Workers comp requirements by state

How states set the rule

Every state decides for itself when a business must carry workers' comp. Most require it once you hire your first employee. Others start at three, four, or five employees, or at a payroll amount. Many have a lower threshold for construction. The rule that applies is usually the rule of the state where the employee works, not where your business is registered.

The list below shows the general rule for each state. Exceptions apply, so open the state guide and confirm with the state agency before you decide you do not need coverage.

States with a state-run fund only

In North Dakota, Ohio, Washington, and Wyoming, private insurers cannot sell regular workers' comp policies. Employers buy coverage from the state fund, or qualify to self-insure. These policies may not include employer's liability coverage, so many employers buy separate "stop gap" coverage from a private insurer.

Texas: coverage is optional

Most private employers in Texas can choose not to carry workers' comp. These employers are called nonsubscribers. They must post a notice in English and Spanish, give written notice to new hires, and file a notice with the state each year. They also lose important legal protections if an injured worker sues. Read our Texas guide before you decide.

The general rule in each state

This is the starting point only. Owners, farm workers, household workers, and some industries often have different rules.

• Alabama: Generally 5+ employees; special residential construction rules.
• Alaska: Generally required with 1+ employees.
• Arizona: Generally required with 1+ employees.
• Arkansas: Generally 3+ employees; some smaller employers also need coverage.
• California: Generally required with one or more employees.
• Colorado: Generally required with 1+ employees, including part-time and family workers.
• Connecticut: Generally required for employers with employees; limited exceptions.
• Delaware: Generally required with 1+ employees.
• District of Columbia: Generally 1+ employees; domestic workers have a 240-hour quarterly rule.
• Florida: Construction: 1+ employees · Other industries: generally 4+.
• Georgia: Generally 3+ regularly employed workers, including part-time workers.
• Hawaii: Generally required with 1+ full-time, part-time, permanent, or temporary employees.
• Idaho: Generally required before hiring the first employee.
• Illinois: Generally required with 1+ employees, even part-time.
• Indiana: Generally required if you have employees.
• Iowa: Generally required; some exceptions for certain workers and farms.
• Kansas: Generally required when yearly payroll is over $20,000; some exceptions.
• Kentucky: Generally required with 1+ employees.
• Louisiana: Generally required with 1+ employees; few exceptions.
• Maine: Required for almost all public and private employers.
• Maryland: Generally required if you have employees.
• Massachusetts: Generally required for all employers with employees.
• Michigan: Generally 3+ employees, or 1 employee who works 35+ hours a week for 13 weeks.
• Minnesota: Generally required even with 1 part-time employee.
• Mississippi: Generally 5+ regular employees.
• Missouri: Generally 5+ employees; construction employers generally 1+.
• Montana: Generally required for employees covered by Montana law.
• Nebraska: Generally required if you have employees.
• Nevada: Generally required with one or more employees, unless exempt.
• New Hampshire: Generally required before you hire an employee.
• New Jersey: Generally required for most employers; rules differ by business type.
• New Mexico: Generally 3+ workers; licensed construction employers always need coverage.
• New York: Generally required for most employers with employees.
• North Carolina: Generally 3+ employees; some businesses need coverage with fewer.
• North Dakota: Generally required before your first employee starts; coverage only through WSI.
• Ohio: Generally required with 1+ employees; through BWC or approved self-insurance.
• Oklahoma: Generally required; some exceptions set by law.
• Oregon: Generally required with 1+ covered workers.
• Pennsylvania: Generally required with 1+ employees; every worker must be excluded to skip coverage.
• Rhode Island: Generally required with 1+ employees; few exceptions.
• South Carolina: Generally 4+ regular employees; some exceptions set by law.
• South Dakota: Coverage is generally optional; going without it means you can be sued.
• Tennessee: Generally 5+ employees; construction generally 1+.
• Texas: Optional for most private employers; exceptions apply.
• Utah: Generally required if you have employees; some exceptions.
• Vermont: Generally required with 1+ full-time or part-time employees.
• Virginia: Generally required with 3+ regular employees.
• Washington: Generally required for covered workers; through L&I or approved self-insurance.
• West Virginia: Generally required with 1+ employees; few exceptions.
• Wisconsin: Generally 3+ employees, or 1+ employees and $500 in wages in a quarter.
• Wyoming: Required for certain high-risk industries; other employers can choose coverage.

Workers who count

In most states, part-time, seasonal, and temporary workers count toward the threshold. Family members often count too. A worker you pay on a 1099 may still count as your employee under state law. Owners may or may not count, depending on the state and your business type.

Where to check

The U.S. Department of Labor keeps a list of every state's workers' comp agency, with links. Each of our state guides also lists that state's official sources, reporting deadlines, and penalties for going without coverage.