What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Vermont

When you hire employees in Vermont, there are specific insurance requirements to keep your business compliant and protected. Understanding these requirements helps you manage risk and maintain smooth operations.

Workers’ Compensation Insurance

All Vermont employers with one or more employees must carry workers’ compensation insurance. This insurance covers medical expenses and lost wages if an employee is injured on the job. It is mandatory regardless of whether employees work full-time, part-time, or seasonally.

• Obtain coverage through a private insurer authorized in Vermont or through the Vermont Department of Labor’s workers’ compensation program.
• Ensure timely reporting of workplace injuries as part of compliance and claims management.

Unemployment Insurance

Employers must register for unemployment insurance with the Vermont Department of Labor. This insurance provides temporary benefits to employees who lose their jobs through no fault of their own.

• Register within 15 days of paying wages totaling $1,500 or more in a calendar quarter.
• Regularly report payroll and pay unemployment taxes to maintain good standing.

Disability Insurance

Vermont does not require private disability insurance for employees, but employers should be aware of federal requirements such as the Family and Medical Leave Act (FMLA) and consider voluntary short-term disability plans as part of employee benefits.

Additional Operational Considerations

• Employee Classification: Properly classify workers as employees or independent contractors to avoid insurance and tax issues.
• Recordkeeping: Maintain detailed records of insurance policies, employee eligibility, and claims to support compliance audits.
• Payroll Integration: Automate payroll systems to account for insurance premiums and tax withholdings efficiently.

As of 2026, always verify insurance requirements with the Vermont Department of Labor and consult with your insurance provider to ensure full compliance and optimal coverage for your workforce.