Minnesota workers compensation requirements decide exactly when you must carry coverage, who counts toward the threshold, and what it costs to skip it. This guide breaks down the Minnesota workers compensation requirements in plain English — the employee count that triggers the mandate, who is exempt, the penalty for going without, and how to get covered. All figures are from Minnesota sources, verified as of June 2026.
In This Minnesota Guide:
Is Workers’ Comp Required in Minnesota?
Yes, workers compensation insurance is required in Minnesota for virtually all employers from the first employee; Minnesota has no minimum employee threshold, so even one part-time or seasonal worker triggers the mandate under Minnesota Statutes Chapter 176
Minnesota Workers’ Comp Requirements at a Glance
Here are the exact Minnesota workers compensation requirements every employer should know:
| Employees that trigger the mandate | 1 |
| Which workers count | All employees count toward the threshold including full-time, part-time, and seasonal workers; there is no distinction by hours or employment type; coverage is required from the first employee hired |
| Who is exempt | Sole proprietors with no employees other than spouse, parents, or children; partners in a partnership; executive officers of a closely held corporation (10 or fewer shareholders and fewer than 22880 hours of payroll in the preceding calendar year) who own at least 25 percent of the stock; managers of an LLC with 10 or fewer members and fewer than 22880 hours of payroll who own at least 25 percent membership interest; family farm corporation officers; persons covered under the Domestic Volunteer Service Act of 1973; family members related by blood or marriage within the third degree of kindred to a closely held corporation officer if the corporation files a written election with the commissioner |
| Owners & officers | Sole proprietors are automatically excluded from coverage but may elect to be covered; executive officers of a closely held corporation (10 or fewer shareholders and fewer than 22880 hours of payroll) who own at least 25 percent of stock may exclude themselves by filing a written election with the Minnesota Department of Labor and Industry; LLC managers with at least 25 percent membership interest in an LLC with 10 or fewer members and fewer than 22880 hours of payroll may also exclude themselves; partners in a partnership are excluded but may elect coverage; those electing coverage must be included at an annual wage within the minimum and maximum amounts set by the commissioner |
| Penalty for going without | Administrative penalty of 200 to 1000 per employee per week the employer was uninsured; an order to cease employing workers until coverage is obtained; if an employee is injured while uninsured the employer must reimburse the Special Compensation Fund plus a 65 percent penalty on the reimbursement amount; a 2000 penalty for providing false workers compensation insurance information on a license or permit application; willful and intentional failure to insure is a gross misdemeanor under Minnesota Statutes section 176.181 subdivision 4 punishable by fines up to 3000 and potential imprisonment |
| Monopolistic state? | No — buy from private carriers |
| State fund | Minnesota does not have a state-operated insurance fund; coverage is obtained through the private market; the Minnesota Workers Compensation Insurers Association (MWCIA) administers the assigned risk pool for employers unable to obtain coverage in the voluntary market |
How to Get Workers’ Comp Coverage in Minnesota
Employers obtain coverage by purchasing a policy from a private insurance carrier licensed in Minnesota; employers who cannot find coverage in the voluntary market may obtain it through the assigned risk pool administered by the Minnesota Workers Compensation Insurers Association (MWCIA); large employers may also apply to the Minnesota Department of Labor and Industry for a permit to self-insure
Private market: YES
What Workers’ Comp Covers in Minnesota
Workers’ compensation is a no-fault system: an injured employee gets benefits without having to prove the employer did anything wrong, and in exchange gives up the right to sue for most workplace injuries. A typical Minnesota policy pays for medical treatment tied to a work injury, part of the wages lost while the worker recovers, longer-term disability benefits if the injury is permanent, and death benefits to a family.
It also includes employers-liability coverage, which protects the business if an injury still leads to a lawsuit. That trade-off is the practical heart of the Minnesota workers compensation requirements: the coverage exists to keep one bad injury from sinking both the worker and the business.
Employees vs. Independent Contractors in Minnesota
The most common way owners get the Minnesota workers compensation requirements wrong is by assuming a worker is an “independent contractor” who does not count. State agencies look at how the work is actually controlled, not the label on a 1099. If Minnesota decides a contractor was really an employee, the business can owe back premiums and penalties as if coverage should have been in place all along.
When you are close to the employee threshold, confirm each worker’s status with your state board before you decide you are exempt.
Other Minnesota workers’-comp rules: Minnesota requires every state and local licensing agency to withhold issuance or renewal of a business license or permit until the applicant provides proof of workers compensation coverage under Minnesota Statutes section 176.182; first report of injury must be filed within 10 days for lost-time injuries;
the closely held corporation threshold is defined as fewer than 22880 hours of payroll in the preceding calendar year which is roughly equivalent to 11 full-time employees
Understanding Minnesota Workers Compensation Requirements
The Minnesota workers compensation requirements exist to make sure injured employees get medical care and lost wages without having to sue. For most owners, the Minnesota workers compensation requirements come down to one number: the employee count that triggers the mandate, shown in the table above.
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Once you hit that count, Minnesota workers compensation requirements apply whether you planned for them or not, and the penalty for going without is real. If any part of the Minnesota workers compensation requirements is unclear for your business, your state workers’-comp board can confirm the threshold, the exemptions, and how to get covered.
Next step: Once you know what your business in Minnesota actually needs, comparing quotes from several carriers takes only a few minutes. Many owners do this right after they understand their state and trade requirements.
Frequently Asked Questions
Is workers’ comp required in Minnesota?
Yes, workers compensation insurance is required in Minnesota for virtually all employers from the first employee; Minnesota has no minimum employee threshold, so even one part-time or seasonal worker triggers the mandate under Minnesota Statutes Chapter 176
What is the penalty for not having workers’ comp in Minnesota?
Administrative penalty of 200 to 1000 per employee per week the employer was uninsured; an order to cease employing workers until coverage is obtained; if an employee is injured while uninsured the employer must reimburse the Special Compensation Fund plus a 65 percent penalty on the reimbursement amount; a 2000 penalty for providing false workers compensation insurance information on a license or permit application;
willful and intentional failure to insure is a gross misdemeanor under Minnesota Statutes section 176.181 subdivision 4 punishable by fines up to 3000 and potential imprisonment
Who is exempt from Minnesota workers’ comp?
Sole proprietors with no employees other than spouse, parents, or children; partners in a partnership; executive officers of a closely held corporation (10 or fewer shareholders and fewer than 22880 hours of payroll in the preceding calendar year) who own at least 25 percent of the stock;
managers of an LLC with 10 or fewer members and fewer than 22880 hours of payroll who own at least 25 percent membership interest; family farm corporation officers; persons covered under the Domestic Volunteer Service Act of 1973; family members related by blood or marriage within the third degree of kindred to a closely held corporation officer if the corporation files a written election with the commissioner
Official Minnesota Sources & Resources
- Minnesota Minnesota Department of Labor and Industry, Workers Compensation Division: https://www.dli.mn.gov/business/workers-compensation
- Minnesota Workers’ Comp Statute: https://www.revisor.mn.gov/statutes/cite/176
- U.S. Department of Labor — Workers’ Comp: dol.gov
- U.S. Small Business Administration: sba.gov
These Minnesota workers compensation requirements were last verified against official sources in June 2026. Rules and penalties change — confirm the current figure with your state workers’-comp board or a licensed agent.
More Minnesota Business Insurance Guides
Disclaimer: This guide is informational only and is not insurance, legal, or tax advice. Business Insure Guide is an independent educational resource, not an insurance agency or carrier. Coverage needs, legal requirements, and prices vary by business, profession, and state and change over time. Always verify the exact requirement and price with a licensed insurance agent and your state before you buy.