What insurance is required when hiring workers?

Required Insurance When Hiring Employees in New Mexico

When you hire employees in New Mexico, it is essential to secure the proper insurance coverage to comply with state requirements and protect your business operations.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most employers in New Mexico. This insurance covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses.

• Employers with one or more employees must carry workers' compensation insurance.
• This coverage helps manage risk and avoid penalties for non-compliance.
• You can obtain this insurance through private carriers or the New Mexico Workers' Compensation Administration.

Unemployment Insurance

As an employer, you are required to register for unemployment insurance through the New Mexico Department of Workforce Solutions.

• This insurance provides temporary income to employees who lose their jobs through no fault of their own.
• Employers pay quarterly unemployment taxes based on wages paid.
• Proper payroll setup and recordkeeping are critical to ensure accurate unemployment tax reporting.

Additional Insurance Considerations

While not legally required, consider the following insurance types to protect your business and employees:

• General liability insurance to cover third-party claims related to your business operations.
• Employment practices liability insurance to protect against claims related to hiring, termination, or workplace discrimination.
• Health insurance if your business meets the criteria under the Affordable Care Act for providing employee health coverage.

Operational Tips

• Verify your business registration and employee classification to ensure correct insurance coverage.
• Integrate insurance compliance into your payroll and HR systems for seamless reporting and recordkeeping.
• Review insurance policies annually to adjust coverage according to changes in workforce size or business operations.