If you're running a business in Massachusetts, workers' compensation insurance isn't optional—it's the law. And unlike some states that give smaller businesses a pass, Massachusetts has one of the strictest requirements in the country. Whether you're hiring your first employee or managing a team of hundreds, understanding these rules could save you from serious legal trouble and steep fines.
Here's what you need to know about Massachusetts workers' comp requirements, who's covered, who can opt out, and what happens if you skip coverage.
The Basic Requirement: One Employee Means You Need Coverage
Let's start with the most important rule: if you have one or more employees in Massachusetts, you must carry workers' compensation insurance. It doesn't matter if they work one hour a week or forty. It doesn't matter if they're part-time, seasonal, or temporary. If they're on your payroll, you need coverage.
The only exception to this strict rule applies to domestic employees—like nannies, housekeepers, or home health aides. They must work at least 16 hours per week before coverage becomes mandatory. If your domestic worker clocks fewer than 16 hours weekly, you're not legally required to provide workers' comp, though you certainly can if you choose.
This no-threshold policy sets Massachusetts apart from many other states. Some states only require coverage once you hit three, five, or even ten employees. But Massachusetts doesn't give you that wiggle room. Hire your first employee, and you're on the hook for coverage from day one.
Who Can Skip Coverage? Business Owners and Partners
Now, here's where it gets interesting for business owners. While your employees absolutely need coverage, you might not have to cover yourself—depending on how your business is structured.
If you're a sole proprietor, a member of an LLC, or a partner in an LLP, you're not legally required to carry workers' compensation insurance for yourself. That said, you can elect to add yourself to the policy if you want that protection—and many business owners do, especially in higher-risk industries.
Corporate officers have a different path to exemption. If you own at least 25% of the corporation, you can request an exemption from workers' comp coverage by filing Form 153 (Affidavit for Certain Corporate Officers or Directors) with the Department of Industrial Accidents. This gives you the freedom to opt out—but again, you can choose to stay covered if you prefer.
One important note: if you elect coverage as a sole proprietor, partner, or LLC member, the basis of premium as of October 1, 2025, is $70,000. That's the amount your premium calculation will be based on, regardless of what you actually pay yourself.
The Independent Contractor Gray Area
A lot of business owners think they can avoid workers' comp requirements by hiring independent contractors instead of employees. And technically, you can—but Massachusetts makes it harder than you might think.
Under Massachusetts law (MGL c. 149, § 148B), all workers are presumed to be employees. That means the burden is on you, the employer, to prove someone qualifies as an independent contractor. To do that, you must pass a strict three-prong test. You have to show that the worker operates free from your direction and control, performs work outside the usual course of your business, and has their own established independent business or trade doing that kind of work.
For example, if you own a construction company and hire an electrician who runs their own electrical contracting business, works on their own schedule, and brings their own tools, they'd likely qualify as an independent contractor. But if you're hiring someone to do the same kind of work your regular employees do, under your supervision, they're probably an employee—no matter what you call them.
Misclassifying employees as independent contractors can land you in serious trouble, so if you're unsure, consult an attorney or contact the Office of Legal Counsel at the Department of Industrial Accidents.
What Happens If You Don't Have Coverage?
Here's where things get expensive. Massachusetts doesn't mess around when it comes to enforcing workers' comp requirements. If the Department of Industrial Accidents finds out you're operating without coverage, they'll issue a stop work order. That means your business has to shut down immediately until you get insured and pay your fines.
The fines start at $100 per day, including weekends and holidays, from the date the stop work order is issued. Those fines don't stop accumulating until you provide proof of insurance and pay the full penalty. And if you decide to appeal the stop work order? The fines jump to $250 per day, though you can keep your business open while the appeal is pending. If the commissioner determines you were indeed non-compliant, you'll owe $250 per day for every day you operated without coverage.
But wait, it gets worse. You could also face criminal charges, which can result in up to one year in prison and fines up to $1,500 upon conviction. On top of that, uninsured employers can be barred from bidding on public contracts for three years. If your business relies on government work, that's a death sentence.
Bottom line: the cost of workers' comp insurance is nothing compared to what you'll pay if you skip it.
How to Get Workers' Comp Coverage in Massachusetts
Getting coverage is straightforward. Massachusetts operates as a competitive market for workers' compensation insurance, which means you can shop around and compare quotes from multiple insurers. Your premium will depend on your industry, payroll size, and claims history.
Most business owners work with an insurance agent or broker who specializes in commercial insurance. They'll help you find the right policy and make sure you're properly covered. You can also check with industry associations or the Workers' Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA) for guidance.
Once you have coverage, keep your certificate of insurance handy. You may need to provide proof of coverage to clients, landlords, or licensing agencies. And if you ever get audited or face a stop work order, having your documentation ready can save you a lot of headaches.
Workers' compensation insurance protects both you and your employees. It covers medical bills and lost wages if someone gets hurt on the job, and it shields your business from costly lawsuits. In Massachusetts, it's not just smart business—it's the law. Don't wait until you get a stop work order to take it seriously. Get covered, stay compliant, and focus on growing your business without the legal stress.
