Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Pennsylvania

In Pennsylvania, most businesses with employees are required to have workers compensation insurance. This insurance covers medical expenses and lost wages if an employee is injured on the job.

When Workers Compensation Insurance Is Required

• Employers with one or more employees: Generally must carry workers compensation insurance, including full-time, part-time, and seasonal workers.
• Domestic workers: If you employ domestic workers such as housekeepers or caregivers for more than 40 hours per week, insurance is typically required.
• Construction and subcontractors: Must maintain coverage regardless of the number of employees.
• Corporate officers: May be exempt if they do not have employees and file an exemption with the state.

Operational Considerations

• Business registration: Ensure your business is properly registered with the Pennsylvania Department of Labor & Industry before obtaining insurance.
• Insurance providers: You can purchase workers compensation insurance through private insurers or the state-run Workers’ Compensation Assigned Risk Pool if you have difficulty obtaining coverage.
• Recordkeeping: Maintain accurate injury and claim records to comply with state reporting requirements and support payroll and compliance audits.
• Payroll impact: Workers compensation premiums are often calculated based on payroll size and job classification, so accurate payroll records are essential.
• Employee classification: Properly classify employees versus independent contractors to avoid coverage gaps and penalties.

Exemptions and Special Cases

As of 2026, certain small employers or specific professions may be exempt from mandatory workers compensation coverage. Verify current exemptions with the Pennsylvania Department of Labor & Industry to determine if your business qualifies.

Failure to maintain required workers compensation insurance can result in fines, penalties, and potential liability for workplace injuries. Prioritize compliance to protect your business operations and workforce.