Farmers need Worker's Compensation insurance if they have:
- 6 or more employees (at one or more locations),
- working on the same day for 20 days (consecutive or non consecutive) during a calendar year.
- After the 20th day, farmers have 10 days to obtain insurance.
There is no wage threshold for farmers. It doesn’t matter how much a farmer pays in wages. What matters is the number of employees (after excluding certain employees who are family members, relatives or "exchanged workers" as described in more detail below).
For farmers, the threshold is 6 employees, farmers should note:
- A calendar year starts on January 1st and ends on December 31st.
- The 20 days do not have to be consecutive.
- On each of the 20 days, it can be the same 6 employees or 6 different people.
- The 6 employees may be full-time or part-time.
- The 6 employees may be at more than one location within the state.
- Certain relatives are not counted in determining whether there are 6 employees.
Examples and Analysis
- Example #1: Farmer Pat had 5 employees every day in January and February. Pat had 6 employees on 17 dates in March and 5 employees every day April through December.
- Analysis: In January, February and April through December Pat had 5 employees every day, but none of those days count toward the 20-day threshold because there is no day that Pat had 6 employees. Pat had 6 employees on only 17 days during the calendar year and therefore, is not required to obtain a worker’s compensation insurance policy.
- Example #2: Farmer Chris had no employees in January or February. Chris had 6 employees (4 worked full-time and 2 worked part-time) on 3 dates in March, on 7 dates in April, on 9 dates in May, and on 10 dates in June, starting on June 3rd.
- Analysis: In March, April and May there were 19 total days on which Chris had 6 employees. Any combination of new, old, part-time or full-time employees are counted the same way. June 3rd is the 20th day during the calendar year on which Chris had 6 employees. This means that 10 days later, on June 13th, Chris is subject to the Worker’s Compensation Act. Chris must have a worker’s compensation policy in force by June 13th.
A worksheet is available to determine if a farm is exempt from worker's compensation requirements.