Workers comp coverage required in Minnesota
Employers with one or more employees must carry workers' compensation insurance. Verified 2026-05-09.
Who must carry workers comp in Minnesota?
Minnesota workers compensation coverage is required Employers with one or more employees must carry workers' compensation insurance.
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 Minnesota 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
Minnesota uses an 'economic realities' test to determine worker classification, regardless of 1099 status; misclassification can lead to penalties. General contractors are responsible for ensuring subcontractors carry workers' compensation or may be held liable for their employees' injuries.
Penalty for going without
Penalties include fines, stop-work orders, and personal liability for employee injuries and benefits. 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 Minnesota?
Employers with one or more employees must carry workers' compensation insurance.
When does the requirement kick in for a new Minnesota employer?
The clock starts on the first day the first qualifying employee is on the books. Minnesota 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 Minnesota?
Penalties include fines, stop-work orders, and personal liability for employee injuries and benefits.
Do 1099 contractors trigger the coverage requirement in Minnesota?
Minnesota uses an 'economic realities' test to determine worker classification, regardless of 1099 status; misclassification can lead to penalties.
Are subcontractors counted toward the threshold in Minnesota?
General contractors are responsible for ensuring subcontractors carry workers' compensation or may be held liable for their employees' injuries.
What happens if I am audited and found non-compliant in Minnesota?
Minnesota typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Penalties include fines, stop-work orders, and personal liability for employee injuries and benefits. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.