Does Vermont require workers’ compensation insurance?
Yes. Vermont requires workers' compensation from the first employee: 21 V.S.A. 687 makes every private employer secure coverage for its employees, with no minimum head count. The carve-outs are narrow: casual work outside the business, farm employers with under $10,000 in yearly payroll, household service, and family members living in the employer's home. Up to four corporate officers or LLC members can be excluded, but only with the Commissioner of Labor's approval on Form 29.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Vermont requires workers' comp?
Vermont has no minimum head count. Under 21 V.S.A. 687, every employer other than the state, counties, and municipalities must insure its employees or qualify to self-insure. Section 601(14) leaves out casual work outside the employer's trade, farm work for an employer with under $10,000 in payroll a calendar year, service in a private home, and family members living in the employer's house.
Hiring subcontractors does not get a Vermont business out of the requirement. The Department of Labor's coverage page says employers are liable for anyone they employ, including independent contractors and subcontractors, and 601(3) counts the owner or operator of the business carried on at a site as the employer of the workers there, even when an independent contractor hired them.
Source: 21 V.S.A. 687, checked .
Which owners, officers, and family members are exempt in Vermont?
A corporation or LLC can exclude up to four executive officers, managers, or members, but only with the Commissioner of Labor's approval (21 V.S.A. 601(14)(H)). If every officer or member is excluded and the business has no employees, it does not have to buy a policy. A sole proprietor or partner of an unincorporated business is not a hiring party's employee only if all six tests in 601(14)(F) are met, including a written contract saying they work independently and chose not to buy coverage.
Form 29 limits "corporate officer" to the president, vice president, secretary, clerk, or treasurer. An excluded officer who is later hurt can still file a claim, but the business then has every defense available in a personal injury suit.
Source: 21 V.S.A. 601(14), checked .
What happens to a Vermont employer with no workers' comp?
After a hearing, the Commissioner of Labor can assess an uninsured employer up to $100 a day for the first seven days and up to $150 a day after that (21 V.S.A. 692(a)). The Commissioner also orders work stopped until coverage is in place, can add up to $250 a day plus $250 per employee per day, and can bar the employer from state contracts for up to three years. Breaking the stop-work order costs up to $5,000, then $10,000, or a criminal fine up to $10,000 and 180 days in jail.
An injured worker of an uninsured employer can choose a civil suit instead of a claim, and the employer cannot argue fellow-employee negligence or assumption of risk (21 V.S.A. 618(b)). Corporate officers and majority stockholders, or partners, are personally liable for the benefits owed (21 V.S.A. 687(b)).
Source: 21 V.S.A. 692, checked .
Who enforces workers' comp in Vermont?
The Vermont Department of Labor's Workers' Compensation Division enforces the requirement. It runs the public coverage lookup, investigates uninsured employers and misclassified workers, and can close a business until it is insured. The Department of Financial Regulation regulates carriers and rates, not employers.
Source: Vermont Department of Labor, Does My Employer Have Coverage?, checked .
Where do Vermont employers buy coverage?
Vermont is a private-market state with no state fund. An employer insures with any carrier or reciprocal exchange authorized to write workers' compensation in Vermont, or meets the Commissioner's financial requirements to self-insure, alone or through an approved self-insurance group (21 V.S.A. 687(a)). Employers no voluntary carrier will write are placed in the assigned risk market, whose rates the Department of Financial Regulation publishes each year.
Source: 21 V.S.A. 687(a), checked .
Who sets the class codes and rates in Vermont?
Vermont is an NCCI state. The Department of Financial Regulation posts the advisory loss costs and assigned risk rates each year and notes they are NCCI's products; class codes and experience mods come from NCCI, and each carrier files its own loss cost multiplier on top.
Source: Vermont DFR, Workers' Compensation, checked .
Is there an exemption or waiver form in Vermont?
Yes, for corporations and LLCs. Form 29, the Application for Exclusion from the Workers' Compensation Act, is filed with the Department of Labor, one per officer or member, with notarized board minutes (corporation) or a notarized member affidavit (LLC). It takes effect no earlier than the day the Department receives a complete application, and an approved exclusion stays in force until you ask to rescind it. Sole proprietors and partners have no state form; the written contract in 601(14)(F) does that job.
Source: Vermont Department of Labor, Workers' Comp Forms, checked .
Sorting out Vermont workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Vermont 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.
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The hub, and the Vermont pages that go deeper
Vermont workers’ comp FAQ
Do I need workers' comp in Vermont with one part-time employee?+
Yes, in most cases. 21 V.S.A. 687 has no head-count or hours floor, so one part-time employee triggers the requirement unless a 601(14) carve-out, such as a small farm or household service, applies.
Can a Vermont LLC member skip workers' comp?+
Yes, with approval. An LLC can exclude up to four managers or members by filing Form 29 with a notarized member affidavit, and if every member is excluded and there are no employees, no policy is required. Until the Commissioner of Labor approves the form, the member is not excluded.
Does a Vermont sole proprietor need workers' comp?+
Not on themselves, if they have no employees. When they work for a contractor, the contractor avoids covering them only if all six tests in 21 V.S.A. 601(14)(F) are met, including the written contract.
What if my Vermont subcontractor has no workers' comp?+
Their workers can become yours under 21 V.S.A. 601(3), and that pay can land on your policy at audit. Ask every sub for a certificate before they start.