Short answer: Most states require private employers to carry workers' compensation starting with the first employee. Some set higher thresholds, such as three, four or five employees, often with lower counts for construction. Texas lets most private employers opt out, South Dakota doesn't require it, and Ohio, Washington, North Dakota and Wyoming require coverage through a state fund.
How to use this table
Each row summarizes when a private employer must carry coverage, whether the state is monopolistic (state fund only), and one rule worth knowing. Every "Details" link goes to our article for that state, which cites the state's official workers' comp agency or statute. Rules have exceptions for owners, farms, domestic workers and contractors, so read the state article before you decide. Free to cite or embed with a link back to this page. A CSV download is available.
| State | When coverage is required | Monopolistic state fund | Key rule | Source article |
|---|---|---|---|---|
| Alabama | 5 or more regular employees | No | Officers and LLC members count; new single-family home builders not exempt under five | Details |
| Alaska | 1 employee | No | No state fund; no reciprocity; penalties up to $1,000 per employee per day | Details |
| Arizona | 1 employee (regularly employed) | No | Employees may reject coverage in writing before injury | Details |
| Arkansas | 3 employees (2 in building trades; 1 for contractors that subcontract) | No | Owners, part-timers and volunteers count | Details |
| California | 1 employee | No | Labor Code §3700; applies to part-time employees | Details |
| Colorado | 1 employee | No | Fines up to $500 per day plus 25% penalty on claims | Details |
| Connecticut | 1 employee | No | Stop-work orders for missing coverage or misclassification | Details |
| Delaware | 1 employee | No | Part-time, seasonal and temporary workers covered | Details |
| District of Columbia | 1 employee | No | Domestic workers at 240 hours in a calendar quarter | Details |
| Florida | 4 employees (1 in construction; 6 regular or 12 seasonal on farms) | No | Non-exempt officers and LLC members count | Details |
| Georgia | 3 or more regular employees | No | Officers and LLC members count toward three | Details |
| Hawaii | 1 employee | No | Employees cannot pay any part of the premium | Details |
| Idaho | 1 employee | No | Coverage must be in place before the first hire | Details |
| Illinois | 1 employee | No | Part-time and family members on payroll included | Details |
| Indiana | 1 employee | No | Clearance certificates for uncovered construction contractors | Details |
| Iowa | 1 employee | No | Willfully operating uninsured is a class D felony | Details |
| Kansas | Gross annual payroll over $20,000 | No | Family-member wages don't count; agriculture exempt | Details |
| Kentucky | 1 employee | No | Family, temporary and part-time workers count | Details |
| Louisiana | 1 employee | No | Fines up to $250/$500 per employee, capped at $10,000 | Details |
| Maine | Every private employer | No | Domestic and farm exceptions require liability coverage | Details |
| Maryland | 1 employee | No | Penalties up to $25,000, then up to $25,000 more | Details |
| Massachusetts | 1 employee, any hours | No | Domestic workers at 16 hours a week; $100+/day stop-work fines | Details |
| Michigan | 3 at one time, or 1 working 35+ hrs/week for 13+ weeks | No | Separate farm and household tests | Details |
| Minnesota | 1 employee | No | Penalties up to $1,000 per employee per week | Details |
| Mississippi | 5 or more regular employees | No | Certain nonprofits exempt | Details |
| Missouri | 5 employees (1 in construction) | No | Corporate officers count | Details |
| Montana | 1 employee | No | Choose Plan 1, 2 or 3 (Montana State Fund) | Details |
| Nebraska | 1 employee | No | Farm test: 10 employees for 13 weeks | Details |
| Nevada | 1 employee | No | Fines up to $15,000; casual exemption never applies to construction | Details |
| New Hampshire | 1 employee (before hiring) | No | Small owner-only corporations/LLCs may skip until a 4th officer or any employee | Details |
| New Jersey | 1 employee | No | Disorderly persons offense; up to $5,000 per 10 days | Details |
| New Mexico | 3 employees (1 for CID-licensed construction) | No | Farms and ranches follow the three-employee rule | Details |
| New York | Virtually all employers | No | NYSIF must insure any applicant not owing it money | Details |
| North Carolina | 3 or more regular employees | No | 1 employee for radiation work; 10 full-time farm workers | Details |
| North Dakota | 1 employee | Yes (WSI) | Private insurers can't write it | Details |
| Ohio | 1 employee | Yes (BWC) | Stop gap employer's liability bought separately | Details |
| Oklahoma | 1 employee | No | Failing to secure coverage is a misdemeanor | Details |
| Oregon | 1 employee | No | Uninsured penalties start at twice the missed premium | Details |
| Pennsylvania | 1 employee | No | Excluded only if every worker falls in a listed category | Details |
| Rhode Island | 1 employee | No | $1,000/day fines; felony for going uninsured | Details |
| South Carolina | 4 or more regular employees | No | Exempt if prior-year payroll under $3,000 | Details |
| South Dakota | Not required | No | Uninsured employers lose the Act's protections | Details |
| Tennessee | 5 employees (1 in construction) | No | Construction owner exemption registry | Details |
| Texas | Optional for most private employers | No | Non-subscribers file DWC Form-005 and lose key defenses | Details |
| Utah | 1 employee | No | Owners without employees can apply for a waiver | Details |
| Vermont | 1 employee | No | $50–$150 per day penalties | Details |
| Virginia | More than 2 regular employees (3+) | No | Contractors count subcontractors' employees | Details |
| Washington | 1 employee | Yes (L&I) | Private insurers can't sell standard coverage | Details |
| West Virginia | Regular employers, with listed exemptions | No | Farms with 5 or fewer full-time employees may elect out | Details |
| Wisconsin | 3 employees, or $500 wages in a quarter | No | Farms at six workers on 20 days | Details |
| Wyoming | Extrahazardous industries only | Yes (state division) | Required employers can't buy private or self-insure | Details |
Patterns across states
- One employee is the most common trigger. A part-time or family employee usually counts.
- Construction is treated more strictly. Several states with higher general thresholds require construction employers to insure from the first employee.
- Owners are handled separately. Many states let sole proprietors, partners, LLC members or qualifying officers exclude themselves, but never their employees.
- Out-of-state work matters. Sending employees into another state can require that state on your policy (Item 3A) or a monopolistic-state policy.
Methodology
Compiled October 13, 2026 from our state-by-state articles, each checked against the state agency's employer pages or statute text on the date shown in that article. This is a summary, not legal advice. Thresholds and penalties change, so confirm with the state agency. See our workers' compensation insurance overview.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance by state.
Frequently asked questions
Which states don't require workers' comp?
Texas lets most private employers opt out, and South Dakota has no law requiring it. Wyoming requires it only for listed extrahazardous industries.
Which states are monopolistic for workers' comp?
Ohio, Washington, North Dakota and Wyoming require coverage through a state fund instead of private insurers.
Which states require coverage with one employee?
Most states, including California, New York, Pennsylvania, Illinois, Colorado, Massachusetts and New Jersey. See the table for each state.
Do construction businesses have lower thresholds?
Often yes. Florida, Missouri, Tennessee, New Mexico and Arkansas use lower counts for construction.
Do part-time employees count?
In most states yes. Check each state's article for how part-timers, officers and family members count.
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.