In almost every U.S. state, employers are required to carry workers’ compensation insurance if they have a certain number of employees. If you’re a business owner in Minnesota, you must carry workers’ comp insurance if you have at least one employee. Like most states, Minnesota specifies a few employee types that are exempt from compulsory coverage.

In this article, we’ll go over who you need to cover, who is exempt, and possible penalties for non-compliance.


How does workers’ compensation insurance in Minnesota work?


The state of Minnesota requires you to carry workers’ compensation insurance as soon as you have one part-time or full-time employee. You can obtain coverage through an insurance agent or insurance company. If you need help finding a licensed agent or company, use the Minnesota Commerce Department “License Lookup Directory” tool. Or if you can apply to become self insured.

If you are unable to purchase workers’ compensation insurance through the private market, your next option is to apply for the state’s assigned risk pool. You can apply online, or with a licensed insurance agent or by calling the Minnesota Workers’ Compensation Insurer’s Association at 952-897-1737.


Who needs workers’ compensation insurance in Minnesota?


Nearly every employee in Minnesota must be covered by workers’ compensation insurance, with some exceptions. Employees who are exempt from mandatory coverage include:

  • Family farm workers
  • Parents, spouses, or children of family farm operators
  • Sole proprietors
  • Parents, spouses, or children of sole proprietors
  • Household workers earning less than $1,000 in a three-month period
  • Some LLC partners and corporate officers

As a business owner or sole proprietor, you don’t have to purchase workers’ compensation insurance for yourself. That doesn’t mean you shouldn’t get coverage. Sustaining an injury or illness while performing your work can lead to sizable hospital bills, medical costs and a lengthy recovery period. Investing in workers’ comp for yourself could save you from a brutal financial setback.


What are the penalties for not having workers’ comp in Minnesota?


Getting caught without having workers’ compensation coverage in Minnesota can lead to some hefty penalties, including a $1,000 fine per employee for every week in which there is a lapse of coverage. If one of your employees gets injured on the job and you don’t have coverage, your employee may be compensated by the state’s Special Compensation Fund. As the employer, you could be liable to fully reimburse the Special Compensation Fund as well as pay a 65% penalty.


What does workers’ comp cover?

Medical costs

If one of your employees is injured or becomes ill on the job, workers’ comp can cover their immediate medical expenses such as ambulance rides, emergency room visits, x-rays, surgery and prescription medications.

For example, if a kitchen employee reaches into a sink and slices their hand on a broken glass, they might require medical attention. Workers’ comp could cover the costs of their emergency room visit, stitches and pain management prescriptions.

Lost Wages

Many work-related incidents can leave employees unable to work for several weeks or months. Workers’ comp can provide some relief for employees in the form of partial wage replacement.

If an employee breaks their foot in a work-related accident, they could end up stuck at home for multiple months. While they’re out of work, workers’ comp would cover some of their lost wages.

Ongoing Care

Some work-related injuries require long-term care such as physical therapy or pain management. Often, these injuries are more the result of repetitive workplace stress rather than a single traumatic incident. Chronic back issues for construction workers and carpal tunnel syndrome for office employees are two common examples of the types of workers who must receive ongoing care due to repetitive stress. If their claim is approved, workers’ comp can cover the costs associated with their ongoing care.

Death Benefits

If the unthinkable happens and an employee passes away because of a workplace incident, workers’ comp can cover funeral costs and other death benefits for the deceased worker’s family or beneficiaries.