How workers’ compensation insurance varies from state to state

One of the biggest misconceptions about worker’s compensation is that everything is handled on a national level. That would mean that all the requirements, policies and details would be the same throughout the country.

However, that is not the case. Actually, it is state by state where all the regulations are handled and implemented. Therefore, it is important to know the legislation in your state, so that you can obtain the policies that you and your company need, or on the contrary, know when you do not need this type of insurance and can save on the cost.

One of the key points of difference will be how many employees make up the minimum requirement for companies to obtain workers’ compensation insurance policies. In some states, only one employee is needed, and in other states, the limit may be three employees, five, six, or more.

So it’s important to remember what qualifies as an employee, because this, too, is variable. For example, if you are the sole proprietor of a business, you are considered the employer and not the employee. Meanwhile, even part-time employees tend to count, so working full-time isn’t a requirement.

In some states, the construction industry is treated separately from all other industries. As an example, in Alabama, all residential construction companies are required to have workers’ compensation, regardless of how many employees they have. For all other industries, the requirement is five or more employees.

On the other side of the fence, in Louisiana, all businesses in all industries must have workers’ compensation, with no minimum number of employees. Georgia also does not describe through industry. Their guideline is a minimum of three employees, regardless of industry.

Another big point of difference will be how certain states tailor their workers’ compensation requirements based on the specific industries in their region. For example, in Tennessee, they specifically cite the coal mining industry. Here, if all companies with at least one employee must have worker’s compensation.

As another example, in Florida, they cite the agricultural industry. Here, they have two different potential requirements. One is six or more regular employees and another is 12 or more temporary employees, who are employed for 30 days or more.

Be sure to work with an experienced professional who can educate you on your state’s guidelines and can also help you get a great deal so you don’t overpay for your workers’ compensation insurance plan.