Does Pennsylvania require workers’ compensation insurance?
Yes. Pennsylvania requires workers' compensation from the first employee: the Department of Labor & Industry says coverage is mandatory for any employer with at least one employee, part-time workers and family members included. Sole proprietors and general partners are not their own employees. Corporate officers are covered by default unless an S-corporation owner, a C-corporation owner of 5% or more, or an unpaid nonprofit officer files the executive officer exclusion.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Pennsylvania requires workers' comp?
Pennsylvania has no head-count floor. The Bureau of Workers' Compensation says insurance is mandatory for any employer with at least one employee who could be hurt or become ill from work in the state, part-time workers and family members included. The only way out is for every worker to fall in an excluded group, such as casual workers outside the regular course of the business, domestic workers the employer has not elected to cover, small-scale agricultural labor, and commission-only real estate and insurance agents.
Work outside the state can count too. The same compliance page extends the requirement to an employee hurt outside Pennsylvania when the job is principally localized in Pennsylvania, or when the contract of hire was made here and no other state's law applies.
Source: PA L&I, Workers' Compensation Compliance, checked .
Which owners, officers, and family members are exempt in Pennsylvania?
Every executive officer of a corporation is an employee under Section 104 of the Workers' Compensation Act, but three kinds may elect out: an officer of an S corporation who owns part of it, an officer of a C corporation who owns at least 5%, and a nonprofit officer who serves without pay. Sole proprietors and general partners are not employees of their own business. Section 451 lets insurers, including the State Workers' Insurance Fund, cover sole proprietors, partners, and LLC members on a voluntary basis.
Construction has its own contractor test. Under Section 3 of the Construction Workplace Misclassification Act (Act 72 of 2010), a construction worker is an independent contractor only with a written contract, freedom from the hiring firm's control, and an independent business that, among other criteria, carries at least $50,000 of liability insurance. Anyone who misses the test is an employee for workers' comp.
Source: Pennsylvania Workers' Compensation Act §§ 104 and 451, checked .
What happens to a Pennsylvania employer with no workers' comp?
Going without coverage is a crime in Pennsylvania. Under Section 305(b) of the Workers' Compensation Act, an uninsured employer is guilty of a third-degree misdemeanor, or a third-degree felony if the court finds the failure intentional, and every day uninsured is a separate offense. The court can add restitution to an injured worker with an award, and under Section 305(d) the worker can sue the employer for damages instead of claiming benefits. The Department of Labor & Industry investigates and prosecutes.
The fines come from the Crimes Code: 18 Pa.C.S. § 1101 caps a third-degree misdemeanor fine at $2,500 and a third-degree felony fine at $15,000, per conviction, and each uninsured day can be charged separately.
Source: Pennsylvania Workers' Compensation Act § 305, checked .
Who enforces workers' comp in Pennsylvania?
The Department of Labor & Industry's Bureau of Workers' Compensation administers the Act. Its Compliance Section takes reports of uninsured employers, sends employers certificate-of-insurance requests, and receives the religious exemption filings and the officer exclusion filings of businesses with no other employees; it can be reached at 717-787-3567. Under Section 305(b) of the Act, the Department investigates violations and brings prosecutions.
Source: PA L&I, Bureau of Workers' Compensation, checked .
Where do Pennsylvania employers buy coverage?
Pennsylvania has a private market and a competitive state fund. An employer can buy a policy from any insurer licensed in Pennsylvania, from the State Workers' Insurance Fund (SWIF), which the Department of Labor & Industry runs as an enterprise fund, or get the Department's approval to self-insure. SWIF also serves employers that private carriers turn down. SWIF coverage starts the day after it receives a completed application with the premium payment.
Source: PA L&I, State Workers' Insurance Fund, checked .
Who sets the class codes and rates in Pennsylvania?
Pennsylvania is not an NCCI state. The Pennsylvania Compensation Rating Bureau (PCRB), founded in 1915 and based in Philadelphia, publishes the classifications, rating values, and policy rules Pennsylvania carriers use, and every insurer that writes Pennsylvania workers' compensation must be a PCRB member. Pennsylvania class codes and experience mods come from PCRB, not NCCI.
Source: Pennsylvania Compensation Rating Bureau, About Us, checked .
Is there an exemption or waiver form in Pennsylvania?
Yes, for corporate officers and for religious objectors, but there is no general no-employee waiver. To exclude an eligible officer, file the Application for Executive Officer Exception (LIBC-509) with an Executive Officer's Declaration (LIBC-513) for each officer: with the carrier if the business has a policy for other employees, or with the Bureau's Compliance Section if it has none. An employer with members of a religious sect that opposes insurance benefits files LIBC-14A with each worker's signed waiver.
A contractor with no employees signs a different document. Under Section 302(e) of the Act, a municipality issues a building permit only on proof of workers' comp insurance or an affidavit that the contractor employs no one, and a permit issued on the affidavit bars the contractor from employing anyone on the job. Check the current forms with the Bureau before filing.
Source: PA L&I, Workers' Compensation Compliance, checked .
Sorting out Pennsylvania workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Pennsylvania requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
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- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
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- Massachusetts
- Michigan
- Minnesota
- Mississippi
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- New Hampshire
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- New Mexico
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- Ohio
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- Pennsylvania
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- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
The hub, and the Pennsylvania pages that go deeper
Pennsylvania workers’ comp FAQ
Do I need workers' comp in Pennsylvania with one part-time employee?+
Yes. The Department of Labor & Industry says coverage is mandatory once a business has at least one employee, even one working limited part-time hours or a family member such as a spouse or child. Only workers in the Act's excluded groups, such as casual or unelected domestic workers, fall outside it.
Can a Pennsylvania corporate officer opt out of workers' comp?+
Some can. Under Section 104 of the Act, an S-corporation officer with an ownership interest, a C-corporation officer owning at least 5%, or an unpaid nonprofit officer may elect out by filing LIBC-509 and LIBC-513, with the carrier or, if the business has no other employees, with the Bureau's Compliance Section.
Is my 1099 subcontractor my employee for Pennsylvania workers' comp?+
In construction, only if they fail Act 72's test: a written contract, freedom from your control, and an independent business carrying at least $50,000 of liability insurance, among other criteria. Separately, Section 302 of the Act makes a contractor liable for an uninsured subcontractor's employees and bars subcontracting without proof of the sub's insurance.