Short answer: Generally, yes. Oklahoma's Administrative Workers' Compensation Act applies to employers with even one employee. The law excludes certain people, such as owners holding 10% or more, small all-family businesses, commission real estate agents and some farm workers. An employer who fails to secure coverage commits a misdemeanor and faces civil fines of up to $1,000 a day.
Who counts as an employer
Under 85A O.S. §2, an "employer" is a person or entity employing anyone who meets the act's definition of "employee," and the act applies to all public and private entities unless it says otherwise. An "employee" is anyone, including a minor, working under a contract of hire or apprenticeship, written or oral. Casual work outside the employer's usual business is excluded.
Who the act excludes
Section 2 lists people who aren't "employees," including:
- Owners. Sole proprietors, partners, franchisees under the FTC franchise rule, LLC members owning at least 10%, and corporate stockholder-employees owning 10% or more, unless they elect coverage.
- Small family businesses. Employees of an employer with five or fewer total employees, all of whom are close relatives (within the second degree by blood or marriage) or dependents living in the household.
- Real estate. Licensed sales associates or brokers paid on commission.
- Agriculture. Farm, ranch and horticulture workers of employers below an annual agricultural payroll threshold set in the statute, and agricultural workers who don't operate motorized machines.
- Truck owner-operators who own or lease and drive their own rig, unless the contracting party is the lessor. They can elect coverage as sole proprietors.
- Youth sports leagues that are tax-exempt.
- Unpaid volunteers receiving only meals, transportation, lodging or similar items, apart from certain emergency-service volunteers the act covers.
If you're near any of these lines, read the current statute or get advice before relying on an exclusion. The agricultural payroll figure, in particular, has been amended.
How to secure compensation
The act's §38 (Title 85A) lists the approved methods:
- Insurance from a company authorized to write workers' compensation in Oklahoma. The insurer must file notice of the policy with the Workers' Compensation Commission within 30 days.
- Guaranty insurance from an authorized company.
- Own-risk (self-insurance), with proof of financial ability to pay. Smaller employers must post security or show excess coverage.
- Group self-insurance through an approved association.
Penalties for failing to secure coverage
Section 40 of the act sets two layers of penalties:
- Criminal: a misdemeanor, with a fine of up to $10,000 on conviction.
- Civil: the Workers' Compensation Commission can serve a proposed judgment and assess up to $1,000 per day of violation, capped at $50,000 for a first violation.
The employer has 20 days to contest a proposed judgment in writing, or it becomes final. Unpaid penalties and continued noncompliance can lead to injunctions and further collection actions. These penalties don't replace the employer's other liabilities under the act.
Owners can opt in
The owner exclusion isn't a ban. Sole proprietors, partners, franchisees, 10% LLC members and 10% stockholder-employees are excluded only "unless they elect to be covered by a policy of insurance." An owner-operator trucker can likewise participate as a sole proprietor. If an owner wants his or her own work injuries handled under the act, ask the insurer to include that owner on the policy.
Scenarios
An Oklahoma City dental office with one hygienist. The hygienist is an employee, and there's no headcount minimum, so coverage is required.
A family pecan operation near Okmulgee with three workers, all the owner's children. The five-or-fewer relatives exclusion may apply, and agricultural exclusions might too.
A Tulsa real estate brokerage. Commission-paid licensed agents are excluded, but salaried office staff aren't.
A two-owner roofing LLC, each owning 50%, hiring its first laborer. The owners can stay excluded, but the laborer must be covered.
What coverage provides
Workers' comp pays medical care and wage-loss benefits for compensable injuries and, under §5, generally serves as the employee's exclusive remedy against the employer. Learn more in our workers' compensation insurance guide and workers' comp for 1099 contractors.
Bottom line
In Oklahoma, the safest assumption is that any employee needs coverage. The exclusions are specific, so match your facts to the statute's wording rather than rules of thumb.
Contact Alishahi Insurance or call (877) 711-4545. See insurance in Oklahoma and our contractor insurance page.
Frequently asked questions
How many employees before workers' comp is required in Oklahoma?
There's no minimum. The act applies to employers with any employee who isn't specifically excluded.
Do LLC owners need workers' comp in Oklahoma?
LLC members owning at least 10% are excluded unless they elect coverage.
Are family businesses exempt from Oklahoma workers' comp?
Employers with five or fewer employees, all close relatives or household dependents, are excluded.
What is the fine for not having workers' comp in Oklahoma?
Up to $10,000 on criminal conviction, and civil fines up to $1,000 per day, capped at $50,000 for a first violation.
Are real estate agents covered by workers' comp in Oklahoma?
Licensed real estate associates and brokers paid on commission are excluded.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.