Workers’ comp requirements depend on where employees work, not on a single national employee-count threshold. California generally requires employers with one or more employees to carry coverage under California Labor Code Section 3700. New York says virtually all employers must provide coverage for employees, as explained by the New York State Workers’ Compensation Board.
Florida’s thresholds vary by industry. Employers outside construction generally must cover employees once they have four or more, while construction employers generally must do so with one or more, subject to exclusions, as explained by the Florida Department of Financial Services. Employers with workers in multiple states should check the rules in each jurisdiction. Compliance can also involve notices, policy administration, and injury reporting, not just purchasing coverage.
Key Takeaways
- Workers’ compensation requirements depend on where employees work, so employers with workers in multiple states must check each state’s rules rather than rely on a single national employee-count threshold.
- California generally requires coverage for employers with one or more employees, Florida generally requires coverage at four or more employees outside construction and one or more in construction subject to exclusions, New York requires coverage for virtually all employers, and Texas private employers generally may choose whether to obtain coverage except where otherwise required by law.
- Workers’ compensation compliance can include notices, postings, policy administration, and injury reporting; in Texas, covered employers must notify new employees in writing and report coverage changes within 15 days, while non-subscribers with at least five non-exempt employees must report specified injuries, illnesses, and fatalities by the seventh day of the following month.
- Employers should use payroll and scheduling records to list every state where employees work, check each state agency’s coverage tests and compliance duties, and request written insurer or broker confirmation that the proposed policy addresses every work state.
Which Rules Govern Your Employees?
Workers’ compensation requirements are governed by where employees work. Employers should not assume that one national employee-count threshold applies.
Federal compensation programs are separate from state requirements. The U.S. Department of Labor’s Office of Workers’ Compensation Programs administers four programs for specified groups. Employees of private companies and state or local governments should contact their state workers’ compensation board.
Workers’ comp coverage protects employees after work-related injuries or illnesses. The Texas Department of Insurance, Division of Workers’ Compensation describes it as a state-regulated program that pays medical bills and replaces some lost wages.
How State Coverage Thresholds Differ
California’s rule carries criminal consequences as well as a coverage obligation. Failing to secure required workers’ compensation coverage is a misdemeanor punishable by a fine of at least $10,000, up to one year in county jail, or both. Additional penalties may apply.
Florida’s coverage thresholds depend on both industry and workforce. Employers generally must cover workers when they have four or more employees outside construction, or one or more employees in construction, subject to exclusions. Farmers have separate thresholds: more than five regular employees and/or at least 12 seasonal agricultural workers employed for at least 30 days.
An employer based outside the state generally needs a New York policy if employees or subcontractors work there, subject to state rules and exceptions. A home-state policy alone may not meet that requirement.
Texas is a notable contrast. Under Texas Labor Code Chapter 406, private employers generally may choose whether to obtain coverage, except for public employers and situations otherwise required by law. This choice does not remove requirements that may apply in particular circumstances. As a result, a company with workers in California, Florida, New York, and Texas may face different coverage obligations in each location.
What Must Employers Do Beyond Buying Coverage?
Employers must do more than purchase workers’ compensation coverage. Compliance can also require employee notices, policy administration, workplace postings, and injury reporting. Applicable duties and deadlines depend on the state where employees work, so a policy alone may not satisfy every obligation.
In Texas, employers with coverage must notify each new employee in writing when hired and inform employees of coverage changes within 15 days of the change’s effective date. A private Texas employer that does not subscribe to workers’ compensation and has at least five non-exempt employees must report specified work injuries, known work-related illnesses, and fatalities no later than the seventh day of the month after the event or discovery. Details are available in the Texas Department of Insurance, Division of Workers’ Compensation’s employer guidance.
Posting requirements, policy administration, and injury-reporting deadlines can also form part of state compliance. Rules may differ for covered employers and non-subscribers, so employers should consult the relevant state workers’ compensation agency for current instructions that apply to their workforce.
Comparing Workers’ Comp Costs
Workers’ comp costs are difficult to compare across states because a statewide index is not an employer-specific premium. Oregon’s 2024 premium index ranged from $0.50 per $100 of payroll in North Dakota to $2.52 in Hawaii, using a standardized mix of 50 high-claim-cost industries. The Oregon Department of Consumer and Business Services’ premium index provides a standardized comparison, not an individual employer quote or policy estimate.
In its June 2025 study release, Oregon reported a 2024 index of $0.89 per $100 of payroll, compared with a $1.09 national median, and a further 3.2% decline since the study’s 2024 effective date. The index does not predict an employer’s individual premium.
Verify Rules In Every Work State
Before choosing or renewing coverage, build a work-location register using payroll and scheduling records. List every state where employees work, including remote or temporary assignments, and record each person’s role, work arrangement, and employee or subcontractor status. Include details that can affect state tests, such as construction work and regular or seasonal agricultural labor.
For every state, consult the official workers’ compensation agency’s employer guidance. Check coverage tests, exclusions, notices, workplace postings, and injury-reporting instructions. Save the guidance, review date, and agency contact, and assign someone to revisit requirements when work locations or staffing change.
Before binding or renewing a policy, send the register to the insurer or broker and request written confirmation that the proposed arrangement addresses each work state. Keep the confirmation with policy records as a state-by-state checklist for identifying gaps.
Frequently Asked Questions
1. Do workers’ comp requirements apply to 1099 workers?
When reviewing workers’ comp coverage, check the rules in the state where the person works and verify the worker’s status. Include employees and subcontractors in your review.
2. Does workers’ comp pay for everything?
No. Workers’ compensation generally pays medical bills and replaces some lost wages for covered work-related injuries or illnesses, but it does not guarantee payment of every expense or all lost income. In Texas, wage replacement applies when a worker loses income for more than seven days.
