Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirements in Wisconsin Before Hiring

In Wisconsin, businesses must secure workers compensation insurance before hiring employees in most cases. This insurance is essential to cover medical expenses and wage replacement for employees who suffer work-related injuries or illnesses.

When Workers Compensation Insurance Is Required

• Employers with Employees: If your business has one or more employees, you are generally required to carry workers compensation insurance.
• Type of Employees: This includes full-time, part-time, and seasonal employees.
• Industry Exceptions: Certain agricultural businesses and sole proprietors without employees may be exempt, but verifying your specific situation is important.

Operational Steps Before Hiring

• Obtain Coverage: Arrange workers compensation insurance through a private insurer or the state fund before your first employee starts work.
• Business Registration: Ensure your business registration with the Wisconsin Department of Workforce Development (DWD) is up to date.
• Employee Classification: Properly classify workers to determine coverage needs and premium calculations.
• Recordkeeping: Maintain accurate payroll and injury records to comply with reporting requirements.

Additional Considerations

As of 2026, failure to have workers compensation insurance when required can result in penalties, fines, and potential liability for injury costs. Integrating insurance procurement with your hiring and payroll processes can support compliance and streamline operations.