Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirements in Utah Before Hiring

In Utah, businesses must secure workers compensation insurance before hiring employees if they meet certain criteria. This insurance is essential for protecting both the business and its employees by covering medical expenses and lost wages resulting from work-related injuries or illnesses.

When Is Workers Compensation Insurance Required?

• Number of Employees: Utah law requires businesses with one or more employees to carry workers compensation insurance. This includes full-time, part-time, and seasonal workers.
• Industry Exceptions: Some industries may have specific rules or exemptions, but generally, most employers must comply.
• Independent Contractors: Independent contractors are typically not covered under workers compensation insurance unless classified as employees under Utah’s guidelines.

Operational Steps Before Hiring Employees

• Obtain Workers Compensation Insurance: Contact a licensed insurance provider to secure coverage before the first employee starts work.
• Register Your Business: Ensure your business is registered with the Utah Labor Commission, which oversees workers compensation compliance.
• Maintain Records: Keep detailed records of all employees and insurance coverage to meet reporting requirements and audits.
• Integrate Payroll Systems: Set up payroll to account for workers compensation insurance premiums and related tax reporting.

Additional Compliance Considerations

As of 2026, Utah employers must also comply with timely reporting of workplace injuries and maintain communication with their insurance carrier. Automating injury reporting and recordkeeping can improve compliance and reduce administrative burdens.

Failure to carry workers compensation insurance can result in penalties, fines, and liability for medical costs. Prioritize securing coverage as a key operational step before onboarding any employee in Utah.