What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Pennsylvania

When hiring employees in Pennsylvania, businesses must secure specific types of insurance 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 Pennsylvania. It covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

• Applies to businesses with one or more employees.
• Coverage must be obtained before employees begin work.
• Failure to maintain workers' compensation insurance can result in fines and penalties.

Unemployment Compensation Insurance

Employers must also register for unemployment compensation insurance through the Pennsylvania Department of Labor & Industry. This insurance provides temporary benefits to employees who lose their jobs through no fault of their own.

• Required for businesses with employees working 30 days or more in a calendar year.
• Employers pay quarterly unemployment taxes based on payroll.

Additional Insurance Considerations

While not legally required, some businesses may consider additional insurance for operational security:

• General liability insurance to cover third-party claims.
• Commercial auto insurance if employees use vehicles for work.
• Health insurance offerings if applicable under federal laws and company size.

Operational Tips

• Verify insurance coverage before onboarding employees to ensure compliance.
• Maintain accurate payroll and employee records to facilitate insurance reporting and tax filings.
• Consider automation tools to manage insurance renewals and compliance deadlines efficiently.