Do I Need Workers' Comp for One Employee: State Rules, Exemptions, and Covering Yourself

Whether you need workers' compensation for one employee depends on your state, your industry, the worker's legal status and how your business is set up. Some states require coverage from the first employee. California requires it even with only one employee, and New York makes it mandatory for most employers with one or more employees. Florida requires it from the first employee in construction but generally at four or more employees in other businesses. Texas lets most private employers opt out, with notice and reporting duties. Part-time, family, temporary and so-called independent workers may still count under your state's rules, so check that rule before the person starts work.

What workers' comp does

Workers' compensation is generally a no-fault system that pays benefits set by law for work-related injuries and occupational illnesses, such as medical care, rehabilitation, lost wages, and death or funeral benefits, according to the NAIC (opens in a new tab). A standard policy pairs it with employers' liability insurance, which addresses the employer's legal liability for employee injury claims that fall outside the workers' comp benefit system, subject to the policy and the law that applies.

Most private-sector rules come from the states. The U.S. Department of Labor (opens in a new tab) keeps a directory of state workers' compensation agencies and runs federal programs for specific groups, including federal employees under the Federal Employees' Compensation Act and certain maritime workers under the Longshore and Harbor Workers' Compensation Act (opens in a new tab). A general liability policy does not replace workers' comp, since workers' comp is the statutory benefit obligation to your employees.

State rules for a first employee

Each rule below belongs to the named state only. As of October 2, 2026:

• Connecticut: Nearly all workers are covered regardless of business size, length of employment or daily hours, and employers must carry coverage with limited exceptions, according to the Connecticut Workers' Compensation Commission (opens in a new tab). Full-time and part-time employees are covered from the first day of employment, according to the Commission's information packet (opens in a new tab).
• New York: Coverage is mandatory for most employers with one or more employees. Most people working under the employer's direction and control must be covered, including part-time, temporary, seasonal, casual, leased, borrowed, unpaid and family workers, subject to specific exclusions, according to the New York Workers' Compensation Board (opens in a new tab).
• Florida: Construction employers with one or more employees must carry coverage, counting corporate officers and LLC members. Non-construction employers generally must carry it at four or more employees, also counting corporate officers and LLC members, according to the Florida Division of Workers' Compensation (opens in a new tab).
• Texas: Private employers may choose whether to carry workers' comp. One that does not is a "nonsubscriber" and must give notices to employees and file notices with the state, according to the Texas Department of Insurance (opens in a new tab).
• California: Employers must have workers' comp insurance even with only one employee, according to the California Division of Workers' Compensation (opens in a new tab).
• Massachusetts: All employers must cover their employees regardless of hours, with exceptions that include certain domestic service arrangements, unpaid nonprofit staff, and qualifying corporations whose officer-directors own at least 25% and waive benefits, according to Mass.gov (opens in a new tab).
• Pennsylvania: Coverage is mandatory for an employer with at least one employee who could be injured or develop an occupational disease in Pennsylvania, unless all workers fall under an exclusion, according to the Pennsylvania Department of Labor and Industry (opens in a new tab).
• New Jersey: A sole proprietorship must carry coverage when anyone other than the principal owner performs services for pay. Partnerships and LLCs must carry it when anyone other than a partner or member performs services for pay, according to the New Jersey Department of Labor (opens in a new tab).

If your state is not listed, the Department of Labor's directory (opens in a new tab) points you to your state's workers' comp agency. For state-by-state business coverage, the Riskado guides for Connecticut, New York, Massachusetts, New Jersey and Pennsylvania cover more of what a business in those states carries.

Does your worker count as an employee?

Hours, pay schedule and family ties often do not take someone out of the count. In Connecticut and New York, part-time workers are covered. In New York, family members providing services to a for-profit business are treated as employees, subject to specific farm and household rules, according to the New York Workers' Compensation Board (opens in a new tab). In Massachusetts, family members who are employees must be covered, according to Mass.gov (opens in a new tab).

Some workers are excluded in some states. Examples include domestic workers below an hours threshold, certain agricultural workers, casual laborers doing limited household work, certain family members of a sole proprietor or farmer, some commission sales workers under written contracts, volunteers in specific situations, and workers covered by federal programs. New York sets its own rules for domestic workers, farm workers, family members, casual laborers and corporate owners. Massachusetts lists exceptions for specified sales workers, seamen, federally covered workers and certain domestic workers. Each exclusion belongs to its own state, so check yours before you rely on one.

Independent contractors

A 1099 or a contract that says "independent contractor" does not settle the question. How a worker is classified depends on the governing law and the facts, according to the U.S. Department of Labor (opens in a new tab). State agencies look at the real relationship, such as who directs and controls the work, who supplies the tools, and whether the worker runs an independent business.

• New York: An employee is a person performing services under the employer's supervision, direction and control. Many alleged subcontractors are later treated as employees, and general contractors commonly require proof of workers' comp coverage, according to the Workers' Compensation Board (opens in a new tab).
• Massachusetts: Independent-contractor status is a question of fact under a three-part test: freedom from control, work outside the usual course of your business, and an independently established trade or business, according to Mass.gov (opens in a new tab).
• Texas: An independent contractor generally is not an employee under the Texas Workers' Compensation Act, but the actual facts and control can produce more than one employer, according to the Texas Department of Insurance (opens in a new tab).

A certificate of insurance from a subcontractor shows that the stated coverage exists. It does not by itself settle whether the worker is your employee.

Covering yourself as an owner

If you work alone, you generally do not have an employee-triggered obligation, but each state treats owners differently, and hiring someone can change your position.

• Connecticut: Sole proprietors must accept the Workers' Compensation Act to be treated as an employer for insurance purposes. Corporate officers, LLC members and partners may elect to be excluded. The filings involved include Forms 6B, 6B-1 and 75, according to the Workers' Compensation Commission (opens in a new tab).
• New York: Sole proprietors without employees do not have to carry coverage but may cover themselves. LLC members or partners without employees generally are not employees for coverage purposes but may cover themselves. Qualifying one- or two-person corporations can be exempt when the owners hold all stock and offices and have no other workers, according to the Workers' Compensation Board (opens in a new tab).
• Florida: Construction employers must count corporate officers and LLC members. Non-construction sole proprietors and partners are not employees unless they elect to be included by filing Form DWC-251, according to the Florida Division of Workers' Compensation (opens in a new tab).
• Massachusetts: Sole proprietors and partners may elect coverage, and eligible corporate officers and directors can use Form 153 to be excluded, under 452 CMR 8.00 (opens in a new tab).

Ask your agent whether including yourself is required, allowed or neither in your state, and which form records your choice.

Can an employer choose not to carry workers' comp?

In every other state in the table above, coverage is required once that state's threshold applies. Where a state does let private employers opt out, the choice comes with its own notice and filing duties, set by that state's law. For example, a Texas "nonsubscriber" must post and give new employees written notice of no coverage, file notice with the Texas Division of Workers' Compensation each year between February 1 and April 30, after hiring the first employee and after ending a policy, and report certain work-related injuries, according to the Texas Department of Insurance (opens in a new tab). A Texas employer that opts out also gives up the system's usual protection against employee lawsuits and may be sued by its employees.

Before you rely on an opt-out, ask your state's workers' comp agency, listed in the Department of Labor's directory (opens in a new tab), whether your business qualifies and which notices the choice requires.

What happens if required coverage is missing

Penalties are set by each state. Examples as of October 2, 2026:

The cost of an injury can come on top of the penalty. An uninsured New York employer may be liable for the injured worker's medical expenses and lost wages, according to the Workers' Compensation Board (opens in a new tab). In Connecticut, misrepresenting employees as independent contractors can also bring felony and stop-work consequences under Chapter 568 (opens in a new tab).

Where a small employer can buy coverage

The routes depend on your state:

• Private workers' comp insurers, through an agent, a broker or a direct writer.
• A state insurance fund. New York lists private carriers, the State Insurance Fund and self-insurance as its options, according to the Workers' Compensation Board (opens in a new tab). California employers who cannot get coverage in the market can contact the State Compensation Insurance Fund, according to the California Department of Insurance (opens in a new tab).
• Assigned-risk or residual-market programs when regular coverage is not available.
• Monopolistic state funds in states such as North Dakota, Ohio, Washington and Wyoming, according to the NAIC (opens in a new tab). In Washington, private workers' comp coverage is not available, and employers generally use the State Fund or approved self-insurance, according to Washington Labor and Industries (opens in a new tab).
• Individual or group self-insurance, when the state approves the employer and its financial requirements are met.

Some insurers or administrators offer pay-as-you-go billing; ask directly whether it is available to you and on what terms.

Checking an agent and where to complain

Confirm that the agent or agency is licensed in your state for workers' comp through your state insurance department's license lookup (opens in a new tab). For coverage disputes, claims, employer compliance or a suspected uninsured employer, contact your state's workers' comp board, commission or labor agency. For an agent's conduct, policy service or insurer problems, use the state insurance department's complaint process. The Department of Labor's directory (opens in a new tab) lists each state's workers' comp agency.

Questions to ask before your first employee starts

• Does my state require coverage for one employee, and does my industry have a different threshold?
• Does a part-time, temporary, seasonal, family or remote worker count?
• Is this person an employee or an independent contractor under my state's rule?
• Must I include or exclude myself as a sole proprietor, partner, LLC member or officer, and which form records that?
• What is the policy's effective date, and can it start before the employee's first day?
• Does the policy cover work done in another state?
• How do I report payroll, job duties and changes in employees?
• How should I collect and verify subcontractor certificates?
• Is a private carrier, state fund, assigned-risk option or self-insurance available to me?
• What notices must I post or give employees?
• Where do I report an injury or a coverage problem?

Frequently asked questions

Short answers to related questions about a first hire.

Does a part-time or temporary helper count?

In several states, yes. Connecticut covers part-time employees from the first day, and New York covers part-time, temporary and unpaid workers working under the employer's direction and control, subject to specific exclusions. Check your state's rule for helpers before they start.

Can a general contractor require me to carry workers' comp?

Yes. In New York, general contractors commonly require proof of workers' comp coverage from subcontractors, according to the Workers' Compensation Board (opens in a new tab). A contract can require coverage even where state law would not.

Do I need workers' comp if I have no employees?

Generally not for yourself alone, but owner rules vary. In New York, a sole proprietor without employees does not have to carry it but may choose to; in Connecticut, sole proprietors must accept the Act to be treated as an employer for insurance purposes.

Does general liability cover an employee's injury?

General liability does not replace workers' comp, which is the statutory benefit obligation to your employees. The general liability vs professional liability guide explains what those policies are for.

Your next step

Write down your state, your industry, each worker's role and hours, and your business structure, then take that list to a licensed agent before anyone starts work. The Riskado agency directory lists insurance agencies across the US, and what insurance a small business needs covers the policies that usually sit beside workers' comp. If your employee will drive for the business, do I need commercial auto insurance covers that side.