How can I tell if my small business is exempt from state compensation laws?

  • Each state has its own laws and regulations that control the workers compensation program in their state, and these laws vary from state to state.  In most cases, if you are an employer with at least one employee, you are required to carry workers compensation insurance, however, some states allow certain, smaller companies an exemption to their workers comp laws.  Unfortunately, these exemptions also vary from state to state making it difficult to determine if you qualify or not.  Small business owners that conduct business across different states may find the task particularly daunting.  For examples in one state, you might be exempt if you have only 3 employees, while, in others you may be exempt if you have 5 employees.

    So, how can you determine the best course of action?  The easiest way is to simply pick up the phone to call your friendly advisor at the Workers Comp Co-Op.  We are always eager and willing to answer any question you might have – even if you aren’t a current client!

    Remember, even if your state considers your business exempt, it may still be in your best interest to participate in a workers compensation program.  If your participation is NOT state mandated, you can still participate voluntarily. Contact WCCOP to learn more today!

    Here is a list of the general state requirements:

    State

    Employers Subject to Workers Compensation Laws

    AK

    All employers with one or more employees

    AL

    All employers with five or more employees

    AR

    All employers with three or more employees, except for employers engaged in repair work (two or more), contractors who subcontract part of their work (one or more), and subcontractors (one or more)

    AZ

    All employers, including sole proprietors

    CA

    All employers and employees

    CO

    All employers with one or more employees

    CT

    All employers and employees

    DC

    All employers and employees

    DE

    All employers and employees

    FL

    All employers with four or more employees (one or more employees, for construction businesses)

    GA

    All employers with three or more employees

    HI

    All employers with one or more employees

    IA

    All employers and employees, including proprietors and partners who elect to be covered

    ID

    All employers and employees

    IL

    All employers and employees

    IN

    All employers and employees

    KS

    All employers and employees except employers whose payroll for the preceding year was less than $20,000

    KY

    All employers with one or more employees

    LA

    All employers with one or more employees

    MA

    All employers with one or more employees.

    MD

    All employers with one or more employees

    ME

    All employers and employees

    MI

    All employers with three or more employees

    MN

    All employers and employees

    MO

    All employers with five or more employees OR construction employers with one or more

    MS

    All employers with five or more employees

    MT

    All employers and employees

    NC

    All employers with three or more employees and all employment that exposes employees to radiation

    ND

    All employers and employees

    NE

    All employers with one or more employees

    NH

    All employers with one or more employees.

     

     

    NM

    All employers with three or more employees OR one or more employees for state-licensed construction businesses

    NV

    All employers and employees

    NY

    All employers with one or more employees

    OH

    All employers with one or more employees;

    OK

    All employers and employees

    OR

    All employers with one or more employees

    PA

    All employers and employees

    PR

    All employers and employees

    RI

    Employers with one or more employees

    SC

    All employers with four or more employees

    SD

    All employers and employees

    TN

    All employers with five or more employees  OR one or more employees for employers that mine or produce coal.

    TX

     

    UT

    All employers with one or more employees

    VA

    All employers with three or more employees

    VT

    All employers and employees

    WA

    All employers and employees are subject to workers’ compensation laws. 

    WI

    Employers who pay wages of $500 or more in a calendar quarter

    WV

    All employers with one or more employees

    WY

    All employers and employees
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