Is workers' compensation insurance required for my business?
Yes, almost everywhere. 49 states and the District of Columbia require most employers to carry workers' compensation insurance, and Texas leaves it optional for most private employers. Thresholds start at the first employee in most states and at three to five in a few; owners and officers can usually exempt themselves; four states (North Dakota, Ohio, Washington, Wyoming) sell coverage only through a state fund. Pick your state for its rule, its penalty, and who enforces it.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
What each state requires, in one table
The threshold that triggers the requirement, who sets the rates, and what an uninsured employer faces. Each row links to a state page that names the statute behind every cell.
| State | Employee threshold | Rating bureau or state fund | Penalty for going without | Page |
|---|---|---|---|---|
| Alabama | 5 or more employees; 1+ in new home building | NCCI | Misdemeanor, $100 to $1,000 fine; 2x benefits owed | AL page → |
| Alaska | 1 or more employees | NCCI | Up to $1,000 per employee per day; stop order | AK page → |
| Arizona | 1 or more employees; domestic servants excepted | NCCI | Up to $1,000; $5,000 and $10,000 on repeats | AZ page → |
| Arkansas | 3 employees; 2 in building work; 1 if you subcontract | NCCI | Up to $10,000 or $1,000 a day; Class D felony | AR page → |
| California | 1 or more employees | Independent bureau (WCIRB) | Stop order; 2x premium or $1,500 per employee | CA page → |
| Colorado | 1 or more employees, part-time and family included | NCCI; competitive state fund | Up to $500 a day; cease-and-desist order | CO page → |
| Connecticut | 1 or more employees | NCCI | Up to $50,000 civil penalty; class D felony if willful | CT page → |
| Delaware | 1 or more employees | Independent bureau (DCRB) | 3x a year's premium; $250+ a day after notice | DE page → |
| District of Columbia | 1 or more employees; domestic workers at 240 hrs/quarter | NCCI | $1,000 to $10,000 civil fine; officers personally liable | DC page → |
| Florida | 4 or more employees; 1 or more in construction | NCCI | 2x premium or $1,000; stop-work order | FL page → |
| Georgia | 3 or more regular employees, officers counted | NCCI | $500 to $5,000 per violation; misdemeanor | GA page → |
| Hawaii | 1 or more employees, full- or part-time | NCCI | $500 minimum or $100 per employee per day | HI page → |
| Idaho | 1 or more employees, part-time and seasonal included | NCCI; competitive state fund | $25/day or $2/employee/day; misdemeanor | ID page → |
| Illinois | 1 or more employees, including part-time | NCCI | Up to $500/day, $10,000 minimum; stop-work; felony | IL page → |
| Indiana | 1 or more employees | Independent bureau (ICRB) | Class A misdemeanor; up to 2x benefits owed | IN page → |
| Iowa | 1 or more employees | NCCI | Class D felony if willful; injunction; employee suit | IA page → |
| Kansas | Payroll over $20,000 a year; family wages excluded | NCCI | Greater of $25,000 or 2x premium; class A misdemeanor | KS page → |
| Kentucky | 1 or more employees; agriculture exempt | NCCI; competitive state fund | $100 to $1,000 per employee per day; up to 180 days jail | KY page → |
| Louisiana | 1 or more employees, part-time included | NCCI; competitive state fund | Up to $250 per employee, $10,000 cap; crime if willful | LA page → |
| Maine | 1 or more employees | NCCI; competitive state fund | Up to $10,000 or 108% of premium; Class D crime if knowing | ME page → |
| Maryland | 1 or more employees; no minimum head count | NCCI; competitive state fund | Up to $25,000 Commission penalty; misdemeanor | MD page → |
| Massachusetts | 1 or more employees, any hours | Independent bureau (WCRIBMA) | Stop work order, $100/day; up to $1,500 and 1 year | MA page → |
| Michigan | 3 at one time, or 1 working 35+ hours for 13 weeks | Independent bureau (CAOM) | Misdemeanor; civil fine up to $1,000 per day | MI page → |
| Minnesota | 1 or more employees | Independent bureau (MWCIA) | Up to $1,000 per employee per week; gross misdemeanor | MN page → |
| Mississippi | 5 or more regular employees | NCCI | Civil penalty up to $10,000; misdemeanor | MS page → |
| Missouri | 5 or more employees; 1 or more in construction | NCCI | Up to 3x annual premium or $50,000; class A misdemeanor | MO page → |
| Montana | 1 or more employees, part-time and seasonal included | NCCI; competitive state fund | Up to 2x premium, $200 minimum; cease-operations order | MT page → |
| Nebraska | 1 or more employees; farm and household exemptions | NCCI | Up to $1,000 a day if willful; Class I misdemeanor | NE page → |
| Nevada | 1 or more employees | NCCI | Back premiums + fine up to $15,000; misdemeanor | NV page → |
| New Hampshire | 1 or more employees | NCCI | Up to $2,500 plus $100/employee/day; class B felony | NH page → |
| New Jersey | 1 or more employees; corporate officers count | Independent bureau (NJCRIB) | Up to $5,000 per 10 days; stop-work order; criminal charge | NJ page → |
| New Mexico | 3 or more employees; 1 or more in construction | NCCI | $25 to $1,000 per violation; court can halt business | NM page → |
| New York | 1 or more employees, incl. part-time and family | Independent bureau (NYCIRB) | Up to $2,000 per 10 days uninsured; misdemeanor or felony | NY page → |
| North Carolina | 3 or more employees; 1 if the work involves radiation | Independent bureau (NCRB) | $20 to $100 a day; misdemeanor or Class H felony | NC page → |
| North Dakota | 1 or more employees, incl. part-time | Monopolistic state fund (North Dakota WSI) | Back premium, claim costs; $10,000 on a C&D order | ND page → |
| Ohio | 1 or more employees | Monopolistic state fund (Ohio BWC) | Back premium plus claim costs; fraud charge if intentional | OH page → |
| Oklahoma | 1 or more employees | NCCI | Up to $1,000/day civil fine; misdemeanor to $10,000 | OK page → |
| Oregon | 1 or more subject workers | NCCI; competitive state fund | 2x premium, $1,000 minimum; up to $250/day after | OR page → |
| Pennsylvania | 1 or more employees, part-time and family included | Independent bureau (PCRB) | 3rd-degree misdemeanor per day; felony if intentional | PA page → |
| Rhode Island | 1 or more employees | NCCI; competitive state fund | Up to $1,000 a day; felony up to 2 years; stop-work order | RI page → |
| South Carolina | 4 or more employees, part-time and family count | NCCI | $10 to $100 per day; willful refusal a misdemeanor | SC page → |
| South Dakota | Not required; uninsured employers can be sued | NCCI | No fine; worker may sue or claim double benefits | SD page → |
| Tennessee | 5 employees; 1 in construction and coal mining | NCCI | 1.5x the avoided premium; up to 3x for repeat violations | TN page → |
| Texas | Elective for private employers; required for public | NCCI; competitive state fund | No opt-out fine; lost defenses; notice fines to $25k/day | TX page → |
| Utah | 1 or more employees | NCCI | $1,000 minimum or 3x premium; class B misdemeanor | UT page → |
| Vermont | 1 or more employees | NCCI | Up to $100/day, then $150/day; stop-work order | VT page → |
| Virginia | 3 or more employees, officers and subs' staff counted | NCCI | Up to $250/day, $50,000 max; Class 2 misdemeanor | VA page → |
| Washington | 1 or more workers; owners exempt | Monopolistic state fund (Washington L&I) | Up to $1,000 or 2x premium; gross misdemeanor | WA page → |
| West Virginia | 1 or more employees | NCCI | Up to $10,000 fine, UEF claim costs, shutdown order | WV page → |
| Wisconsin | 3 or more employees, or $500 wages in a quarter | Independent bureau (WCRB) | 2x unpaid premium or $750 minimum; closure order | WI page → |
| Wyoming | 1+ employee in extra-hazardous work; else optional | Monopolistic state fund (Wyoming Workers' Compensation Division) | Claim costs owed to state; misdemeanor, felony if repeated | WY page → |
Rows fill in as each state's page is published. Cells are summaries; the state page carries the full rule, the exemptions, and the filing, each with its source and check date.
The nine questions buyers ask
Each page answers its question in the first paragraph, then the follow-ups, then the sources.
Am I required to carry it?
What does it cost me?
Which market, which state?
Where the hub's claims come from
Each state page cites its own statute and agency for every fact. The hub's general statements rest on these.
Workers’ compensation FAQ
Is workers' compensation insurance required in every state?+
Every state except Texas requires most employers to carry it, and the District of Columbia does too. Texas leaves it optional for most private employers. The threshold, the exemptions, and the penalty are set state by state, which is why this guide has a page for each one.
Do I need workers' comp if I am the only person in the business?+
Usually not for yourself: most states let a sole proprietor, partner, LLC member, or corporate officer stay outside the policy. A general contractor, client, or license board may still ask for proof, which is either a state exemption filing or a minimum-premium ghost policy that produces a certificate.
Do 1099 workers count as employees for workers' comp?+
The tax form does not decide it. Each state applies its own independent contractor test, and a worker who fails it is your employee for workers' comp however they are paid. Many states also make a hiring contractor answer for an uninsured subcontractor's workers.
What happens if I go without workers' comp?+
The state agency can fine the business, often per day or as a multiple of the premium it should have paid, order it to stop operating, and in some states charge a crime. An injured worker can also sue the business directly, without the usual defenses. Each state page gives that state's penalty from its statute.
Bring the requirement, not the guesswork
Text Redoubt what the business does, who works in it, which state the work is in, and what the hiring party asked for. We will say whether a policy, a waiver, or an exclusion fits, and what to send back.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.