What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in New Mexico

Before hiring employees in New Mexico, businesses must secure specific insurance types to comply with state regulations and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most employers in New Mexico once you hire at least one employee. This insurance covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

• Obtain coverage through a private insurer or the New Mexico Workers' Compensation Administration.
• Maintain accurate recordkeeping of claims and employee injuries.
• Report workplace injuries promptly as part of compliance requirements.

Unemployment Insurance

New Mexico requires employers to register for unemployment insurance through the New Mexico Department of Workforce Solutions.

• Pay state unemployment taxes based on your payroll.
• File quarterly reports detailing wages and employee status.
• Ensure timely payment to avoid penalties and maintain compliance.

Other Insurance Considerations

While not legally required, consider the following to support your operational needs:

• General liability insurance to protect against third-party claims.
• Employment practices liability insurance to cover claims related to hiring, discrimination, or wrongful termination.
• Health insurance if your business size or industry requires it under federal guidelines.

Operational Tips

• Integrate insurance premium payments into your payroll and bookkeeping systems for accuracy.
• Automate reporting requirements to state agencies to stay compliant.
• Consult with a licensed insurance broker familiar with New Mexico regulations for tailored coverage.