Workers’ Compensation provides significant protection for employers and employees in the case of a workplace injury. In most states, workers’ compensation is a stringent requirement. However, some states may make exceptions for certain occupations. As occupational norms vary in different regional areas of the country, it is up to each state to set its own guidelines, rules, and procedures for workers’ compensation.
Currently, only one state permits workers’ compensation insurance to be optional, the Lone Star state of Texas. Although, state officials do mandate coverage for any business working with government entities. Despite the exception of Texas, more than half of U.S. states require workers’ compensation insurance coverage even for just one employee. Meanwhile, while mandating most businesses to have coverage, states such as Montana, Nebraska, and North Dakota do have broader exceptions than most other states.
Exceptions to workers’ compensation coverage exist in every state and are more common for specific occupations. These common exceptions include farm workers, domestic workers, casual workers, and commission-based real estate workers. Exceptions can even be granted for those working in the public sector, such as police officers or municipal workers. Although, this is generally because those organizations are already self-insured.
Requiring workers’ compensation insurance is a consistent theme across the states, with different approaches to setup and qualifications for each entity. Check below to ensure that you are updated with your respective state’s workers’ compensation insurance policies.
U.S. STATES:
Alabama – Yes, every business with five or more employees must have workers’ compensation insurance. Exceptions to coverage potentially include licensed real estate brokers, farm workers, casual employees, and those working in businesses with less than five employees.
Alaska – Yes, any business with one employee must have workers’ compensation insurance. Domestic servants, agricultural workers, contract-based entertainers and certain fishermen are seen as potential exclusions to coverage,
Arizona – Yes, every business with employees must obtain workers’ compensation insurance. Casual workers (work when needed) and domestic servants are usually regarded as an exclusion to coverage.
Arkansas – Yes, businesses with three or more employees are required to acquire workers’ compensation insurance. Potential exceptions to coverage include railroad, agriculture, non-profit, and domestic workers.
California – Yes, businesses with even one part-time employee must have workers’ compensation insurance. Exceptions to coverage are more limited, however, potential examples include domestic workers employed directly by a family, sheriffs, and deputy clerks.
Colorado – Yes, every business with one or more employees must have workers’ compensation insurance. Potential exceptions to coverage include commission based real estate agents/brokers and railroad employees not covered under federal law.
Connecticut – Yes, every business with one or more employees must obtain workers’ compensation insurance. Potential exceptions to coverage include certain part-time workers and casual workers.
Delaware – Yes, every business with one or more employees must obtain workers’ compensation insurance. Potential exceptions to coverage include domestic, agricultural, and certain part-time workers.
Washington, District of Columbia (D.C.) – Yes, every business with employees must have coverage. Potential exclusions to coverage can include employees of sub-contractors.
Florida – Yes, every business with four employees or more must have workers’ compensation insurance. Potential exceptions to coverage include musicians and theatrical workers, licensed real estate brokers, and certain sports officials.
Georgia – Yes, every business with three employees or more must obtain workers’ compensation insurance. Potential exceptions to coverage include farm and domestic workers as well as licensed real estate agents/brokers.
Hawaii – Yes, every business must obtain workers’ compensation even for part-time workers. Potential exceptions to coverage include domestic workers.
Idaho – Yes, every business with one or more employees must obtain coverage. Potential exceptions to coverage include employees who work offsite of the employer’s premise, farm workers, domestic workers and those working in real estate.
Illinois – Yes, every business with employees must have coverage. Potential exceptions to coverage include real estate brokers and farmers.
Indiana – Yes, every business with employees must have coverage. Potential exceptions to coverage include casual laborers, real estate agents, railroad workers, agricultural employees, and reserve police officers.
Iowa – Yes, every business with employees must have coverage. Potential exceptions to coverage include employees making $1,500 or less annually and workers related to business owner.
Kansas – Yes, every business with employees must have coverage. Potential exceptions to coverage include businesses with payrolls of $20,000 or less, certain agricultural workers, and firefighters belonging to a relief association that already waived coverage.
Kentucky – Yes, every business with one or more employees must have coverage. Potential exceptions to coverage include domestic servants who work under 40 hours a week, employees of religious organizations and farm workers.
Louisiana – Yes, every business with one or more employees must have coverage. Potential exceptions to coverage include entertainers, real estate salespeople, and certain domestic workers.
Maine – Yes, every business with employees must have coverage. Potential exceptions to coverage include agriculture/aquaculture employers with seasonal workers (granted the business holds coverage of at least $25,000 in employer liability insurance and $5,000 in medical payment coverage) and domestic workers.
Maryland - Yes, every business with one or more employees must have coverage. Potential exceptions to coverage include certain farm workers.
Massachusetts - Yes, every business with one or more employees must have coverage. Potential exceptions to coverage include professional athletes, workers on vessels engaged in international trade, and commission-based employees.
Michigan – Yes, every business with three or more employees must have coverage. Potential exceptions to coverage include certain small businesses, agricultural workers and domestic workers.
Minnesota – Yes, every business must have coverage. Potential exceptions to coverage include casual, domestic and farm workers.
Mississippi - Yes, every business with five or more employees must have coverage. Potential exceptions to coverage include non-profit workers, domestic workers and farm workers.
Missouri – Yes, every business with five or more employees must have coverage. Potential exceptions to coverage include real estate agents, family chauffeurs and farm workers.
Montana – Most business must obtain coverage but there are more exceptions than most states. Potential exceptions to coverage include cosmetologists, barbers, newspaper carriers, reservation employees, and petroleum workers.
Nebraska – Yes, most businesses must have coverage. Potential exceptions to coverage include domestic and agricultural workers.
Nevada – Yes, every business with employees must have coverage. Potential exceptions to coverage include entertainers, professional sports referees, clergy members, commission-based salespeople.
New Hampshire - Yes, every business with employees must have coverage. Potential exceptions to coverage include real estate salespeople and appraisers.
New Jersey – Yes, every business with employees must have coverage. Potential exceptions to coverage include casual or domestic workers.
New Mexico – Yes, every business with three or more employees must have coverage. Potential exceptions to coverage include casual, domestic, and certain part-time agricultural workers.
New York – Yes, every business must have coverage. Potential exceptions to coverage include certain non-profit worker, domestic workers working under 40 hours a week and municipal employees not engaged in hazardous work.
North Carolina – Yes, every business in the state with three or more employees must have coverage. Potential exceptions to coverage include farm, casual or domestic workers.
North Dakota –Most businesses must obtain coverage. Although exceptions in the state are more broad than other states. Potential exceptions to coverage include farm/ranch labor, newspaper delivery workers, farm operators, employees of places of worship, as well as domestic workers.
Ohio – Yes, every business with three or more employees must have coverage. Potential exceptions to coverage include certain personnel on family farms and domestic workers.
Oklahoma – Yes, every business with employees must have coverage. Potential exceptions to coverage include horticulture workers not using machines, employers with less than five employees if related biologically or by marriage, certain tractor trailer operators.
Oregon – Yes, every business with employees must have coverage. Potential exceptions to coverage include casual workers and those earning less than $500 annually from an employer.
Pennsylvania – Yes, every business with employees must have coverage. Potential exceptions to coverage include casual workers, agricultural workers who work less than 30 days or for less than $1,200 per year from a single employer.
Rhode Island – Yes, every business with employees must have coverage. Potential exceptions to coverage include domestic, casual workers as well as commission based real estate salespeople/brokers.
South Carolina – Yes, every business with four or more employees must have coverage. Potential exceptions to coverage include employers with less than $3,000 in payroll annually, farm workers and real estate agents.
South Dakota – Yes, every business with employees must have coverage. Potential exceptions to coverage include domestic servants working less than 20 hours per week and farm workers.
Tennessee - Yes, every business with employees must have coverage. Potential exceptions to coverage include domestic and agricultural workers.
Texas – No, Texas is the only state where coverage is considered an option. The state requires insurance only for businesses that contract with government entities.
Utah – Yes, every business with employees must have coverage. Potential exceptions to coverage include real estate agents, domestic workers, farm workers and casual workers.
Vermont – Yes, every business with employees must have coverage. Potential exceptions to coverage include amateur athletes, agricultural workers whose employer’s payroll is $10,000 or less and casual workers.
Virginia – Yes, every business with employees must have coverage. Potential exceptions to coverage are more limited.
Washington – Yes, every business with employees must have coverage. Potential exceptions to coverage include entertainers and garden workers.
West Virginia – Yes, every business with three or more employees must have coverage. Potential exceptions to coverage include church workers, agricultural employers with less than six full time employees, volunteer rescue/police personnel.
Wisconsin – Yes, every business with three or more employees must have coverage. Potential exceptions to coverage include commission based real estate workers, domestic workers and some farm workers.
Wyoming - Yes, every business with one or more employees must have coverage. Potential exceptions to coverage include professional athletes and casual laborers