Workers' comp exemption: checking your state's rule

Why this page does not give you the answer

You came here for a table of states with a yes or a no in each row. We are not going to publish one, and the reason matters: those rules are statutes, they differ in ways a single column cannot hold, and they change. A table like that is confidently wrong somewhere the day it ships, and nothing about it tells you which row went stale.

What does not change is the shape of the question, and where the answer lives. So this page covers the first and points at the second.

The shape of the question, everywhere

Nearly every state requires workers' compensation once a business has employees. The exception almost always concerns the owner — a sole proprietor, a partner, and in many states a corporate officer or LLC member may elect not to cover themselves. Three things follow from that, and they hold broadly even though the details do not:

• It covers the person, not the business. An owner who is exempt is exempt for themselves. Their employees are a separate question with a different answer.
• It ends when they hire. The most common way an exemption stops being true is that the sub brought a crew — and nobody thinks to revisit the paperwork when they do.
• Some states issue a document; others do not. Where one exists, that document is what you collect. Where none exists, what you can hold is a certificate showing coverage — which is why an exemption you cannot evidence is a problem at audit even when it is entirely genuine.

The definitional side of this — what an exemption is, and what to do when a sub claims one — is on workers' comp exemption. What it costs you months later is on what your insurance auditor will ask for.

Where to check, by state

The agency below is the authority for that state. Its page is current by definition, which is the property no table on this site can offer. If your state is not listed, search for your state's name plus ‘workers compensation’ — the authority is a state agency, not a commercial site, and it is the one worth reading.

Texas, which is genuinely different

Texas is worth calling out because advice written elsewhere does not transfer. It is the one state where private employers may generally opt out of the workers' compensation system altogether rather than qualifying for a narrow exemption — so a Texas sub without coverage may be entirely lawful, and the protections you would normally rely on work differently as a result. If you contract in Texas, read the state's own employer material rather than a national summary. If you do not, be careful with advice that turns out to have been written for Texas.

What to collect either way

1. 1Ask the question in writing, and ask for the basis: which state, and on what grounds.
2. 2Ask for the state's document if their state issues one, rather than accepting a statement.
3. 3Note the date you verified it and what you saw. An exemption is a point-in-time fact, and the thing that changes it — hiring — is invisible to you.
4. 4Re-ask when the job changes. A sub who arrives alone and returns with two people is a different question, not the same one.
5. 5If they hire, expect coverage plus the waiver. The workers' comp waiver of subrogation in your favor is endorsement WC 00 03 13, a separate document their carrier adds — see waiver of subrogation.

None of this is legal advice, and where a decision turns on the statute the right next call is your own counsel or your broker — not a page on a software company's website, including this one.