In nearly every U.S. state, employers are required by law to carry workers’ compensation insurance. Since laws surrounding coverage are written at the state level, each state has different rules and requirements. In this article, we’ll explain workers’ compensation laws in Pennsylvania—who you need to cover, who is exempt, and possible penalties for non-compliance.


How does workers’ compensation insurance in Pennsylvania work?


Employers in Pennsylvania must obtain workers’ compensation coverage as soon as they have one employee, unless all of their employees are excluded from the state’s workers’ compensation laws.

Most employers purchase coverage via the private insurance market. High-risk businesses that are unable to purchase private insurance can get coverage through the State Workers’ Insurance Fund (SWIF). Large companies can also self-insure, provided they’ve been in business long enough and can prove they have substantial financial resources.


Who needs workers’ compensation insurance in Pennsylvania?


In most cases, employers will need to purchase workers’ compensation insurance as soon as they have one part-time, full-time, or seasonal employee. There are some exceptions to this rule, however.

Employers in Pennsylvania may be able to legally go without workers’ comp if all employees in the company fit one of the following criteria:

  • Agricultural workers earning less than $1200 per year who have not sought inclusion under state workers’ comp laws
  • Casual workers
  • Domestic workers
  • Federal workers
  • Railroad workers
  • Longshoremen
  • Sole proprietors
  • LLC partners
  • Workers granted exemptions on religious grounds
  • Executed officers granted exemption
  • Real estate salespeople working under 100% commission

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 Pennsylvania?


Pennsylvania has steep penalties for workers’ comp non-compliance. As an employer, you can be fined up to $2,500 or face one year of imprisonment for each day that you fail to provide coverage for your employees. Felony convictions can result in even harsher penalties. If an employee sustains a work-related injury and you don’t have coverage, they can sue you for damages even greater than what workers’ comp would provide them following a claim.


How much does workers’ comp insurance in Pennsylvania cost?


On average, employers in Pennsylvania pay $1.35 annually per $100 in covered wages.


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 might 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.