Vermont 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 Vermont 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 Vermont sources, verified as of June 2026.
In This Vermont Guide:
Is Workers’ Comp Required in Vermont?
Vermont requires workers compensation insurance for all employers with one or more employees, with no minimum threshold — coverage is mandatory from the first hire under 21 V.S.A. Chapter 9
Vermont Workers’ Comp Requirements at a Glance
Here are the exact Vermont workers compensation requirements every employer should know:
| Employees that trigger the mandate | 1 |
| Which workers count | All employees count toward the threshold regardless of status — full-time, part-time, seasonal, and temporary workers are all included; the mandate applies as soon as one person is employed |
| Who is exempt | Sole proprietors and partners of unincorporated businesses (excluded by default but may elect coverage voluntarily); up to four corporate officers or LLC members (may apply to the Department of Labor for exclusion); casual workers whose employment is not in the employer’s trade or business; domestic service workers in a private dwelling (unless employer opts in); agricultural/farm workers if the employer’s aggregate annual payroll is under 10000; family members dwelling in the employer’s household (unless wages are included in payroll for premium purposes); real estate brokers and salespersons (with Commissioner approval); amateur athletes; independent contractors |
| Owners & officers | Sole proprietors and partners are automatically excluded from coverage but may voluntarily elect it; corporate officers and LLC members are automatically included by default, but up to four officers or members may apply to the Vermont Department of Labor for written approval to be excluded — this is not automatic and requires a filed application |
| Penalty for going without | Administrative penalties begin at up to 100 per day for the first 7 days without coverage and increase to up to 150 per day thereafter, with a pre-notice cap of 5000; after the Commissioner issues a stop-work order, penalties increase to up to 250 per day and up to 250 per employee per day; the Commissioner shall issue an emergency stop-work order requiring all operations to cease until coverage is secured; violating a stop-work order carries a criminal fine of up to 10000 or imprisonment for up to 180 days or both; uninsured employers are personally liable for all workers compensation benefits out of pocket (21 V.S.A. Sections 687, 688, and 692) |
| Monopolistic state? | No — buy from private carriers |
| State fund | Vermont does not have a state-owned workers compensation fund; it operates an open competitive private insurance market with the NCCI assigned risk pool as the residual market for employers who cannot obtain voluntary coverage |
How to Get Workers’ Comp Coverage in Vermont
Most Vermont employers purchase a policy from a private insurance carrier licensed in the state; employers unable to obtain voluntary market coverage may apply to the NCCI assigned risk pool (residual market); qualified employers with substantial financial resources may apply to the Vermont Department of Labor for approval to self-insure
Private market: YES
What Workers’ Comp Covers in Vermont
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 Vermont 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 Vermont workers compensation requirements: the coverage exists to keep one bad injury from sinking both the worker and the business.
Employees vs. Independent Contractors in Vermont
The most common way owners get the Vermont 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 Vermont 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 Vermont workers’-comp rules: Vermont employers pay a mandatory 1.5 percent surcharge on workers compensation premiums to fund the Workers Compensation Administration Fund under 21 V.S.A.
Section 711; employers must report workplace injuries to the Department of Labor within 72 hours if the injury results in medical care or absence from work; Vermont requires a Workers Compensation Reinstatement Rights poster displayed where all employees can see it; Vermont is an NCCI state for rate-setting and classification codes; the state has a relatively small insurance market with approximately 25 carriers actively writing workers compensation policies
Understanding Vermont Workers Compensation Requirements
The Vermont workers compensation requirements exist to make sure injured employees get medical care and lost wages without having to sue. For most owners, the Vermont 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, Vermont workers compensation requirements apply whether you planned for them or not, and the penalty for going without is real. If any part of the Vermont 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 Vermont 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 Vermont?
Vermont requires workers compensation insurance for all employers with one or more employees, with no minimum threshold — coverage is mandatory from the first hire under 21 V.S.A. Chapter 9
What is the penalty for not having workers’ comp in Vermont?
Administrative penalties begin at up to 100 per day for the first 7 days without coverage and increase to up to 150 per day thereafter, with a pre-notice cap of 5000; after the Commissioner issues a stop-work order, penalties increase to up to 250 per day and up to 250 per employee per day;
the Commissioner shall issue an emergency stop-work order requiring all operations to cease until coverage is secured; violating a stop-work order carries a criminal fine of up to 10000 or imprisonment for up to 180 days or both; uninsured employers are personally liable for all workers compensation benefits out of pocket (21 V.S.A.
Sections 687, 688, and 692)
Who is exempt from Vermont workers’ comp?
Sole proprietors and partners of unincorporated businesses (excluded by default but may elect coverage voluntarily); up to four corporate officers or LLC members (may apply to the Department of Labor for exclusion); casual workers whose employment is not in the employer’s trade or business; domestic service workers in a private dwelling (unless employer opts in); agricultural/farm workers if the employer’s aggregate annual payroll is under 10000;
family members dwelling in the employer’s household (unless wages are included in payroll for premium purposes); real estate brokers and salespersons (with Commissioner approval); amateur athletes; independent contractors
Official Vermont Sources & Resources
- Vermont Vermont Department of Labor, Workers’ Compensation and Safety Division (claims and compliance), with insurer regulation handled by the Vermont Department of Financial Regulation: https://labor.vermont.gov/workers-compensation
- Vermont Workers’ Comp Statute: https://legislature.vermont.gov/statutes/chapter/21/009
- U.S. Department of Labor — Workers’ Comp: dol.gov
- U.S. Small Business Administration: sba.gov
These Vermont 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 Vermont 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.