Workers' Compensation Insurance Requirements

The Workers’ Disability Compensation Act (WDCA) requires that employers that meet the following criteria must carry workers’ compensation insurance:

a.  All private employers regularly employing 1 or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks.

b.  All private employers regularly employing 3 or more employees at one time. (This includes part-time employees.)

c.  Agricultural employers if they employ 3 or more employees 35 hours or more per week for 13 or more consecutive weeks.

d.  Householders employing domestic servants if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks.

e.  All public employers

An employee is any person in the service of another, under any contract of hire, express or implied.  A partner is considered an employee of the partnership, a corporate officer is considered an employee of the corporation, and a member who is a manager is considered an employee of a limited liability company.

A sole proprietor (self-employed individual) working in his or her sole proprietorship is never an employee of that business.  

The WDCA provides employers three different methods to comply with its insurance mandate. Compliance may be achieved by purchasing insurance, self-insuring, or properly executing an exclusion form. In addition, any employer not meeting the above-criteria may voluntarily assume the liability for compensation and benefits imposed by the WDCA. This flexibility ensures that coverage is available only where it is needed.  For a more detailed explanation of workers’ compensation insurance requirements for businesses, refer to the Employer Insurance Requirements publication and the Frequently Asked Questions for Employers found on the Workers’ Compensation Agency website.

Compliance with WDCA coverage requirements is essential for providing protection to both employees and employers. Employers are advised that the failure to comply with coverage requirements could result in prosecution and financial penalties.