Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirements Before Hiring in Vermont

In Vermont, businesses must secure workers compensation insurance before hiring employees. This insurance protects both the employer and employees by covering medical expenses and lost wages if a worker is injured on the job.

When Workers Compensation Insurance Is Required

• All employers with one or more employees must have workers compensation insurance in place before starting work.
• This includes full-time, part-time, and seasonal employees.
• Employers who fail to obtain coverage may face penalties and fines from the Vermont Department of Labor.

Operational Steps for Compliance

• Obtain coverage: Purchase workers compensation insurance through a private insurer or the Vermont Workers' Compensation Program.
• Maintain records: Keep detailed records of all employees and payroll to support insurance reporting requirements.
• Report promptly: Notify your insurer and the Vermont Department of Labor immediately if a workplace injury occurs.
• Integrate with payroll: Ensure accurate payroll reporting to calculate insurance premiums correctly.

Additional Considerations

As of 2026, businesses should also review employee classification carefully to avoid misclassifying workers, which can affect insurance coverage and premium costs. Automating payroll and recordkeeping can streamline compliance with workers compensation insurance requirements and reporting.