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Lookup · 2026

Workers’ comp requirements: every state, and you as the owner

Most states require an employer to carry workers’ compensation insurance from the first employee. Some wait until three, four or five, and Texas leaves it optional for most employers. For a one-owner business the bigger question comes with an S election: once you pay yourself a salary, does your state count you?

Updated October 24, 2026104 official sources

In short

  • Most states require coverage from the first employee.
  • Some start at 3, 4 or 5 employees. Kansas uses payroll, and Wyoming uses the industry.
  • Texas makes coverage optional for most private employers.
  • Owners are treated differently in each state. Many let a corporate officer or LLC member opt out; some leave owners out unless they opt in.

When a business must carry it

Each state sets its own trigger. In most it is one employee, part-time included. Others count to three, four or five, and several apply a lower count to construction. Kansas looks at payroll, Wyoming at the industry, and Texas lets most employers choose.

You as the owner, before and after the S election

As a sole proprietor or the only member of an LLC, you usually aren’t an employee of your own business. After the S election you are on payroll as an officer or member, and the question changes. Some states count corporate officers as employees unless they opt out. Others leave owners out unless they elect coverage. The table gives each state’s rule.

Opting out covers only you. Employees you hire still count under your state’s rule.

Workers’ comp requirements by state

When each state requires coverage, how it treats an owner who is an officer or LLC member, and the official page.

StateRequired whenOwners and officersOfficial page
Alabama5 or more employeesOfficers and LLC members count toward the 5. Each may opt out by filing with the insurer and still counts.Official page
Alaska1 or more employeesMembers and officers owning 10% or more are exempt but may be named on the policy. Owners under 10% are covered.Official page
Arizona1 or more employeesMembers and shareholders owning under 50% are covered. Owners of 50% or more are not, but the carrier may cover them.Official page
Arkansas3 or more employees (fewer in construction)Officers may be excluded through the carrier. LLC members may opt out with a $50 Certificate of Non-Coverage.Official page
California1 or more employeesPaid officers and members are covered; a sole shareholder is not. Managing members and 10% officers with health coverage may waive.Official page
Colorado1 or more employeesOfficers and LLC members are covered. One who owns 10% or more may reject coverage on a state form.Official page
Connecticut1 or more employeesOfficers and LLC members are covered but may elect to be excluded by filing a state form.Official page
Delaware1 or more employeesOfficers and members are covered. Up to 8 may opt out by written agreement and still count as employees.Official page
District of Columbia1 or more employeesThe law gives officers and LLC members no way to opt out. Sole proprietors are not covered.Official page
Florida4 or more employees (1 in construction)Officers and LLC members count toward the 4. Each may file a notice of election to be exempt.Official page
Georgia3 or more employeesOfficers and LLC members are covered and counted. Up to 5 may opt out but still count toward the 3.Official page
Hawaii1 or more employeesExcluded: owners of 50% or more, and unpaid officers owning 25% with no staff. The employer may elect to cover them.Official page
Idaho1 or more employeesWorking LLC members and officers owning 10% or more are exempt. They may elect coverage in writing.Official page
Illinois1 or more employeesOfficers and LLC members may exempt themselves. One opting out of a policy notifies the carrier in writing.Official page
Indiana1 or more employeesOfficers with ownership are covered unless they file an exclusion. LLC members are not covered unless they elect in.Official page
Iowa1 or more employeesOfficers are covered, but up to 4 may reject in writing. LLC members may decline coverage in writing.Official page
KansasPayroll over $20,000 a yearLLC members are excluded. Officers owning 10% or more may opt in or out by election.Official page
Kentucky1 or more employeesOfficers are covered but may reject on a notarized form. Qualified LLC members are exempt; others must be covered.Official page
Louisiana1 or more employeesOfficers and LLC members owning 10% or more may opt out by written agreement with the insurer.Official page
Maine1 or more employeesLLC owners need not be covered. A 20% owner of a corporation may waive coverage in writing.Official page
Maryland1 or more employeesPaid officers and members are covered. Some may opt out in writing, such as members owning 20% or more.Official page
Massachusetts1 or more employeesLLC members need not cover themselves. Officers owning 25% or more may ask the state for an exemption.Official page
Michigan3 or more, or 1 at 35 hours a week for 13 weeksOfficers and manager-members are covered. A 10% owner of a firm with 10 or fewer owners may opt out in writing.Official page
Minnesota1 or more employees25% owner-officers and managers of firms with 10 or fewer owners and under 22,880 payroll hours are excluded. They may elect in.Official page
Mississippi5 or more employeesStockholders owning 15% or more may be exempted in writing, and then do not count toward the 5.Official page
Missouri5 or more employees (1 in construction)Officers and members count toward the 5. Members may opt out with the insurer. One- or two-owner corporations may withdraw.Official page
Montana1 or more employeesWorking members of member-managed LLCs are exempt. Officers and managers can qualify, such as by owning 10%. All may elect in.Official page
Nebraska1 or more employeesOfficers owning 25% or more and full-time LLC members are not covered unless they elect in writing.Official page
Nevada1 or more employeesOfficers and LLC managers are covered once the firm must insure, but an owner may reject coverage in writing.Official page
New Hampshire1 or more employeesA firm whose only workers are 3 or fewer officers or members need not insure. Once insured, up to 3 may opt out.Official page
New Jersey1 or more employeesOfficers count, so a one-officer corporation must insure. LLC members are excluded, but the LLC may elect to cover them.Official page
New Mexico3 or more employees (any number in construction)Officers of a corporation or LLC owning 10% or more may opt out but still count toward the 3.Official page
New York1 or more employeesOne- or two-owner corporations and LLCs with no other workers need not insure. LLC members may opt in.Official page
North Carolina3 or more employeesOfficers count toward the 3 and may exclude themselves. LLC members are not counted but may elect coverage.Official page
North Dakota1 or more employeesOfficers and LLC managers count as employers, not employees. They may buy elective coverage from the state fund.Official page
Ohio1 or more employeesSole-owner corporations with no staff and LLCs taxed as a partnership or sole owner may elect in. Other officers are covered.Official page
Oklahoma1 or more employeesLLC members and stockholders owning 10% or more are not employees unless they elect coverage.Official page
Oregon1 or more employeesMost LLC members are exempt. Officers on the board who own 10% or more are exempt. All may elect coverage.Official page
Pennsylvania1 or more employeesAn LLC whose only workers are members need not insure. Officers are covered unless the state grants an exclusion.Official page
Rhode Island1 or more employeesLLC members are not employees unless under a contract of hire. Most officers are covered unless they file a waiver.Official page
South Carolina4 or more employeesOfficers are covered but may reject coverage by filing a notice with the insurer.Official page
South DakotaNo penalty; uninsured employers can be suedOfficers are covered but may reject in writing. A working owner may buy coverage for themselves.Official page
Tennessee5 or more employees (1 in construction)LLC members are not counted or covered unless they elect in. Full-time officers count but may exclude themselves.Official page
TexasOptional for most employersIf the firm elects coverage, officers are covered. Those with 25% equity may be excluded by endorsement.Official page
Utah1 or more employeesOfficers are covered unless the corporation files an exclusion (up to 5 if it has no other employees).Official page
Vermont1 or more employeesA corporation or LLC may exclude up to 4 officers or members with state approval.Official page
Virginia3 or more employeesA single-member LLC’s member is not covered unless elected. Officers and LLC managers may reject coverage by notice.Official page
Washington1 or more employeesQualifying officers and LLC members are exempt, such as shareholder-directors in daily management. Each may elect coverage.Official page
West Virginia1 or more employeesA corporation may elect not to count its officers. An LLC may elect out up to 4 managers, officers, or members.Official page
Wisconsin3 or more, or 1 paid $500 in a quarterAn LLC with only members and no employees need not insure. Two officers with no other employees may both opt out.Official page
WyomingDepends on industryOfficers and LLC members are exempt unless the business elects coverage for them in writing.Official page
See what an S election would add or save for your business.Profit, state and salary. Two minutes, nothing sent anywhere.
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Sources

Sources: 104 official pages

Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.

An explanation of public rules, not tax advice.

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