Workers’ Comp Requirements by State (2026): Thresholds & Exemptions

Last updated: August 18, 2026

Whether you need workers’ compensation insurance depends entirely on which state you operate in — the trigger ranges from your very first employee (33 states and DC) to five employees (Alabama, Mississippi, Missouri, Tennessee), and two states have no general mandate at all. This table gives every state’s threshold, who counts toward it, and the statute or agency behind each rule. Use the checker below the table for a quick read on your own situation.

Every row was verified against the state’s own workers’-compensation agency or statute. General non-construction rules are shown — construction trades trigger coverage at one employee in most threshold states, and a few industries (agriculture, domestic work) carry special exemptions. This is general information, not legal advice.

Workers’ Comp Requirements: All 50 States + DC

State	Coverage required at	Who counts / notes	Authority
Alabama	5+ regularly employed, full- or part-time	Corporate officers and LLC members count toward the five	Alabama DOL
Alaska	1+ employees	Self-insurance possible only with Workers’ Compensation Board approval	Alaska DOLWD
Arizona	1+ employees, full- or part-time	Temporary workers included	Industrial Commission of Arizona
Arkansas	3+ employees for most businesses	Lower triggers apply to construction trades	Arkansas WCC
California	1+ employees	Full-time, part-time, temporary, seasonal, family on payroll, cash-paid workers	Cal. Labor Code §3700
Colorado	1+ employees	Part-time and family members included; anyone paid for work is presumed an employee	Colorado CDLE
Connecticut	1+ employees, any hours	Part-time or full-time, regardless of weekly wage	Conn. Gen. Stat. ch. 568
Delaware	1+ employees	Full- and part-time; corporate officers included	Delaware DOL OWC
District of Columbia	1+ employees	DOES-certified self-insurance is the only alternative	DC DOES OWC
Florida	4+ employees (non-construction)	Corporate officers and LLC members count unless formally exempted; construction = 1+	Fla. Stat. ch. 440
Georgia	3+ regularly employed	Part-time and full-time both count	Georgia SBWC
Hawaii	1+ employees, full- or part-time	Coverage secured by insurance or approved self-insurance	HRS §386-121; DLIR DCD
Idaho	1+ employees — before the first hire	Full-time, part-time, seasonal and occasional workers all count	Idaho Industrial Commission
Illinois	1+ employees, part- or full-time	—	Illinois WCC
Indiana	1+ employees, from day one	—	Indiana WCB
Iowa	1+ employees, most employment	Insurance or registered self-insurance	Iowa Division of Workers’ Comp
Kansas	Gross annual payroll over $20,000	ALL wages counted, including out-of-state — a payroll test, not a headcount	Kansas DOL
Kentucky	1+ employees	Full-time, part-time and seasonal all count	KRS ch. 342
Louisiana	1+ employees	Part-time, full-time, temporary and seasonal workers all count	Louisiana Workforce Commission
Maine	1+ employees — all private employers	Limited agriculture/aquaculture exemptions with employer’s-liability alternatives	39-A M.R.S. §401
Maryland	1+ employees	Few exceptions	Maryland WCC
Massachusetts	1+ employees, no minimum hours	Family members count	M.G.L. ch. 152; Mass. DIA
Michigan	3+ employees at one time, OR 1 employee at 35+ hrs/week for 13+ weeks	The one-employee prong catches a single full-timer	MCL 418.115
Minnesota	1+ employees — no minimum headcount	One part-time worker triggers the duty	Minnesota DLI
Mississippi	5+ regularly employed	Voluntary below five	Mississippi WCC
Missouri	5+ employees (non-construction)	Part-timers count; construction = 1+	RSMo §287.030
Montana	1+ employees	Sole proprietors and working members of partnerships/member-managed LLCs exempt for themselves	MCA 39-71-401
Nebraska	1+ employees in the regular trade or business	Part-time workers and minors count	Nebraska WCC
Nevada	1+ employees	—	NRS 616B.612
New Hampshire	All employees — policy in force before hiring	Full- or part-time	RSA 281-A:5; NH DOL
New Jersey	All NJ employers	Sole props from the first non-owner worker; corporations from the first working officer	NJ DOL; N.J.S.A. 34:15
New Mexico	3+ employees	Part-time, seasonal and temporary workers all count; construction = 1+	NM WCA
New York	Virtually all employers, from the first employee	Part-time staff included	NY WCL §§2–3
North Carolina	3+ employees	Corporations, LLCs, partnerships and sole props alike	NC Industrial Commission
North Dakota	All employees, before work begins	WSI state fund ONLY — private WC policies are not valid	ND WSI
Ohio	1+ employees	Ohio BWC state fund ONLY; self-insurance is a 50+ employee option	Ohio BWC
Oklahoma	1+ employees, full- or part-time	—	Oklahoma WCC
Oregon	1+ subject workers, even part-time	—	ORS 656.017
Pennsylvania	1+ employees	Part-time, seasonal and family workers all covered	PA L&I
Rhode Island	1+ employees	Sole proprietors and partners exempt for themselves	RI DLT; R.I.G.L. ch. 28-29
South Carolina	4+ regularly employed	Part-time and family members count; exemption only below 4 employees or $3,000 annual payroll	SC WCC
South Dakota	No general mandate	One of only two states without one (with Texas); an uninsured employer’s injured worker elects the remedy	SD DLR
Tennessee	5+ employees (non-construction)	Minors, family and part-time workers all count; construction = 1+	Tennessee BWC
Texas	Optional for private employers	Non-subscribers file Form DWC-005, post notices, and lose key defenses in injury suits	TDI DWC
Utah	1+ employees	Anyone under a contract of hire, including minors	Utah Labor Commission
Vermont	1+ employees	Officers and majority stockholders personally liable for benefits if uninsured	21 V.S.A. §687
Virginia	More than two employees	Part-time, seasonal and family workers count; no waivers once required	Virginia WCC
Washington	From the first employee	L&I state fund ONLY — private WC policies are not valid; premiums assessed on hours worked	WA L&I
West Virginia	All WV employers	Private carriers since the state fund privatized; written applications required for exemptions	WV OIC
Wisconsin	3+ employees (insure the day the third starts), OR under 3 with $500+ gross wages in any calendar quarter	—	Wisconsin DWD
Wyoming	Employers in statutorily enumerated “extrahazardous” industries — which include most service and construction trades	Wyoming state fund only; optional election for non-enumerated employers	Wyo. Stat. §27-14-108

Do I Need Workers’ Comp? Quick Checker

Workers’ Comp Costs by State

Whether coverage is required is one question; what it costs is another — and the gap is enormous. The State of Oregon’s DCBS runs the standard biennial 50-state comparison: it prices the same mix of 50 industries in every state, producing a premium index in dollars per $100 of payroll (rates in effect January 1, 2024, the latest edition). By that measure, Hawaii ($2.52) costs five times North Dakota ($0.50) for identical work. The study median is about $1.09 — Georgia sits exactly on it.

Two nuances worth noticing: the monopolistic state funds are not automatically expensive — North Dakota’s fund is the cheapest system in the country, while Wyoming’s ranks 8th most expensive; and the no-mandate states aren’t the cheap ones either — South Dakota (22nd) and Texas (40th) both sit mid-pack for employers who do buy coverage.

Rank (most expensive first)	State	Premium index per $100 payroll	% of median
1	Hawaii	$2.52	231%
2	New Jersey	$2.16	198%
3	New York	$1.98	182%
4	California	$1.86	170%
5	Vermont	$1.60	147%
6	Connecticut	$1.48	135%
7	Wisconsin	$1.42	130%
8	Wyoming	$1.41	130%
9	Louisiana	$1.41	129%
10	Rhode Island	$1.38	127%
11	Maine	$1.37	125%
12	Washington	$1.35	123%
13	Illinois	$1.34	123%
14	Montana	$1.34	122%
15	Oklahoma	$1.33	122%
16	Missouri	$1.31	120%
17	Minnesota	$1.25	114%
18	New Hampshire	$1.22	112%
19	Iowa	$1.21	110%
20	Alaska	$1.16	106%
21	Pennsylvania	$1.14	105%
22	South Dakota	$1.13	103%
23	Nebraska	$1.12	103%
24	Alabama	$1.11	101%
25	Idaho	$1.10	101%
26	Georgia	$1.09	100%
27	New Mexico	$1.05	96%
28	Colorado	$1.05	96%
29	South Carolina	$1.03	94%
30	Florida	$1.00	92%
31	Massachusetts	$0.97	89%
32	Delaware	$0.97	89%
33	North Carolina	$0.95	87%
34	Mississippi	$0.94	86%
35	Kansas	$0.91	83%
36	Michigan	$0.90	82%
37	Maryland	$0.89	82%
38	Oregon	$0.89	82%
39	Tennessee	$0.80	73%
40	Texas	$0.78	72%
41	Kentucky	$0.76	70%
42	Nevada	$0.73	67%
43	District of Columbia	$0.73	67%
44	Virginia	$0.73	67%
45	Indiana	$0.71	65%
46	Arizona	$0.70	64%
47	Ohio	$0.68	63%
48	Utah	$0.63	57%
49	West Virginia	$0.54	49%
50	Arkansas	$0.53	48%
51	North Dakota	$0.50	45%

Source: Oregon DCBS, Workers’ Compensation Premium Rate Ranking, calendar year 2024 (published June 2025). The index holds the industry mix constant across states, so it measures the system’s cost level, not your business’s exact rate — your premium depends on your class codes, payroll, and claims history.

The Patterns Worth Knowing

• First-employee states are the norm: 33 states + DC require coverage from hire #1 — and almost everywhere, part-time, seasonal, temporary, family and minor workers count.
• Threshold states: 3+ in Arkansas, Georgia, Michigan, New Mexico, North Carolina, Virginia, Wisconsin (plus Virginia at more than two); 4+ in Florida, South Carolina; 5+ in Alabama, Mississippi, Missouri, Tennessee. Nearly all drop to one employee for construction.
• Kansas is the odd one out: a $20,000 gross-payroll test instead of a headcount — and family wages count.
• Monopolistic four: North Dakota, Ohio, Washington and Wyoming sell coverage only through their state funds. Private policies are not valid there, and national carriers’ bundles exclude WC in those states.
• Only Texas and South Dakota have no general mandate — and both punish going bare through the courtroom rather than the statute book.
• Owners usually don’t count for their own coverage — but in states like Alabama, corporate officers and LLC members DO count toward the employee threshold even when exempt themselves.

Frequently Asked Questions

Which states do not require workers’ compensation insurance?

Texas and South Dakota are the only two states with no general workers’ compensation mandate for private employers. Texas employers may opt out (“non-subscribers”) but must file Form DWC-005, post notices, and give up key legal defenses if an employee sues over an injury. Every other state and DC requires coverage once an employer crosses its threshold — which in most states is the very first employee.

Do I need workers’ comp insurance for just one employee?

In most states, yes. 33 states and DC require coverage from the first employee. The main exceptions: Alabama, Mississippi, Missouri and Tennessee wait until 5 employees; Florida and South Carolina until 4; Arkansas, Georgia, New Mexico, North Carolina, Wisconsin, Michigan and Virginia until roughly 3; and Kansas uses a $20,000 annual payroll test instead of a headcount. Construction is the near-universal exception — most threshold states drop to 1 employee for construction trades.

Who is exempt from workers’ compensation requirements?

Exemptions are state-specific, but the recurring ones are: business owners themselves (sole proprietors, partners, and often LLC members are exempt for their own coverage in most states, though states like Alabama count officers and LLC members toward the employee threshold), certain agricultural and domestic workers, and casual or non-business employment. Several states let corporate officers file formal exemption elections. Be careful in the other direction: part-time, seasonal, temporary, family and minor workers COUNT as employees almost everywhere.

What happens if I don’t carry required workers’ comp coverage?

Penalties scale from daily fines to criminal charges: Alabama fines up to $1,000 per employee per day, Rhode Island up to $1,000 per day plus a possible felony charge, Kentucky treats operating uninsured as a Class D felony, and Vermont makes officers and majority stockholders personally liable for an injured employee’s benefits. Most states can also issue stop-work orders.

How much does workers’ compensation insurance cost?

It depends more on your state than almost any other factor. Oregon’s DCBS biennial 50-state study — which prices an identical industry mix everywhere — put the January 2024 range at $0.50 per $100 of payroll in North Dakota to $2.52 in Hawaii, a 5-to-1 spread, with a national median around $1.09. Your actual premium then depends on your industry’s class code, your payroll, and your claims history; high-risk trades pay multiples of the index.

Are the four “monopolistic” states different?

Yes. In North Dakota, Ohio, Washington, and Wyoming you cannot buy workers’ comp from a private insurer — coverage comes only from the state fund (WSI, BWC, L&I, and Wyoming’s fund respectively). Standard business-insurance bundles from national carriers exclude WC in these states, so budget for the state-fund premium separately.

Sources & Citation

Each row cites its authority in the table above. The state-name links lead to our per-state insurance guides, where every requirement is sourced to the agency or statute in context. The five states without a linked insurance guide (Maine, Montana, Vermont, Rhode Island, Hawaii) were verified directly against 39-A M.R.S. §401, MCA 39-71-401, 21 V.S.A. §687, RI DLT, and HRS §386-121 in August 2026. You are welcome to cite this table with attribution and a link to this page.