Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirements in Washington Before Hiring

In Washington State, businesses must secure workers compensation insurance before hiring employees. This insurance is mandatory to cover workplace injuries or illnesses and protect both employees and employers from financial risk.

Key operational steps to comply:

• Register with the Washington State Department of Labor & Industries (L&I): Before hiring, businesses must register to obtain a workers compensation account.
• Obtain workers compensation insurance: Most employers must purchase insurance through the state’s L&I program. Some large employers may self-insure if approved.
• Classify employees correctly: Proper employee classification affects insurance premiums and coverage. Misclassification can lead to penalties and compliance issues.
• Maintain accurate payroll and recordkeeping: Payroll reports are required to calculate premiums. Keeping detailed records supports compliance and auditing.
• Renew and update coverage annually: Insurance must remain active and reflect changes in employee count or job duties.

As of 2026, Washington enforces strict compliance with workers compensation requirements before hiring. Failure to have coverage can result in fines, stop-work orders, and liability for injury claims.

Integrating workers compensation insurance into your hiring and payroll processes ensures operational continuity, compliance, and employee protection from day one.