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Workers' Compensation Insurance Requirements

Find out if you need to have workers’ compensation insurance for your employees, who can get an exemption, and what fines you face for not having coverage for your business.

Table of Contents

Who must have insurance

All employers operating in Massachusetts are required to carry workers’ compensation insurance for their employees and themselves if they are an employee of their company.

The requirement applies no matter the number of hours worked or the number of employees.

The only exception is for domestic employees who must work at least 16 hours a week to be covered under a workers’ compensation policy.

Please be advised that workers' compensation and liability insurance ARE NOT the same thing.

Workers' Compensation Insurance Rates and Codes

The Department of Industrial Accidents DOES NOT establish workers' compensation insurance rates and classification codes. The information can be found visiting the Workers' Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA) website and the Division of Insurance (DOI) website.

Who isn't required to have insurance

  • Members of a limited liability company (LLC), partners of a limited liability partnership (LLP), or sole proprietors of an unincorporated business aren’t required to carry workers' compensation insurance for themselves
  • This exemption does not apply to employees who are not members of the LLC or LLP. They must still be covered.
  • If they want coverage, members, partners, or sole proprietors should contact an insurance broker

Who can file for an exemption

  • Corporate officers who own at least 25% interest in the corporation can request an exemption from workers’ compensation coverage
  • This exemption does not apply to employees who are not corporate officers. They must still be covered.

Additional Resources

Out-of-state employers operating in Massachusetts

Out-of-state employers operating in Massachusetts must provide workers’ compensation coverage for all employees working in the Commonwealth.

Employers whose existing workers’ compensation insurance policies list Massachusetts in section 3A of the policy’s information page satisfy this requirement.

Employers whose workers’ compensation policies list Massachusetts in section 3C regarding all states coverage (with or without certain state exclusions) must get proof from their insurance carrier that coverage is provided in Massachusetts by having their workers' compensation insurer submit a Form 154 - Verification of Workers' Compensation Coverage for Out-of-State Employers Operating in Massachusetts.

Additional Resources

If you don’t have workers’ compensation insurance

The Department of Industrial Accidents’ (DIA) Office of Investigations will issue a stop work order (SWO) to employers who don’t have workers’ compensation insurance.

Minimum fines are $100 per day, including weekends and holidays, beginning on the date the SWO was issued. Fines accrue daily until insurance coverage starts AND the fine is paid.

  • If you do not appeal the SWO, your business must close down immediately and remain closed until proof of coverage has been provided to the DIA and the fines have been paid
  • If you appeal your SWO, then the fines go up to $250 per day and your business can remain open

Employers issued SWOs may be subject to criminal charges, including up to 1 year in prison and/or up to a $1,500 fine upon conviction.

Uninsured employers are also subject to debarment from public contracts for 3 years.

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