What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Minnesota

When you hire employees in Minnesota, certain insurance coverages are mandatory to ensure compliance and protect your business and workforce.

Workers' Compensation Insurance

Workers' compensation insurance is required for most employers in Minnesota. This insurance covers medical expenses and wage replacement for employees injured on the job. As of 2026, businesses with one or more employees typically must carry this coverage.

• Register with the Minnesota Department of Labor and Industry for workers' compensation.
• Maintain accurate injury and illness records as part of compliance.
• Consider integrating claims management into your HR or payroll systems for operational efficiency.

Unemployment Insurance

Employers must also provide unemployment insurance coverage by registering with the Minnesota Unemployment Insurance Program. This insurance supports employees who lose their jobs through no fault of their own.

• Report wages and pay unemployment taxes regularly.
• Keep detailed payroll records to facilitate accurate reporting.

Other Insurance Considerations

While not legally required, consider these additional coverages for operational risk management:

• Employer Liability Insurance: Often bundled with workers' compensation to protect against employee lawsuits.
• Health Insurance: If your business has 50 or more full-time employees, you must comply with federal Affordable Care Act requirements.
• Disability Insurance: Minnesota does not require private disability insurance, but voluntary plans may support employee retention.

Operational Tips

• Ensure insurance policies are active before employees start work to avoid compliance gaps.
• Use automated payroll systems to manage insurance tax deductions and reporting efficiently.
• Regularly review insurance coverage as your workforce grows or changes.