map of us

State-by-State Workers’ Comp Exemptions

The majority of US states require businesses to obtain workers’ comp insurance coverage, which financially protects both employers and employees in the event of a work-related injury or illness. However, exemptions vary widely from state to state and depend on factors such as:

  • How many employees you have
  • How many hours they work 
  • The wages they earn 
  • Whether they are independent contractors 
  • Whether you are a sole proprietor, an LLC owner, or a partner in a partnership with no other employees

If you’re not sure whether your business is exempt from providing workers’ comp insurance, here’s a summary of exemptions by state:

Alabama

Coverage isn’t required for businesses with four or fewer employees. Full-time and part-time status are not relevant.

You are not required to carry coverage for farm laborers, domestic laborers, or casual laborers (such as temporary employees or employees hired on a part-time basis for only an hour or a day at a time). 

Alaska

Businesses with one or more employees are required to have coverage unless the employer has been approved as a self-insurer by the Alaska Workers’ Compensation Board.  

Business owners and executives are themselves exempt if they are:

  • The sole proprietor of a sole proprietorship
  • Partners in a partnership
  • Members of a limited liability company with a minimum 10% ownership interest
  • Executive officers of municipal, religious, and legally registered nonprofit corporations. These are not considered to be employees unless the corporation specifically elects to cover them.
  • Executive officers of for-profit corporations with a minimum 10% ownership interest

The following employees are exempt:

  • Part-time baby-sitters
  • Cleaning persons (non-commercial)
  • Harvest help and similar part-time/transient help (call division to discuss specific situations)
  • Sports officials for amateur events
  • Contract entertainers
  • Commercial fishers as defined in AS 16.05.940
  • Taxicab drivers under specific contractual arrangements
  • A participant in the Alaska temporary assistance program engaged in work activities required under AS 47.27.035
  • Professional hockey team players and coaches, if those persons are covered under a health care insurance plan
  • Qualified real estate licensee under specific contractual arrangements
  • Persons defined as transportation network company drivers

Arizona

Coverage is mandatory for any business employing one or more employees. Exemptions include:

  • Independent contractors
  • Casual laborers 
  • Sole proprietors having no employees 
  • Employees who have voluntarily rejected workers’ compensation coverage 

Arkansas

Employers with fewer than three employees are not required to carry coverage, unless the employees are:

  • Agricultural farm laborers
  • Domestic service employees in a private home
  • Gardeners, maintenance workers, remodelers, or employees who perform similar work in a private home or employer residence
  • Certain government agency employees
  • Employees of nonprofit, religious, charitable, or relief organizations
  • Employees of newspapers, magazines, periodical vendors, sellers, and deliverers
  • Real estate agents

California

All employers must carry coverage. Exemptions include:

  • Sole proprietors who opt out of coverage
  • Employers who are approved to self-insure

Colorado

Businesses with one or more employees must obtain coverage. Exemptions include: 

  • Certain casual maintenance or repair work performed for a business for under $2,000 per calendar year 
  • Licensed real estate agents and brokers working on commission
  • Any person who volunteers time or services for a ski area 
  • Certain business owners 
  • Independent contractors who are generally defined below 
  • Certain domestic, maintenance, or repair work for a private homeowner that is not done full-time
  • Drivers under a lease agreement with a common or contract carrier
  • Federal employees and railroad employees (covered under federal laws)
  • Certain corporate officers and members of LLCs

Connecticut

Businesses with one or more employees must obtain coverage. Exemptions include: 

  • Domestic workers who work fewer than 26 hours per week
  • Sole proprietors, corporate officers, partners in partnerships, and members of multi-member LLCs. They may opt out but have to provide coverage for their employees.

Delaware

Businesses with one or more employees must obtain coverage. Exemptions include: 

  • Farm laborers
  • Household workers employed in a private home who earn less than $750 in cash in a three-month period

Florida

Employers with four or more employees are required to carry workers’ compensation insurance, with the following exemptions:

  • Farm laborers (unless there are more than six regular employees and/or 12 seasonal employees)
  • Independent contractors

Construction industry requirements dictate that coverage must be provided for one or more employees.

Georgia

Businesses with three or more employees are required to carry coverage, with the only exemptions being sole proprietors and partners in a partnership.

Hawaii

Any employer with one or more employees, full-time or part-time, permanent or temporary, is required to provide coverage. 

  • Sole proprietors, partners, and corporate officers  
  • Domestic workers earning less than $225 per calendar quarter
  • Some 25% stockholders and all 50% stockholders
  • Real estate salespeople paid by commission

Idaho

All employers are required to carry coverage. Exemptions include: 

  • Household domestic employees
  • Casual employees
  • Sole proprietors, partners, and corporate officers  
  • Members of an employer’s family if the employer is the owner of a sole proprietorship 
  • Real estate agents

Illinois

If you have one employee, even a part-time employee, you must obtain workers’ compensation insurance. There are exceptions for:

  • Sole proprietors, partners, and corporate officers 
  • Real estate agents

Indiana

All employers are required to carry coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Independent contractors
  • Real estate agents
  • Casual employees
  • Farm and agricultural employees
  • Household employees
  • Railroad employees

Iowa

All employers are required to carry coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Independent contractors 
  • Some persons employed in agriculture or by a relative
  • Employees who perform casual labor that is not performed for purposes of the employer’s trade or business or if the employee’s services are performed in or about the employer’s dwelling

Some of the exemptions apply only if the employee’s earnings from the employer are less than $1,500 annually.  

Kansas

All businesses are required to carry coverage. Exemptions include:

  • Some agricultural workers 
  • Sole proprietors, partners, and corporate officers 
  • Independent contractors with no employees

Kentucky

All employers must provide coverage. Exemptions include: 

  • Agriculture employers/employees 
  • Domestic workers in private homes if fewer than two (must work less than 40 hours per week) 
  • Those working for sustenance if with charitable or religious organization 
  • Certain religious organizations

Louisiana

All employers must provide coverage. Exemptions include: 

  • Certain employees of a private residence
  • Certain employees of a private unincorporated farm
  • Certain musicians and performers
  • Employees covered by certain federal laws
  • Employees of railroads or other vessels in interstate or foreign commerce
  • Crews of airplanes engaged in crop dusting or spraying operations
  • Uncompensated officers and members of boards of directors of certain nonprofit organizations
  • Landmen

Maine

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Some domestic workers
  • Some agricultural workers

Maryland

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Some agricultural workers

Massachusetts

All employers must provide coverage. Exemptions include: 

  • Members of an LLC, partners of a limited liability partnership, or sole proprietors of an unincorporated business (employees must still be covered)
  • Domestic service workers who work fewer than 16 hours per week

Michigan

All employers regularly employing one or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks must provide coverage. Exemptions include:

  • Some agricultural employees (fewer than three employees working fewer than 35 hours per week)
  • Some domestic employees (fewer than three employees working fewer than 35 hours per week)

Minnesota

All employers must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Employers covered by federal liability laws
  • Family farm operations, with some restrictions

Mississippi

All employers with five or more employees must provide coverage. Exemptions include:

  • Sole proprietors, partners, and corporate officers 
  • Employers with fewer than five employees 
  • Domestic laborers
  • Farm laborers 
  • Independent contractors

Missouri

All employers with five or more employees must provide coverage. Exemptions include:

  • Railroad, postal, and maritime workers covered under federal laws
  • Farm laborers
  • Domestic servants in a private home
  • Occasional labor performed for or related to a private household
  • Qualified real estate agents
  • Direct sellers
  • Volunteers of a tax exempt organization 
  • Sports officials or contest workers for interscholastic activity programs or amateur youth programs who are not employed by the sponsor of the event

Montana

All employers must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers 
  • Household or domestic employees whose typical duties include house cleaning and yard work
  • Casual employment 
  • Persons working in return for aid or sustenance only
  • Amateur athletic officials, including a timer, referee, umpire, or judge
  • Real estate, securities, or insurance salespersons paid only by commission with no guarantee of minimum earnings
  • Direct sellers
  • Newspaper carriers who deliver singles or bundles of newspapers and have acknowledged no coverage in writing
  • Freelance correspondents who submit articles or photos for publication, are paid for each item, and have acknowledged no coverage in writing
  • Licensed barbers or cosmetologists who contract with cosmetology establishments
  • Petroleum land professionals
  • Licensed jockeys riding in a horse race, from the time the jockey reports to the scale room through the time that the jockey is weighed out after a race
  • Licensed trainers, assistant trainers, exercise persons, or pony persons while on the grounds of a licensed horse race meet
  • Employees who are not residents of Montana and whose primary duties are not outside Montana. The employer must comply with the coverage requirements where the employee resides or performs work.
  • Officers or managers of a private, nonprofit, irrigation ditch company, or water user cooperative, corporation, association, or organization
  • An ordained, commissioned, or licensed minister of a church or a member of a religious order
  • Persons providing companionship services or respite care for individuals who cannot care for themselves. The person providing the services or care must be employed directly by a family member or a legal guardian.
  • Volunteer workers, excluding air search and rescue volunteers, volunteer reserve auxiliary law enforcement, and volunteer firefighters
  • Professional athletes on a team or club engaged in contact sports
  • Employees of freight brokers or freight forwarders
  • A musician performing under a written contract
  • Some agricultural workers

Nebraska

All employers with one or more employees must provide coverage. Exemptions include: 

  • Federal employees, railroad employees, independent contractors, and most volunteers
  • Domestic servants
  • Agricultural laborers
  • Sole proprietors, partners, and corporate officers

Nevada

All employers with one or more employees must provide coverage. Exemptions include: 

  • Employment related to those interstate commerce entities that are not subject to the legislative power of the state of Nevada 
  • Employment covered by private disability and death benefit plans that comprehend compensation payments of equal or greater amounts than those provided in NRS 616 and that have been in effect for one year prior to July 1, 1947
  • Employees who are brought into Nevada on a temporary basis and who are insured in another state if extraterritorial coverage provisions are in effect with the other state
  • Casual employment in the construction trade (employment lasting not more than 20 days and having a total labor cost of less than $500), if employment is not in the course of trade, business, profession, or occupation of the employer

New Hampshire

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors 
  • Limited liability company (LLC) that has three or fewer executive officers or LLC members and no other employees

New Jersey

All employers with one or more employees must provide coverage, exempting only employees covered by federal programs.

New Mexico

All employers with three or more employees must provide coverage. Exemptions include:

  • Sole proprietors. However, sole proprietors are counted as employees for the purpose of determining whether a business has three or more workers. 

New York

All employers must provide coverage. Exemptions include: 

  • Individuals who volunteer their services for nonprofit organizations and receive no compensation
  • Duly ordained, commissioned, or licensed ministers, priests, and rabbis; sextons; Christian Science readers; and members of religious orders
  • Members of supervised amateur athletic activities operated on a nonprofit basis, provided that such members are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity
  • People engaged in a teaching capacity in or for a nonprofit religious, charitable, or educational institution
  • People engaged in a nonmanual capacity in or for a nonprofit religious, charitable, or educational institution
  • Persons receiving charitable aid from a religious or charitable institution who perform work in return for such aid and who are not under any express contract of hire
  • People who are covered for specific types of employment under another workers’ compensation system such as those employed in certain maritime trades, interstate railroad employees, federal government employees, and others covered under federal workers’ compensation laws
  • The spouse and minor children of an employer who is a farmer, as long as they are not under an express contract of hire
  • Certain employees of foreign governments and Native American Nations 
  • New York City police officers, firefighters, and sanitation workers who are covered under provisions of the New York State General Municipal Law
  • People, including minors, doing yard work or casual chores in and about a one-family, owner-occupied residence or the premises of a nonprofit, noncommercial organization
  • Certain real estate salespersons who sign a contract with a broker stating that they are independent contractors 
  • Certain media sales representatives who sign a contract stating that they are independent contractors 
  • Certain insurance agents or brokers who sign a contract stating that they are independent contractors
  • Sole proprietors, partners, and certain one/two person corporate officers with no other individuals providing services integral to the business 

North Carolina

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers 
  • Some railroad employees
  • Casual employees
  • Domestic servants directly employed by the household
  • Farm laborers when fewer than 10 full-time, non-seasonal farm laborers who are regularly employed by the same employer
  • Federal government employees in North Carolina
  • Sellers of agricultural products for the producers thereof on commission or for other compensation, paid by the producers, provided the product is prepared for sale by the producer

North Dakota

All employers must provide coverage. Insurance is provided by North Dakota Workforce Safety and Insurance.

Ohio

All employers must provide coverage. Exemptions include:

  • Sole proprietor
  • Partnership
  • Limited liability company acting as a sole proprietor
  • Limited liability company acting as a partnership
  • Family farm corporate officers
  • Individual incorporated as a corporation with no employees
  • Ordained or associate ministers of a religious organization

Oklahoma

All employers must provide coverage. Exemptions include: 

  • Independent contractors 
  • Certain agricultural workers
  • Licensed real estate brokers paid on a commission basis
  • Certain persons providing services administered by the Oklahoma Department of Human Services
  • Any person employed by an employer with five or fewer employees, all of whom are related by blood or marriage to the employer
  • Any person employed by a tax-exempt youth sports league
  • Sole proprietors, partners, and corporate officers  
  • Any person who provides voluntary service and who receives no wages for the services other than meals, drug or alcohol rehabilitation therapy, transportation, lodging, or reimbursement for incidental expenses
  • Owner-operators of a truck-tractor
  • Drive-away owner-operators

Oregon

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Family-owned companies with no employees that have multiple family members working in the same company
  • Leased workers
  • Temporary workers

Pennsylvania

All employers with one or more employees must provide coverage. Exemptions include: 

  • Federal workers
  • Longshoremen
  • Railroad workers
  • Casual workers
  • Some agricultural laborers 
  • Domestic workers who do not come under the Workers’ Compensation Act
  • Sole proprietors, partners, and corporate officers  
  • Those who have been granted exemption due to religious beliefs by the Department of Labor and Industry 
  • Executive officers who have been granted exemption by the Department of Labor and Industry 
  • Licensed real estate salespersons or associate real estate brokers

Rhode Island

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Independent contractors

South Carolina

All employers with four or more employees must provide coverage.

South Dakota

Employers are not required to carry workers’ compensation coverage.

Tennessee

All employers with five or more employees must provide coverage. Exemptions include: 

  • Farm laborers
  • Domestic laborers 
  • Sole proprietors, partners, and corporate officers 

Texas

Employers are not required to carry workers’ compensation coverage, except for private employers who are contracted with the government. 

Utah

All employers with one or more employees must provide coverage. Exemptions include: 

  • Sole proprietors, partners, and corporate officers  
  • Independent contractors

Vermont

All employers must provide coverage. Exemptions include: 

  • Casual employees 
  • Persons engaged in amateur sports
  • Some agriculture employees 
  • Volunteers

Virginia

All employers with three or more employees must provide coverage. Exemptions include:

  • Sole proprietors. However, sole proprietors are counted as employees for the purpose of determining whether a business has three or more workers. 

Washington D.C.

Workers’ compensation insurance is required in Washington, D.C. if an employer has one or more employees. An employer is also entitled to apply for self-insurance, but must be approved by the Department of Employment Services (DOES) office.

Sole proprietors in Washington, D.C., can purchase workers’ compensation insurance for themselves, but they are not required to unless they have employees. Homeowners are required to have workers’ comp insurance for domestic workers if they work at least 240 hours during any calendar quarter in the same or previous year.

Washington

All employers must provide coverage. Exemptions include: 

  • Some officers of public corporations 
  • Some independent contractors 
  • Volunteers

West Virginia

All employers with five or more employees must provide coverage. Exemptions include:

  • Domestic workers 
  • Casual laborers
  • Employees of a church 
  • Those engaged in professional sports activities 
  • Employers covered by federal programs 

Wisconsin

All employers with three or more employees must provide coverage. Employers with fewer than three employees but who pay wages of $500 or more in any calendar quarter are also required to carry workers’ compensation coverage. Exemptions include some farm laborers. 

Wyoming

All employers must provide coverage, with exemptions for sole proprietors, partners, and corporate officers, and their spouses and dependents. 

Ready to get started? We bet we’re more affordable and faster than anything you’ve seen before.  Click here to start your free workers’ comp quote.

Instant Quote

We know you’re busy. So we’ll get right to the point.

Learning Center Resources


  • Top Workers’ Comp Questions
  • Small Business Resources
  • Workplace Safety Tips