA L&I). For most work, the statutory-employer rules reach contractors and businesses having their own regular business done, but § 302(a) treats anyone who contracts for excavation, drilling or timber cutting as a 'contractor' without that business limit, so a homeowner hiring excavation should confirm the contractor is insured. Section 302(a) doesn't apply to an owner or lessee of land principally used for agriculture who isn't a covered employer and contracts for timber removal.
Penalties: Failure to insure is a third-degree misdemeanor punishable by up to a $2,500 fine and 1 year in prison for each day; intentional failure is a third-degree felony punishable by up to a $15,000 fine and 7 years for each day; the employer must pay all benefits awarded and can be sued by the injured worker (WC Act § 305; PA L&I).
The law: Pennsylvania Workers' Compensation Act, Act of June 2, 1915, P.L. 736, No. 338 (77 P.S. § 1 et seq.); §§ 104, 203, 302, 305
State agency: Pennsylvania Department of Labor & Industry, Bureau of Workers' Compensation
Good to know: Pennsylvania requires coverage with one employee, including part-timers and your own family. Your township will ask for proof of coverage, or an affidavit that you have no employees, before it issues a building permit.

Sources: pa.gov · pa.gov · palegis.us

Rhode IslandOfficial source

Who must carry it: Employers with 1 or more employees must carry coverage (R.I. Gen. Laws Ch. 28-29 et seq.; RI DLT). No separate construction threshold.
Owners and officers: Individual owners and partners are exempt. Corporate officers are usually covered as employees unless they file a waiver (DWC-11), which takes them out of the comp system (RI DLT). LLC member rules not stated on the DLT page.
Subcontractors: An independent contractor is not eligible for comp benefits and must file a DWC 11-IC with each business that hires it (RI DLT). The DLT page does not address general contractor liability for an uninsured sub's workers; ask your insurer.
Penalties: Civil penalty of up to $1,000 for each day without coverage; knowingly failing to insure is a felony punishable by up to 2 years in prison, and corporate officers, LLC managers and general partners can be held personally responsible; the DLT Director must suspend the business's operations until coverage is obtained (R.I. Gen. Laws § 28-36-15; RI DLT).
The law: R.I. Gen. Laws Title 28, Chs. 29-38 (Workers' Compensation Act); § 28-36-15
State agency: Rhode Island Department of Labor and Training, Division of Workers' Compensation
Good to know: Rhode Island requires coverage with one employee. Going without it can mean fines of up to $1,000 a day and a shutdown order.

Sources: dlt.ri.gov · webserver.rilegislature.gov · webserver.rilegislature.gov

South CarolinaOfficial source

Who must carry it: Employers who regularly employ 4 or more employees in South Carolina must carry coverage; part-time workers and family members count. Exempt: employers with total annual payroll under $3,000 in the prior year, plus casual, agricultural, railroad and federal employment (S.C. Code § 42-1-360; SC WCC).
Owners and officers: Sole proprietors and partners actively engaged in the business may elect to be covered (S.C. Code § 42-1-130). A corporate officer may elect not to operate under the Act (§ 42-1-520). LLC member rules not confirmed.
Subcontractors: An owner who contracts out work that is part of its own trade or business is liable to the contractor's workers as if it employed them, and liability runs up the chain from sub-subcontractors to contractors (S.C. Code §§ 42-1-400 to 42-1-420). A higher-tier contractor that collects proof of the sub's coverage on the Commission-approved form when the sub is engaged is relieved of liability (§ 42-1-415).
Homeowners: The owner-liability rule (§ 42-1-400) applies only when the contracted work is part of the owner's own trade or business, so it generally doesn't reach a homeowner hiring work on their own home.
Penalties: An employer that fails to secure required coverage can be fined $1 per employee per day, with a minimum of $10 and maximum of $100 a day, assessed by the Commission; willful refusal is a misdemeanor punishable by a fine of $100 to $1,000, 30 days to 6 months in jail, or both (S.C. Code §§ 42-5-40, 42-5-45).
The law: S.C. Code Title 42 (Workers' Compensation); §§ 42-1-130, 42-1-360, 42-1-400 to 42-1-420, 42-5-40, 42-5-45
State agency: South Carolina Workers' Compensation Commission
Good to know: South Carolina requires coverage at 4 employees, counting part-timers and family. Collect a sub's proof of coverage on the state's form when you hire them, or you can be liable for their crew.

Sources: wcc.sc.gov · scstatehouse.gov · scstatehouse.gov · wcc.sc.gov

South DakotaOfficial source

Who must carry it: The law covers all employers with only limited exceptions, such as domestic servants (unless working more than 20 hours a week for the employer, subject to a 6-week test), farm and agricultural labor, certified independent contractors, certain elected officials and workfare participants (SDCL Title 62; South Dakota DLR). No minimum headcount and no separate construction rule.
Owners and officers: Corporate executive officers may reject coverage by written notice (and withdraw the rejection later) (SDCL 62-3-5.1). Rules for sole proprietors, partners and LLC members were not confirmed in an official source.
Subcontractors: A principal or contractor is liable for compensation to employees of a subcontractor injured on, in or about the premises where the principal has undertaken the work (SDCL 62-3-10).
Homeowners: Domestic servants are exempt unless they work for the employer more than 20 hours in a calendar week (with a six-week, 13-week-period test) (SDCL 62-3-15; South Dakota DLR).
Penalties: An employer that fails to secure coverage as required is deemed to have elected not to operate under the workers' comp law (SDCL 62-5-7). No fine amount was found in SDCL ch. 62-5.
The law: SDCL Title 62 (Workers' Compensation); SDCL 62-3-5.1, 62-3-10, 62-3-15, 62-5-1, 62-5-7
State agency: South Dakota Department of Labor and Regulation, Division of Labor and Management
Good to know: South Dakota requires coverage for virtually every employer with employees; there is no minimum count. A general contractor is liable for an uninsured sub's workers hurt on the job site.

Sources: dlr.sd.gov · sdlegislature.gov · sdlegislature.gov

TennesseeSecondary source

Who must carry it: Non-construction: 5 or more employees, counting part-time workers, minors and working family members (sole proprietors, partners and LLC owners not counted; full-time corporate officers counted). Construction: 1 or more employees, including seasonal, part-time, family and as-needed workers, based on the nature of the business (T.C.A. Title 50, Ch. 6; Tennessee BWC).
Owners and officers: Construction business owners must carry coverage on themselves unless they qualify for and register on the state's Workers' Compensation Exemption Registry; an exemption covers only the named owner, and exempt owners must still cover all employees. Outside construction, owners of sole proprietorships, LLCs and partnerships aren't counted, and full-time corporate officers may exclude themselves with Form I-6 (Tennessee BWC).
Subcontractors: A principal, intermediate contractor or subcontractor is liable for compensation to a sub's employees injured on the job premises, like the immediate employer (T.C.A. § 50-6-113(a), (d)); for construction services providers, § 50-6-113 does not apply (§ 50-6-113(f)) and the construction rules in Part 9 (T.C.A. § 50-6-901 et seq.) govern. Check every sub's coverage or exemption before work.
Penalties: Employers without required coverage may be assessed a penalty equal to 1.5 times their total estimated annual premium; penalties also apply to employers who misclassify workers as independent contractors or subcontractors (Tennessee BWC Uninsured Employers Fund page).
The law: T.C.A. Title 50, Ch. 6; §§ 50-6-102, 50-6-113, 50-6-901 et seq.
State agency: Tennessee Department of Labor and Workforce Development, Bureau of Workers' Compensation
Good to know: Tennessee construction businesses need coverage with one employee, and owners must cover themselves unless they're on the state Exemption Registry. Other businesses need it at 5 employees.

Sources: tn.gov · tn.gov · tn.gov · tn.gov · law.justia.com

TexasSecondary source

Who must carry it: Coverage is elective for most private employers; those without it are 'non-subscribers' (TDI-DWC). Exception for construction: on a building or construction project for a governmental entity, each person working on the site or providing services for the project must have comp coverage, and the contractor must post DWC Notice 8 (28 TAC § 110.110; TDI-DWC Notice 8; Tex. Lab. Code § 406.096). Governmental entities themselves must have coverage.
Owners and officers: Coverage is elective in most private businesses. When a business elects coverage, its sole proprietor, partners and corporate executive officers are covered as employees unless specifically excluded by an endorsement to the policy (Tex. Lab. Code § 406.097, via texas.public.law).
Subcontractors: No general duty to insure subs. A general contractor and subcontractor can sign a written agreement under which the GC provides coverage, which makes the GC the employer of the sub and its employees for comp purposes (Tex. Lab. Code § 406.123, via texas.public.law). On government construction projects, everyone working on the site must be covered (28 TAC § 110.110).
Penalties: No penalty for choosing not to carry coverage, but non-subscribers must post a notice of no coverage (Notice 5), give written notice to new employees, and file a notice with DWC after hiring the first employee and each year between Feb. 1 and Apr. 30 (TDI-DWC). In an injury lawsuit, a non-subscriber can't argue contributory negligence, assumption of risk or a co-worker's negligence (Tex. Lab. Code § 406.033, via texas.public.law).
The law: Tex. Lab. Code Ch. 406; §§ 406.002, 406.005, 406.033, 406.096, 406.097, 406.123; 28 TAC § 110.110
State agency: Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC)
Good to know: Texas doesn't require most private businesses to carry workers' comp, but contractors on government construction jobs must. If you go without it, you must notify workers and the state, and you lose key defenses if an injured worker sues.

Sources: tdi.texas.gov · tdi.texas.gov · agate.tdi.texas.gov · texas.public.law · texas.public.law · texas.public.law

UtahSecondary source

Who must carry it: Every employer must provide coverage for its employees; businesses with no employees, such as sole proprietorships, partnerships or LLCs where the owners do all the work, may not need it (Utah Code §§ 34A-2-201, 34A-2-104; Utah Labor Commission). No separate construction threshold.
Owners and officers: Sole proprietors, partners and LLC members are not automatically covered but may elect coverage (Utah Labor Commission employer guide, 2016). Corporate officers and directors are covered by default, but the corporation may exclude some or all of them by notifying its insurer (or the Industrial Accidents Division if uninsured) (2016 guide). A registered Utah corporation with no employees other than its directors and officers can file to exclude them, up to five people; corporations that contract out their work, such as construction contractors, can't use this exclusion and should apply for a Coverage Waiver instead (Utah Labor Commission employers page).
Subcontractors: A hiring employer should verify a contractor's coverage; if the contractor is uninsured, the hiring employer is treated as the statutory employer and is liable for the contractor's employees (Utah Labor Commission employer guide; Utah Code § 34A-2-103(7)).
Penalties: Penalties of at least $1,000, injunctions barring continued business operations, and loss of exclusive-remedy protection, so injured workers can sue the employer and its employees (Utah Labor Commission employers page).
The law: Utah Code Title 34A, Ch. 2; §§ 34A-2-103, 34A-2-104, 34A-2-201
State agency: Utah Labor Commission, Industrial Accidents Division
Good to know: Utah requires coverage once you have employees. If you hire an uninsured contractor, you can be treated as the employer of its crew, so verify coverage or a Coverage Waiver first.

Sources: laborcommission.utah.gov · laborcommission.utah.gov · le.utah.gov

VermontOfficial source

Who must carry it: Private employers must secure compensation for their employees through insurance or approved self-insurance; there is no minimum number of employees (21 V.S.A. § 687(a)). Exclusions include casual work outside the employer's trade, farm employers with under $10,000 in annual payroll, and service in or about a private dwelling unless the employer opts in (21 V.S.A. § 601(14)). No separate construction threshold.
Owners and officers: Sole proprietors and partners of an unincorporated business are excluded if they meet the statute's independence conditions, including a written contract stating they are not employees under the Act (21 V.S.A. § 601(14)(F)). With the Commissioner's approval, a corporation or LLC may exclude up to four executive officers, managers or members; if all of them are excluded and there are no other employees, it need not buy coverage (§ 601(14)(H)). Corporate officers, majority stockholders and partners can be personally liable for benefits if the business fails to insure (§ 687(b)).
Subcontractors: The 'employer' includes the owner or lessee of premises, or anyone who is virtually the proprietor or operator of the business there, even when the work is done by an independent contractor, so a business can be responsible for an uninsured contractor's workers (21 V.S.A. § 601(3)). Agree on coverage in writing before work starts and collect proof.
Homeowners: People doing any type of service in or about a private dwelling are excluded from coverage unless the employer notifies the Commissioner that it wants coverage; an insurance policy counts as notice (21 V.S.A. § 601(14)(E)).
Penalties: Administrative penalty of up to $100 per day for the first 7 days and up to $150 per day after; stop-work orders, with up to $250 per day (and up to $250 per employee per day) for ignoring an order to insure and up to 3 years' debarment from state contracts; violating a stop-work order brings civil penalties of $5,000-$10,000 or criminal fines up to $10,000 and 180 days in jail (21 V.S.A. § 692).
The law: 21 V.S.A. Ch. 9; §§ 601, 687, 692
State agency: Vermont Department of Labor, Workers' Compensation and Safety Division
Good to know: Vermont requires coverage with one employee. If you hire an uninsured contractor for work on your business premises, you can be responsible for its workers, and the state can shut down an uninsured job with a stop-work order.

Sources: labor.vermont.gov · legislature.vermont.gov · legislature.vermont.gov · legislature.vermont.gov · labor.vermont.gov

VirginiaOfficial source

Who must carry it: Businesses with more than two (3 or more) part- or full-time employees regularly in service must carry coverage. Executive officers count, and employees of subcontractors count when you hire subs in your own trade or to fulfill a contract (Va. Code § 65.2-101; Virginia WCC Employer FAQ, rev. 02/25). No separate construction threshold.
Owners and officers: Sole proprietors with no employees or subs need not carry coverage. Corporate officers and LLC managers are employees even without salary, and may reject coverage only if the business has a policy and they file a Rejection of Coverage form. A single-member LLC member isn't covered unless they elect it with the insurer (Virginia WCC Employer FAQ).
Subcontractors: An owner who subcontracts work that is part of its own trade or business is liable to the sub's workers as if it employed them directly; a contractor doing work for someone else (outside that person's trade) who subcontracts is liable the same way, and liability carries down through further subcontracts (Va. Code § 65.2-302(A)-(C)).
Homeowners: Owner liability under § 65.2-302(A) applies only when the work is part of the owner's own trade or business; when a homeowner hires a contractor, the contractor who subcontracts is the one liable for its subs' workers (§ 65.2-302(B)).
Penalties: Civil penalty of up to $250 per day of noncompliance, capped at $50,000, plus collection costs (Va. Code § 65.2-805; Virginia WCC Employer FAQ).
The law: Va. Code Title 65.2; §§ 65.2-101, 65.2-302, 65.2-805
State agency: Virginia Workers' Compensation Commission
Good to know: Virginia requires coverage at 3 employees, and your subcontractors' workers can count toward that if they do your kind of work. Penalties run up to $250 a day, capped at $50,000.

Sources: workcomp.virginia.gov · law.lis.virginia.gov

WashingtonOfficial source

Who must carry it: Employers with workers must get coverage from L&I's state fund or be certified self-insured; private comp insurance is not allowed. Workers can include people called independent contractors who don't pass the state's tests (6-part test, 7-part for construction) (RCW Title 51; Washington L&I).
Owners and officers: Exempt unless coverage is elected: sole proprietors and partners; members of member-managed LLCs who would qualify as sole proprietors or partners; managers of manager-managed LLCs and corporate officers who are directors and shareholders and exercise substantial control in daily management (a non-public corporation may exempt up to eight); exempt officers may be covered by election (RCW 51.12.020(5), (8), (13), 51.12.110).
Subcontractors: Whoever lets a contract is primarily and directly liable for premiums on the work; a registered or licensed contractor is not liable for a sub's premiums if the sub is registered/licensed, keeps separate books and location, and has an L&I account in good standing that the contractor verified within a year before contracting and annually after (RCW 51.12.070).
Homeowners: People hired to do gardening, maintenance or repair at the employer's own home are exempt (RCW 51.12.020(2)), as are domestic servants if fewer than two work 40+ hours a week (RCW 51.12.020(1)). RCW 51.12.070 contains no homeowner exception for premiums on contracted work.
Penalties: A business with workers who should have been reported is held responsible for unpaid premiums with penalties and interest (Washington L&I).
The law: RCW Title 51 (Industrial Insurance); RCW 51.12.020, 51.12.070
State agency: Washington State Department of Labor & Industries (L&I)
Good to know: Washington comp comes only from the state (L&I). Before hiring a sub, verify its L&I account is in good standing, or you can be billed for its unpaid premiums.

Sources: lni.wa.gov · lni.wa.gov · app.leg.wa.gov · app.leg.wa.gov

West VirginiaOfficial source

Who must carry it: All West Virginia employers that regularly employ others must carry coverage (W. Va. Code § 23-2-1(a); WV Offices of the Insurance Commissioner). Not required (but may elect): employers of domestic workers, agricultural employers with 5 or fewer full-time employees, and casual employers with no more than 3 employees working no more than 10 days a quarter (§ 23-2-1(b)). No separate construction threshold.
Owners and officers: Covered by default but may be excluded by the business: partners, sole proprietors, certain corporate officers and board members (officers with separate duties may still be covered), and up to four LLC managers, officers or members in total (W. Va. Code § 23-2-1(d)).
Subcontractors: A subcontractor's employee can file a claim against the prime contractor if the sub was uninsured and not self-insured and the prime contractor didn't get a certificate of coverage from the sub; getting the certificate generally relieves the prime contractor. Subs must give the prime a certificate covering the contract term and notify it within two business days of a lapse. If the Uninsured Employer Fund pays a sub's worker, the prime and sub are jointly liable unless the prime did due diligence on the sub's coverage (W. Va. Code § 23-2-1d).
Homeowners: Employers of domestic workers are not required to carry coverage (W. Va. Code § 23-2-1(b)(1)).
Penalties: The Insurance Commissioner's Employer Coverage Unit assesses fines and license revocations for noncompliant employers (WV OIC).
The law: W. Va. Code Ch. 23; §§ 23-2-1, 23-2-1d
State agency: West Virginia Offices of the Insurance Commissioner, Employer Coverage Unit
Good to know: West Virginia requires coverage for nearly all employers with regular employees. Get a certificate of coverage from every sub; if you don't and the sub is uninsured, its injured workers can claim against you.

Sources: wvinsurance.gov · code.wvlegislature.gov · code.wvlegislature.gov

WisconsinOfficial source

Who must carry it: Coverage is required once an employer has 3 or more full- or part-time employees (from the day the 3rd is hired), or has paid $500 or more in gross wages in any calendar quarter for work in Wisconsin (by the 10th day of the next quarter). Farmers: 6 or more employees on the same day for 20 days a year (Wis. Stat. § 102.04(1)(b); Wisconsin DWD).
Owners and officers: Sole proprietors, partners and LLC members are exempt but may elect coverage by endorsement. Corporate officers are employees; in a closely held corporation (10 or fewer stockholders), 1 or 2 officers may exclude themselves but still count toward the thresholds. A corporation with only 1 or 2 officers and no other employees may file a Notice of Corporate Officer Option instead of buying a policy (Wis. Stat. §§ 102.075, 102.076; DWD WKC-13324-P).
Subcontractors: Wisconsin's rule making an employer liable for an uninsured contractor's or sub's employees (Wis. Stat. § 102.06) is suspended while the Uninsured Employers Fund is accepting claims (DWD WKC-1-P). An injured independent contractor is treated as an employee unless all nine tests of § 102.07(8) are met, and no employer may claim coverage under another employer's or contractor's policy (Wisconsin DWD), so make sure every sub carries its own policy.
Homeowners: Household workers hired for general household services in a private home are excluded as domestic servants (Wis. Stat. § 102.07(4)(a)).
Penalties: Twice the unpaid premium for the uninsured period or $750, whichever is greater; a closure order requiring the employer to cease operations until insured; personal liability to reimburse the Uninsured Employers Fund for benefits paid; penalties are mandatory and non-negotiable (Wis. Stat. §§ 102.28(4), 102.82, 102.85; DWD WKC-13324-P).
The law: Wis. Stat. Ch. 102; §§ 102.04, 102.06, 102.07, 102.28, 102.85
State agency: Wisconsin Department of Workforce Development, Worker's Compensation Division
Good to know: Wisconsin requires coverage at 3 employees, or as soon as you pay $500 in wages in a quarter, so even one part-timer can trigger it. You can't rely on a contractor's policy to cover your own workers, and penalties are at least $750.

Sources: dwd.wisconsin.gov · dwd.wisconsin.gov · dwd.wisconsin.gov

WyomingSecondary source

Who must carry it: Employers in extra-hazardous industries must have coverage through the state fund (Department of Workforce Services) before work begins in Wyoming; industries are classed by NAICS code, and codes not listed as extra-hazardous are optional coverage (Wyoming DWS; Wyoming Legislative Service Office memo, June 2023). The statute lists construction (NAICS sector 23) and industry group 5617, services to buildings and dwellings, which includes landscaping services, as extra-hazardous (W.S. 27-14-108(a)(ii)(D), (M)); check your classification with DWS.
Owners and officers: Sole proprietors, partners, corporate officers and LLC members are not 'employees' unless coverage is elected (W.S. § 27-14-102(a)(vii), per ALFA International compendium).
Subcontractors: Not confirmed in an official source; confirm a sub's DWS coverage before work starts.
Penalties: No penalty amount published on an official source we could find. Ask the state agency.
The law: W.S. Title 27, Ch. 14 (Wyoming Worker's Compensation Act); §§ 27-14-102, 27-14-108
State agency: Wyoming Department of Workforce Services, Workers' Compensation Division
Good to know: Wyoming construction and landscaping businesses must buy coverage from the state fund before work starts; some other businesses can choose whether to cover. Owners, partners, officers and LLC members are excluded unless they elect coverage.

Sources: dws.wyo.gov · wyoleg.gov · law.justia.com · wyoleg.gov · alfainternational.com

If you're hiring a contractor

Workers’ comp is the contractor’s insurance, but it matters to you too. Many state comp laws keep homeowners out of the rules that make a hiring party pay for an uninsured crew; Colorado, Indiana and Missouri say so directly. That protection isn’t everywhere: Washington’s law makes whoever lets a contract responsible for its comp premiums with no homeowner exception, and California’s contractor board warns that a homeowner may be liable for medical bills if an uninsured worker is hurt on the property. Injury claims outside comp law are a separate question, so it’s worth asking your homeowner’s insurance agent what your policy covers. Before work starts:

Get a certificate of insurance that shows workers’ comp, with you listed as the certificate holder, then call the insurer or agent on it to confirm the policy is active for your job dates. In North Dakota, Ohio, Washington and (for construction and landscaping) Wyoming, the coverage comes from the state fund, so check with the state agency in your state’s entry.
If they say they’re exempt, ask for the proof. Some states issue a document, such as Montana’s Independent Contractor Exemption Certificate, a listing on Tennessee’s Exemption Registry or Arkansas’s Certificate of Non-Coverage. An owner’s exemption covers only the owner, not anyone working for them; the Arkansas and Tennessee entries say so.
Hiring excavation in Pennsylvania or Kentucky? Check twice. Both states’ comp statutes, as written, count anyone who contracts to have excavation, drilling or timber cutting done as a “contractor” under the rule that makes a contractor liable for an uninsured sub’s workers. Unlike the rest of that rule, this part isn’t limited to work in the hirer’s own line of business (both carve out some farmland: Kentucky for land used mainly for agriculture, Pennsylvania for timber removal by a farm owner or lessee who isn’t a covered employer). So a homeowner hiring excavation in either state should confirm the contractor is insured. See the Pennsylvania entry and its sources, including the Workers' Compensation Act, § 302(a), and KRS 342.610(2) for Kentucky.
Hiring a person directly, not a business, is different. Some states require you to cover a domestic worker past an hours threshold (16 hours a week in Massachusetts, 40 in New York), while Arkansas, Oregon and Washington exclude gardening and repair work at your own home.

Frequently Asked Questions

How many employees do you need before workers' comp is required?

In 34 states and D.C., one employee is enough for most businesses. The rest set a higher count: 3 employees in Arkansas, Georgia, Michigan, New Mexico, North Carolina, Virginia and Wisconsin; 4 employees in Florida and South Carolina; 5 employees in Alabama, Mississippi, Missouri and Tennessee. Michigan also requires it once one employee works 35 or more hours a week for 13 weeks in a 52-week span, and Wisconsin once you pay $500 or more in wages in any calendar quarter, even with one employee. Kansas goes by payroll (over $20,000 a year), Wyoming requires coverage only in extra-hazardous industries, and Texas lets most private employers opt out. Construction is stricter in Alabama, Arkansas, Florida, Missouri, New Mexico and Tennessee. Check your state’s entry for the details.

Do sole proprietors need workers' comp?

Usually not for themselves: in most states a sole proprietor with no employees doesn’t have to cover themselves, though many states let them opt in. Construction is where that changes in several states. Florida won’t exempt construction sole proprietors, Tennessee construction owners must cover themselves unless they’re on the state’s Exemption Registry, Colorado construction sole proprietors must carry coverage or file a rejection, and California requires concrete, HVAC, asbestos, roofing and tree service licensees to carry it now and every licensed contractor starting January 1, 2028. Once you hire an employee, your state’s threshold applies.

Which states make you buy workers' comp from a state fund?

North Dakota, Ohio and Washington don’t allow private workers’ comp insurance; you buy coverage from the state fund (Ohio and Washington also allow approved self-insurance). Wyoming requires state-fund coverage for extra-hazardous industries, which its statute lists by NAICS code and which include construction and the services-to-buildings group that covers landscaping (W.S. 27-14-108). Other industries are optional, so check your classification with the Department of Workforce Services. These 4 are often called monopolistic states.

Is a general contractor responsible for a subcontractor's workers' comp?

In many states, yes, if the sub isn’t insured: the law makes the contractor above it pay the sub’s injured workers or treats it as their employer. Collect the sub’s certificate of insurance before work starts; in North Carolina, South Carolina and West Virginia, having it generally relieves you. A few states work differently: Alabama has no statutory-employer provision, Texas has no general duty to insure subs, and Wisconsin’s rule is suspended while its Uninsured Employers Fund is accepting claims.

Can a homeowner be liable if a contractor's worker gets hurt?

It depends on the state, and comp law isn’t the only exposure. Many comp laws keep homeowners out of the rules that make a hiring party pay for an uninsured crew; Colorado, Indiana and Missouri say so directly. But Pennsylvania’s and Kentucky’s statutes, as written, count anyone who contracts to have excavation done as a “contractor” under those rules; Washington makes whoever lets a contract responsible for its comp premiums, with no homeowner exception in the statute; and California’s contractor board warns that a homeowner may be liable for medical bills if an uninsured worker is hurt on the property. Injury claims outside comp law are a separate question for your homeowner’s insurance agent. Ask for a certificate of insurance and confirm it with the insurer before work starts.

What happens if a business doesn't carry required workers' comp?

It depends on the state, but penalties can include stop-work orders, fines by the day or by the employee, penalties pegged to the premium you didn’t pay, paying an injured worker’s benefits yourself, being sued by the worker, and criminal charges. Florida’s stop-work order halts all business operations in the state. In Pennsylvania, failing to insure is a misdemeanor punishable by up to a $2,500 fine and a year in prison for each day, and a felony (up to $15,000 and seven years per day) if intentional. Each state’s entry lists the penalties and the source; we didn’t find a published amount for Alabama, Arkansas, Hawaii and Wyoming, so ask the agency there.

This guide is general information, not legal advice. Statutes change and courts read them in different ways. For a coverage question that matters, read the statute linked for your state and talk to your state’s workers’ comp agency, an insurance agent or a lawyer licensed there.

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Last checked November 1, 2026 against state statutes and agency pages. Entries marked “Secondary source” also rely for some points on a legal compendium, an unofficial statute copy, an older agency publication or a statute we couldn’t load. Rules change; your state’s workers’ comp agency has the final word. Spot something out of date? Email info@muthlerlandscaping.com and we’ll fix it.

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Cite as: Muthler Landscaping & Construction, “Workers’ Comp Requirements by State: Who Needs It and Who’s Exempt,” https://muthlerlandscaping.com/state-guides/workers-comp-requirements/ (last checked November 1, 2026).

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