If you’ve ever asked yourself, “when is workers comp required,” look no further than our guide. In many cases, workers’ compensation insurance is required by law. However, requirements vary by state, industry, and employer size, so check your state laws. 

At Canal HR, we develop a managed care program for our clients that includes plans in case of injury and a network of preferred medical professionals and pharmacies. Keep reading to learn more about Canal HR’s program and how we can help your business. 

What is Workers’ Compensation Insurance?

If you don’t already know, workers’ compensation insurance is designed to protect employees who are injured on the job. It provides medical benefits, wage replacement, and rehabilitation services, if needed, to employees who suffer work-related injuries or illnesses. The benefits are paid by employers either directly to the employee or carried through insurance carriers. 

What is an Occupational Safety Program? 

Occupational safety programs help avoid potential issues and prevent injuries and job-related diseases. However, a workplace accident can be costly if you are an employer. We can help develop the following: 

• Statement of the intent as a company and the responsibilities 
• Procedures
• Written instructions and regulations 
• Periodic meetings with management 
• Immediate investigations 
• Records of inspections, incidents, investigations, etc. 
• Maintained supervision 

However, it’s important to note that occupational safety programs are not for everyone and are instead best for companies where employees are working in a more hazardous environment. 

Industry-Specific Requirements

Some industries have specific workers’ compensation requirements. For example, federal law requires employers who engage in interstate commerce to carry workers’ compensation insurance. In addition, industries considered high-risk, such as construction and manufacturing, may have higher premiums or more stringent safety regulations, as noted above. 

Are Any Industries Exempt?

Exemption varies by industry, but some include the following: 

• Certain employees of a private residence
• Certain employees of a private unincorporated farm
• Certain musicians and performers 
• Employees covered by specific federal laws
• Employees of railroads or other vessels in interstate or foreign commerce
• Crews of airplanes engaged in crop dusting or spraying operations 
• Uncompensated officers and members of boards of directors of specific non-profit organizations 
• Landmen 

If you are unsure if you are exempt from workers’ compensation, visit the Office of Workers’ Compensation Programs website. 

Employer Size

An employer’s size can also affect whether workers’ compensation insurance is required. In many states, small businesses with fewer than three employees are exempt from the requirement to carry workers’ compensation insurance. However, some states require all employers, regardless of size, to provide coverage.

In addition, some states have different rules for employers with agricultural or domestic workers. For example, in California, employers with domestic employees must provide workers’ compensation coverage if they employ one or more domestic workers for more than 52 hours per year.

Independent Contractors

Independent contractors are not typically eligible for workers’ compensation benefits. However, there are some cases where independent contractors may be considered employees for the purposes of workers’ compensation insurance.

For example, if an employer misclassifies an employee as an independent contractor, they may still be entitled to workers’ compensation benefits if they suffer a work-related injury or illness. Similarly, some states have laws that make certain independent contractors eligible for workers’ compensation benefits.

Penalties for Non-Compliance

Employers who fail to carry workers’ compensation insurance when required can face penalties and fines. In some cases, employers may also be liable for paying benefits out of pocket to injured employees.

Penalties for noncompliance vary by state, but they can include fines, jail time, and revocation of business licenses. In addition, injured employees may be able to sue their employer for damages if they were not provided with required workers’ compensation coverage.

Never Wonder “When is Workers Comp Required” with Canal HR

Workers’ compensation insurance is an essential protection for employees who are injured on the job. While requirements vary by state and industry, most employers are required to provide coverage for their employees. Employers who fail to comply with workers’ compensation requirements can face penalties and legal action. When partnering with Canal HR, we establish on-site provisions, a network of talented providers, and lower workers’ compensation costs. We also have a registered nurse on call for immediate medical management intervention. To learn more about our workers’ compensation capabilities and never again ask yourself, “when is workers comp required,” click here. 

Contact us today if you want a team of experts to help your small business thrive.