Workers' Compensation for Connecticut REITs and Property Managers

Connecticut generally requires employers to secure workers' compensation for employees covered by chapter 568 of the General Statutes, and part-time and full-time employees are covered from the first day of employment, according to the Workers' Compensation Commission (opens in a new tab). For a REIT or property manager, the real question is which entity employs the people working at each property, and whether a contractor relationship meets Connecticut's statutory rules. A property owner can be liable for certain uninsured contractor workers when the conditions in Conn. Gen. Stat. § 31-291 (opens in a new tab) apply. Coverage can come from a licensed insurer, individual self-insurance for an eligible employer, or a group or mutual self-insurance arrangement.

Where workers' compensation fits in a REIT's wider program is covered in REIT insurance, and the Connecticut program as a whole in insurance for Connecticut REITs.

Does a REIT with no Connecticut employees still have a workers' compensation question?

Often it does, because the workers at a property have to be employed by someone. Many REITs own buildings through property-owning entities and use a manager, a taxable REIT subsidiary or outside vendors to supply on-site staff. Whichever entity uses those employees for pay is an employer under the statute, and the statute does not let anyone assume in advance which entity that is for a given arrangement.

Public filings show how much the arrangements differ. NexPoint Residential Trust's 2023 Form 10-K (opens in a new tab) states that its property manager, BH, must maintain workers' compensation insurance covering BH employees at or about each property, while the property-owning entities carry property and liability insurance and name BH as an additional insured. VineBrook Homes Trust's 2022 Form 10-K (opens in a new tab) states that the company maintains workers' compensation insurance for all employees of its manager employed in or about each property. Griffin Capital Essential Asset REIT's 2017 registration filing (opens in a new tab) states that its property manager or sub-property manager hires and directs the people who run the properties, from on-site managers to building and maintenance staff.

Those are three companies' arrangements. They do not classify anyone's workers or decide which entity must carry coverage at a Connecticut property, and a management agreement that assigns the obligation does not change who the statute treats as the employer. Start by listing every entity that uses workers at each building.

Who counts as an employer and an employee?

Connecticut's definitions are broad. Under Conn. Gen. Stat. § 31-275 (opens in a new tab), an employer is "any person, corporation, limited liability company, firm, partnership, voluntary association, joint stock association, the state and any public corporation within the state using the services of one or more employees for pay." An employee is generally a person who has entered into or works under a contract of service or apprenticeship with an employer, subject to the exclusions the section lists.

The duty to insure follows from those definitions. Each employer subject to chapter 568 must provide compensation for its employees by securing insurance or qualifying as a self-insurer under § 31-284 (opens in a new tab). There is no minimum headcount in the Commission's description: one part-time employee counts from the first day. The one-employee rules in other states are compared in do I need workers' comp for one employee.

Are superintendents, maintenance workers, leasing staff and porters employees?

Job titles do not decide status. Chapter 568 has no general property-management exception for superintendents, maintenance workers, leasing staff or porters; each person's status depends on the statutory employment relationship and any exclusion that fits.

One exclusion comes up with resident staff. Section 31-275 (opens in a new tab) excludes a person engaged in service in or about a private dwelling who is not regularly employed by the owner or occupier for more than 26 hours a week. That exclusion is written for private dwellings and should not be stretched automatically to a commercial apartment or office property.

Contractor labels settle nothing either. A contract, an invoice, an LLC or a 1099 form does not by itself establish independent-contractor status, and worker classification is technical and complex, according to the Connecticut Department of Labor's misclassification FAQ (opens in a new tab). The Department of Labor's unemployment analysis uses the ABC test, under which the business must show all three: the worker is free from direction and control in performing the service, under the contract and in fact; the service is outside the usual course of the business or outside all of its places of business; and the worker is customarily engaged in an independently established trade of the same nature. The Department of Labor also states that the Workers' Compensation Commission considers other factors for a workers' compensation claim, so the two agencies do not use one test for every purpose.

When can a property owner be responsible for a contractor's workers?

Section 31-291 (opens in a new tab) sets the principal-employer rule. When a principal employer procures work through a contractor or subcontractor, the work is part or process of the principal employer's trade or business, and it is performed on premises under the principal employer's control, the principal employer is liable to pay compensation as if the work had been done without the contractor.

That rule has conditions. It does not make every property owner responsible for every vendor's employees; the work, the business, the premises, the control and the relationships all have to be analyzed. A roofing crew replacing a membrane and a porter service cleaning common areas can come out differently.

A certificate of insurance is evidence of stated coverage, but it does not decide worker status or remove principal-employer liability by itself. The Commission's Coverage Verification Service (opens in a new tab) checks whether a business has workers' compensation coverage and shows basic policy information. Insurers or agents may charge fees for an uninsured contractor under § 31-291 (opens in a new tab), according to the Workers' Compensation Commission (opens in a new tab). Check contractor coverage before work starts and again at each renewal.

Can an owner, officer, partner or LLC member opt out?

Some can, by filing. A sole proprietor must accept the Workers' Compensation Act to be treated as an employer for insurance purposes, using Form 75 to elect inclusion. A corporate officer or an LLC manager who wishes to be excluded files Form 6B, and all members of a partnership who wish to be excluded file Form 6B-1, according to the Commission's coverage election forms (opens in a new tab). The Commission also offers an electronic Form 6B process.

An exclusion exists only when it is filed. A contract, payroll treatment or informal statement does not create one, and § 31-275 (opens in a new tab) contains further special rules for particular corporate officers and nonresidents. Confirm which category fits each person and entity before relying on an exclusion.

What happens if required coverage is missing?

Connecticut's penalties are set in § 31-288 (opens in a new tab). After an administrative law judge finds an employer out of compliance, the civil penalty is not less than $500 per employee or $5,000, whichever is less, and not more than $50,000. An additional $100 a day applies for each day after the finding that the employer stays out of compliance, capped at $50,000 in the aggregate. Penalties are paid to the Second Injury Fund, and failure to pay within 90 days can lead to a civil action for double the penalty.

Criminal exposure attaches to people, not just entities. A knowing and wilful failure to comply is a class D felony for the owner of a sole proprietorship, a partner, an LLC principal or a corporate officer. An employer that fails to meet the insurance requirement, or that knowingly misrepresents employees as independent contractors or gives an insurer false employee information to lower its premium, is also subject to a stop-work order from the Labor Commissioner. The penalty provisions were substantially amended by Public Act 95-277, effective July 1, 1995, with later amendments since.

An uninsured employer can also be personally liable for compensation owed under the Act, depending on the facts.

Can a Connecticut employer self-insure?

Yes, with approval. Connecticut permits individual self-insurance and group or mutual self-insurance. An employer seeking an exemption from commercial insurance applies to the Commission's chairperson or designee, and Regulation § 31-284-2 (opens in a new tab) requires workers' compensation insurance to stay in force during the application and until self-insurance authorization takes effect.

The self-insurance application (opens in a new tab) requires satisfactory proof of solvency and the financial ability to pay benefits and assessments, and the employer takes on paying claims and the added administrative work. Section 31-284 (opens in a new tab) requires security for assessments unless the employer meets its financial requirements; that security can be filed with the Insurance Commissioner, provided through an authorized insurer, or combined as the Commissioner approves. The Commission reviews applications within its role, while the Connecticut Insurance Department licenses group or mutual self-insurance organizations.

What benefits and reporting duties apply?

Connecticut workers' compensation is a no-fault system. Benefits can include reasonable and necessary medical treatment, temporary total disability under § 31-307 (opens in a new tab), temporary partial and permanent partial disability and specific indemnity under § 31-308 (opens in a new tab), and death and dependent benefits under § 31-306 (opens in a new tab).

Benefit rates change every October 1. For injuries on or after October 1, 2024, the maximum weekly compensation rate was $1,654, according to the Commission's fiscal year 2025 annual report (opens in a new tab). For injuries from October 1, 2025 through September 30, 2026, the Commission's 2025 to 2026 benefit table (opens in a new tab) sets the maximum weekly benefit at $1,716 and the minimum at $343.20, which is 20% of the maximum, subject to the statutory wage limit. A new table took effect October 1, 2026 under Memorandum No. 2026-05, so use the benefit rate table (opens in a new tab) for the injury date.

Reporting runs on its own clock. Employers must post the required notice of workers' compensation coverage and give employees the information § 31-284 (opens in a new tab) requires. Under § 31-294b (opens in a new tab), employers send the Commission reports of injuries covered by its rules, with notices of claims, weekly or more often if directed, and duplicates go to the Labor Commissioner. Once the first report is submitted, the Commission must give the injured employee a Form 30C within five business days. Under § 31-294c (opens in a new tab), written notice of a claim is generally due within one year of the accident or three years from the first symptom of an occupational disease, with separate timing for death claims.

What does the Second Injury Fund assessment add?

The Second Injury Fund, run by the State Treasurer, is financed by assessments on Connecticut employers, according to the Office of the State Treasurer (opens in a new tab). Insured employers pay through a surcharge on their workers' compensation policies based on direct written premium. Self-insured employers pay based on the prior calendar year's paid medical and indemnity losses.

For fiscal year 2026, four assessments totaled $24 million for insured employers and $4.9 million for self-insured employers, $28.9 million combined. For fiscal year 2027, the assessment rate stays at 2.25% for insurers and is 2.75% for self-insured employers. The Fund also handles transferred claims, uninsured-employer claims, cost-of-living adjustments and certain multi-employer claims, according to its FAQ (opens in a new tab); its assessment authority is in § 31-354 (opens in a new tab).

Which agency handles what, and what is the Assigned Risk Plan?

Two state agencies split the work. The Workers' Compensation Commission handles claims, disputes, forms, employer resources, self-insurance approval and coverage verification, and it does not sell insurance or oversee insurers. The Connecticut Insurance Department handles insurers, producers, policies, rates, filings and insurance complaints, according to its workers' compensation page (opens in a new tab).

When no insurer will write an account voluntarily, the Connecticut Workers' Compensation Assigned Risk Plan, administered by NCCI, is the route the Insurance Department identifies on that page. A producer's license gives authority to solicit, negotiate or sell specified lines, according to the Department's producer licensing page (opens in a new tab), so check the agency and the individual on the Connecticut insurance license lookup (opens in a new tab).

What to ask the agency

Bring the entity chart, the management agreements, payroll by location and the contractor list, and ask:

• Which legal entity is named as the employer, and does that match who actually employs the property staff?
• Which Connecticut locations and payroll classes are included, and are all property-level workers covered?
• How are maintenance, leasing, porter, superintendent and temporary workers treated?
• What payroll and subcontractor records will the audit require?
• How will contractor certificates and coverage be verified, and what happens if a contractor's policy expires mid-job?
• Are any officers, LLC members or partners excluded, and are the forms on file?
• Is the insurer licensed in Connecticut, and is assigned-risk placement available if voluntary placement is not?
• Who files First Reports of Injury, and what do the employer and insurer each handle on a claim?
• What self-insurance alternatives are legally available for this group of entities?

Tenants' own workers' compensation obligations, and what a lease can require of them, are in tenant insurance requirements for Connecticut REIT leases. The other policies a Connecticut employer commonly carries are in Connecticut small business insurance.

Frequently asked questions

When does Connecticut workers' compensation coverage begin?

Part-time and full-time employees are covered from the first day of employment, according to the Workers' Compensation Commission. There is no waiting period based on hours or headcount.

Does a 1099 worker count as an independent contractor in Connecticut?

Not automatically. The Department of Labor calls classification technical, uses the ABC test for unemployment, and notes that the Workers' Compensation Commission weighs other factors for a claim.

Can a property owner be liable for a contractor's injured worker?

Yes, when § 31-291 (opens in a new tab)'s conditions are met: the work is part or process of the owner's trade or business and is performed on premises under its control. A certificate from the contractor does not remove that liability by itself.

Can an LLC member or corporate officer be excluded?

A corporate officer or LLC manager can elect exclusion with Form 6B, and partnership members with Form 6B-1. The exclusion exists only once the filing is made under the Commission's process.

What is the penalty for failing to secure coverage?

Section 31-288 (opens in a new tab) sets a civil penalty of at least $500 per employee or $5,000, whichever is less, up to $50,000, plus $100 a day after a noncompliance finding, capped at $50,000. Knowing and wilful failure is a class D felony for the responsible individual.

Your next step

List every entity that uses workers at each Connecticut property, gather the management agreements and contractor certificates, and take the questions above to a licensed agency. You can find agencies by city and category in the Riskado directory of Connecticut insurance agencies.