Workers comp coverage required in Massachusetts
any person or business that employs workers must purchase workers' compensation insurance except (i) individuals employing people to do work on their own homes, (ii) non-profit corporations with no paid staff, and (iii) corporations in which each employee is an officer/director who owns at least 25% of the corporation and each has given up his/her right to workers' compensation benefits in the state. Verified 2026-05-09.
Who must carry workers comp in Massachusetts?
Massachusetts workers compensation coverage is required any person or business that employs workers must purchase workers' compensation insurance except (i) individuals employing people to do work on their own homes, (ii) non-profit corporations with no paid staff, and (iii) corporations in which each employee is an officer/director who owns at least 25% of the corporation and each has given up his/her right to workers' compensation benefits in the state.
The threshold language matters: states write the rule slightly differently. Some count any worker, some count only W-2 employees, some count owners separately, some have industry-specific exemptions (agriculture, domestic service, casual labor). For a Massachusetts employer with a non-trivial workforce, the safest default is: assume coverage is required and confirm with the state department of insurance or a local agent.
How the threshold interacts with 1099s and subs
Massachusetts uses a strict 'ABC test' to determine independent contractor status; workers failing any part of the test are typically considered employees for workers' compensation purposes. General contractors are typically responsible for ensuring subcontractors carry workers' compensation insurance; otherwise, they may be liable for the subcontractor's employees' injuries.
Penalty for going without
Employers failing to carry required coverage face substantial fines, potential imprisonment, stop-work orders, and direct liability for all injury costs. The financial penalty is usually a fraction of the human cost: an injured employee at an uncovered employer can sue directly under tort law instead of being limited to the workers comp benefit, exposing the owner to lost-wage damages, pain and suffering, and punitive damages without the corporate veil.
Related reading
FAQs
Who has to carry workers comp in Massachusetts?
any person or business that employs workers must purchase workers' compensation insurance except (i) individuals employing people to do work on their own homes, (ii) non-profit corporations with no paid staff, and (iii) corporations in which each employee is an officer/director who owns at least 25% of the corporation and each has given up his/her right to workers' compensation benefits in the state.
When does the requirement kick in for a new Massachusetts employer?
The clock starts on the first day the first qualifying employee is on the books. Massachusetts does not have a grace period for new employers, so a policy needs to be bound on or before the first hire date. Some agents can issue same-day binders for low-risk class codes.
What is the penalty for not having workers comp in Massachusetts?
Employers failing to carry required coverage face substantial fines, potential imprisonment, stop-work orders, and direct liability for all injury costs.
Do 1099 contractors trigger the coverage requirement in Massachusetts?
Massachusetts uses a strict 'ABC test' to determine independent contractor status; workers failing any part of the test are typically considered employees for workers' compensation purposes.
Are subcontractors counted toward the threshold in Massachusetts?
General contractors are typically responsible for ensuring subcontractors carry workers' compensation insurance; otherwise, they may be liable for the subcontractor's employees' injuries.
What happens if I am audited and found non-compliant in Massachusetts?
Massachusetts typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Employers failing to carry required coverage face substantial fines, potential imprisonment, stop-work orders, and direct liability for all injury costs. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.