Question
Do I need workers' comp if I have only one employee?
Short answer
In most states, yes: workers' compensation is required as soon as you hire your first employee. A few states only require it above a small number of employees, and Texas lets most employers opt out.
What the rules usually look like
- Most states require coverage from the first employee, part-time workers included.
- Some states only require it once you have a few employees, and some have stricter rules for construction work.
- Owners, partners and LLC members can often leave themselves out, but the rules vary.
- Independent contractors usually don't count, but states look at how the work is actually done, not what the contract calls it.
Check your state's workers' compensation agency for the exact threshold. Going without required coverage can bring fines and leave you paying an injured worker's costs yourself.
What it pays
Workers' compensation pays an injured employee's medical bills and part of their lost wages, whoever was at fault. Most policies also include employer's liability, which covers you if an employee sues over a work injury.
This is general information about how US policies usually work. Your own policy's wording and your state's rules decide the details.