When Is My Employer Required to Have Worker's Compensation Insurance?

One of the bedrock principles of worker's compensation is universal coverage. That means that virtually every employee is covered. Therefore, virtually every employer has to have worker's compensation insurance. Specifically, the law defines the following as employers who must have worker's compensation insurance:

  1. The state and its municipalities, including each county, city, town, village, school district, sewer district, drainage district and other public or semi-public corporation
  2. Persons, except farmers, who usually employ three or more employees in one or more trades, businesses, professions or occupations in one or more locations
  3. Person, excluding farmers, who usually employ fewer than three employees, effective on the tenth day of the first month after the calendar quarter in which wages of $500 or more were paid for services
  4. Farmers who employ six or more employees on 20 or more days in any calendar year, effective 10 days after twentieth day of employment.
  5. Persons who purchase a worker's compensation insurance policy

Universal coverage really means universal. Even out-of-state employers with employees working in Wisconsin must have a worker's compensation policy with an insurance company licensed to write worker's compensation insurance in Wisconsin. If an out-of-state employer has a worker's compensation insurance policy with an insurance company not licensed to write in Wisconsin, they must obtain a policy from a Wisconsin licensed insurance company.

Universal coverage also applies to those employers who are financially sound (and usually quite large) that are "self-insured". Being Self-insured means that the employer is not required to obtain worker's compensation insurance from an insurance company because they can bear the financial obligations of paying claims from their own internal resources. The Department of Workforce Development grants permission for employers to become self-insured.