Workers Comp By State Master Guide (2026)

Workers’ comp by state comes down to three questions every employer needs answered: does your state require it, how many employees trigger the mandate, and what happens if you go without? Nearly every state requires workers’ compensation once you have even a single employee, but the exact trigger, owner exemptions, and penalties vary sharply. Four states are monopolistic — you must buy from the state fund — and Texas is the only state that lets most private employers opt out entirely. This plain-English guide compares workers’ comp by state for all 50 states.

Click any state below to read its full workers’ compensation requirements guide, with the exact threshold, exemptions, and penalty rules for that state.

Workers’ Comp by State — All 50 States Compared

The table below shows the core of workers’ comp by state for all 50 states. Here is what each column means:

Employee Threshold = the number of employees that triggers the workers’ comp mandate. “1” means the requirement kicks in the moment you hire your first employee. States listed with a higher number give small employers a temporary exemption.

Owner Exempt? = whether sole proprietors, partners, and corporate officers can opt themselves out of their own policy. “Yes” means the owner can file an exemption; “Varies” means the rule differs by business structure.

Monopolistic? = whether the state requires you to buy workers’ comp from the state fund rather than a private insurer. Only four states are monopolistic: North Dakota, Ohio, Washington, and Wyoming.

Penalty for No Coverage = the consequence for operating without required workers’ comp. Penalties range from fines and stop-work orders to criminal charges. The figures shown are statutory ranges; actual penalties may differ by case.

State	Employee Threshold	Owner Exempt?	Monopolistic?	Penalty for No Coverage
Alabama	5+	Yes	No	Misdemeanor; fines up to $1,000 per day
Alaska	1	Yes	No	Misdemeanor; $1,000/day + stop-work order
Arizona	1	Yes	No	Class 6 felony; penalty up to $1,000/day
Arkansas	3+	Yes	No	Misdemeanor; fines up to $10,000
California	1	Yes	No	Misdemeanor; up to $100,000+ fine + stop-work
Colorado	1	Yes	No	Fine up to $500/day + stop-work order
Connecticut	1	Yes	No	Fine up to $50,000 + criminal penalties
Delaware	1	Yes	No	Fine $1,000–$5,000/day + misdemeanor
Florida	4+ (construction: 1+)	Yes	No	Stop-work order; 2x the premium owed
Georgia	3+	Yes	No	Misdemeanor; fine up to $5,000
Hawaii	1	Varies	No	Fine up to $10,000 + criminal penalties
Idaho	1	Yes	No	Misdemeanor; $300/day + stop-work order
Illinois	1	Yes	No	Class 4 felony; $500/day fine
Indiana	1	Yes	No	Fine up to $50,000 + stop-work order
Iowa	1	Yes	No	Misdemeanor; fines + civil liability
Kansas	1	Yes	No	Fine up to $500/day + personal liability
Kentucky	1	Yes	No	Fine up to $1,000/day + criminal penalty
Louisiana	1	Yes	No	Fine up to $10,000 + imprisonment
Maine	1	Yes	No	Fine up to $10,000 + personal liability
Maryland	1	Yes	No	Misdemeanor; fine up to $10,000
Massachusetts	1	Yes	No	Fine up to $1,500/day + stop-work order
Michigan	1 (farm: 3+)	Yes	No	Misdemeanor; $1,000/day fine
Minnesota	1	Yes	No	Gross misdemeanor; fines + personal liability
Mississippi	5+	Yes	No	Fine up to $1,000/day + criminal penalties
Missouri	5+	Yes	No	Class A misdemeanor; fine up to $50,000
Montana	1	Yes	No	Fine up to $1,000/day + criminal penalty
Nebraska	1	Yes	No	Fine up to $1,000/day + injunction
Nevada	1	Yes	No	Gross misdemeanor; $15,000 fine + closure
New Hampshire	1	Yes	No	Fine up to $2,500 + personal liability
New Jersey	1	Yes	No	Criminal offense; $5,000–$10,000 fine
New Mexico	3+	Yes	No	Fine up to $1,000/day + misdemeanor
New York	1	Varies	No	Felony possible; $2,000/10 days uninsured
North Carolina	3+	Yes	No	Misdemeanor; $1/day per employee
North Dakota	1	Yes	Yes	Fine + back premiums owed to state fund
Ohio	1	Yes	Yes	Fine + back premiums + up to 50% penalty
Oklahoma	1	Yes	No	Misdemeanor; $1,000/day + injunction
Oregon	1	Yes	No	Fine up to $1,000/day + civil penalties
Pennsylvania	1	Yes	No	Felony; fine up to $2,500/day + imprisonment
Rhode Island	1	Yes	No	Fine up to $1,000/day + criminal penalties
South Carolina	4+	Yes	No	Misdemeanor; $100/day + personal liability
South Dakota	1	Yes	No	Class 1 misdemeanor; personal liability
Tennessee	5+	Yes	No	Class A misdemeanor; fine up to $10,000
Texas	Optional	N/A	No	No penalty (coverage optional); loses lawsuit shield
Utah	1	Yes	No	Fine $1,000–$5,000 + stop-work order
Vermont	1	Yes	No	Fine up to $100/day + personal liability
Virginia	2+	Yes	No	Misdemeanor; $500–$5,000 per 10 days
Washington	1	Yes	Yes	Fine + back premiums owed to state fund
West Virginia	1	Yes	No	Misdemeanor; $100–$5,000 fine + personal liability
Wisconsin	3+	Yes	No	Fine up to $100/day + personal liability
Wyoming	1	Yes	Yes	Fine + back premiums owed to state fund

Thresholds shown reflect the general rule for most private employers. Specific industries — especially construction — often have a lower or different trigger. “Owner Exempt?” refers to sole proprietors, partners, and some corporate officers; the exact rule varies by business structure. Always confirm the current figure with your state’s workers’ comp division.

Workers’ Comp by State — Employee Thresholds

The single most common question in workers’ comp by state is “when am I required to carry it?” In the majority of states, the answer is the moment you hire your very first employee. That includes full-time, part-time, and seasonal workers in most states.

A smaller group of states gives smaller employers a temporary exemption. Alabama, Mississippi, Missouri, and Tennessee set the bar at five employees. Arkansas, Georgia, New Mexico, North Carolina, and Wisconsin set it at three. Florida and South Carolina require coverage once you have four employees, though Florida drops the bar to one employee in construction. Virginia requires coverage starting with two employees. And Texas stands alone as the only state where private employers can go without coverage entirely.

One important wrinkle: even if your state does not require coverage at your current headcount, a client or general contractor can still demand a certificate of insurance. Many contracts require proof of workers’ comp regardless of what the state mandates, and a “ghost policy” can satisfy that requirement even when you have no employees.

Workers’ Comp by State — Monopolistic States

One of the most unusual rules in workers’ comp by state is the monopolistic-state system. Four states — North Dakota, Ohio, Washington, and Wyoming — require every employer to buy workers’ compensation from the state’s own fund. Private insurers are not allowed to sell comp in these states.

This has a practical consequence that catches many multistate employers off guard: if you have employees in Ohio and Pennsylvania, you must buy your Ohio comp from the Ohio state fund and your Pennsylvania comp from a private insurer. You cannot put all your workers on one national policy.

An additional gap in monopolistic states is that the state fund’s policy does not include employer’s liability coverage (Coverage Part B), which protects you from certain employee lawsuits that workers’ comp alone does not cover. To close this gap, employers in these four states typically need a separate “stop-gap” endorsement added to their general liability policy.

Workers’ Comp by State — The Texas Exception

Texas occupies a unique position in workers’ comp by state. It is the only state where most private employers can legally choose not to carry workers’ compensation coverage at all, a choice known as being a “nonsubscriber.” There is no penalty for going without.

The trade-off is real, however. Workers’ comp operates on an exclusive-remedy bargain: your employee gets medical care and lost wages without having to prove the injury was your fault, and in exchange, the employee generally cannot sue you for the injury. A Texas nonsubscriber loses that lawsuit shield. If an employee is injured, they can file a personal injury lawsuit and the employer cannot use the traditional defenses — contributory negligence, assumed risk, or the fellow-servant rule — that would normally be available. Many Texas employers carry comp voluntarily for exactly this reason.

Workers’ Comp by State — Penalties for Going Without

The penalties for operating without required workers’ comp by state range from modest fines to felony charges. The most common consequences are daily fines (often $100 to $1,000 per day of noncompliance), stop-work orders that shut down your jobsite until you get covered, and personal liability for any injuries — meaning the claim comes out of your own pocket, not an insurer’s.

Several states treat noncompliance as a criminal offense. California, Connecticut, Illinois, New York, and Pennsylvania can charge a felony in serious cases, which carries the possibility of imprisonment. In Florida, the state issues a stop-work order and assesses a penalty of twice the premium the employer should have paid during the uninsured period. And in the four monopolistic states, you owe back premiums to the state fund plus a surcharge.

Beyond the formal penalty, operating without coverage makes it nearly impossible to win most government contracts, pass a general contractor’s prequalification, or satisfy a commercial lease’s insurance requirement. The practical cost of noncompliance often exceeds the premium.

Workers’ Comp by State — Owner and Officer Exemptions

Another key variable in workers’ comp by state is whether business owners can exempt themselves from their own policy. In most states, sole proprietors and partners are not automatically covered by workers’ comp and must elect coverage if they want it. Corporate officers and LLC members are treated differently depending on the state — some are included by default and must file a formal exemption, while others are excluded unless they opt in.

Even when your state allows an owner exemption, think carefully before taking it. Workers’ comp is often the only way a business owner gets coverage for an on-the-job injury, since health insurance may deny a claim it considers work-related. And many general contractors and clients will not accept a certificate of insurance that shows zero payroll — they want to see that everyone on the jobsite is covered, including the owner.

Find Your State’s Workers’ Comp Rules

Ready to look up workers’ comp by state for your specific state? Click any state name in the table above for its complete guide, or browse related topics below.

Browse All 50 State Workers’ Comp Guides →

Official Sources

• U.S. Department of Labor: dol.gov — federal overview of state workers’ compensation programs
• U.S. Small Business Administration: sba.gov — small-business insurance requirements including workers’ comp
• NAIC: naic.org — state insurance regulation data and workers’ comp market reports
• State workers’ comp divisions: each state’s official workers’ compensation board, linked in the individual state guides above

Workers’ comp by state data compiled from official state statutes, state workers’ compensation board rules, and federal Department of Labor guidance. Employee thresholds, exemption rules, and penalty figures change as legislatures amend the law. Click any state above for its verified guide with current figures. Last reviewed June 2026.

Disclaimer: This page is for general informational purposes only and is not insurance, legal, or tax advice. Business Insure Guide is an independent educational resource, not an insurance company, broker, law firm, or tax advisor. Workers’ compensation requirements, premiums, and penalty rules vary by state and change over time. Always confirm the exact requirement and price with a licensed insurance agent and your state’s workers’ compensation division before buying or going without coverage.