Short answer: Virginia requires workers' compensation insurance for employers that regularly employ more than two employees, full- or part-time, according to the Virginia Workers' Compensation Commission. In practice, that means three or more. Contractors must count their subcontractors' employees toward the total. Employers below the threshold can buy coverage voluntarily.
The rule
The Virginia Workers' Compensation Commission says employers with more than two full-time or part-time employees must carry workers' compensation insurance. Va. Code §65.2-800 requires covered employers to insure payment of compensation through an insurer or approved self-insurance.
Counting employees
The Commission's employer information sheet explains a few points:
- Part-time workers count. Three part-time employees meet the threshold.
- "Regularly" matters. The test looks at your regular workforce, not only who's on payroll today.
- Subcontractor employees count for contractors. A general contractor counts the employees of its subcontractors when deciding whether it must carry coverage, even if those subcontractors have their own policies.
The contractor rule surprises many small builders. A remodeler with two employees who regularly uses a subcontractor with three workers can be over the threshold.
Statutory employer liability
Virginia law can make an owner or general contractor the "statutory employer" of a subcontractor's injured worker when the subcontractor is uninsured. That's why general contractors ask for certificates of insurance and why many keep coverage even when they're near the threshold.
What happens without coverage
The Commission's Insurance Department checks employer compliance. Employers that fail to insure can face civil penalties assessed by the Commission, and willful failure can carry criminal penalties. An injured worker of an uninsured employer can pursue benefits from the employer directly, and the Uninsured Employer's Fund may pay in some cases and then seek reimbursement from the employer.
Buying coverage in Virginia
Virginia has a private market. Businesses that can't find a voluntary policy can use the Virginia assigned risk plan. Large employers may self-insure with Commission approval, and some industries use group self-insurance associations.
What workers' comp pays
Benefits include medical treatment, a portion of lost wages, permanent partial disability benefits and death benefits for job-related injuries and illnesses. Employer's liability coverage (Part Two) responds to certain lawsuits tied to workplace injuries. See our workers' compensation insurance page.
Posting and reporting
Virginia employers must post a notice of compliance where employees can see it and report qualifying workplace injuries. Your insurer typically handles the filing with the Commission once you report the injury.
Below the threshold
Businesses with one or two employees aren't required to carry coverage, but many buy it anyway. Without it, an injured employee can sue the business directly, and clients, landlords and general contractors often require proof of workers' comp before signing a contract. A voluntary policy also avoids a scramble the day you hire a third worker, since coverage generally isn't retroactive.
Common scenarios
You run a bakery with two full-time employees and hire a part-time weekend worker. That's three. You need coverage.
You're a general contractor with one employee who regularly hires a framing subcontractor with four workers. The subcontractor's employees count toward your total.
Your subcontractor's policy lapses and a worker is hurt. You could be treated as the statutory employer. Collect certificates and verify them.
Key terms
- More than two employees: Virginia's threshold, meaning three or more regular employees.
- Statutory employer: an owner or contractor who can be responsible for a subcontractor's uninsured workers.
- Uninsured Employer's Fund: a fund that can pay benefits when an employer is uninsured.
- Assigned risk plan: coverage of last resort for employers that can't buy in the voluntary market.
Questions to ask your broker
- Do my subcontractors' employees push me over the threshold?
- How should I verify subcontractor certificates?
- Should owners or officers be covered?
- Are my classification codes correct?
Bottom line
In Virginia, three or more regular employees, including part-timers and, for contractors, subcontractor employees, triggers the requirement. Track your count carefully and collect certificates from every subcontractor.
Contact Alishahi Insurance or call (877) 711-4545. See insurance in Virginia and our business owners policy (BOP) guide.
Frequently asked questions
Is workers' comp required in Virginia?
Yes, for employers that regularly employ more than two full- or part-time employees.
Do part-time employees count in Virginia?
Yes. Part-time employees count toward the threshold.
Do subcontractor employees count?
For contractors, yes. Subcontractor employees count toward the contractor's total.
What is a statutory employer?
An owner or contractor who may be responsible for benefits when a subcontractor's injured worker is uninsured.
What happens if a Virginia employer doesn't carry required coverage?
The Commission can assess civil penalties, and willful failure can carry criminal penalties.
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.