If you run a business in Wisconsin, understanding workers comp requirements isn’t optional—it’s a legal and financial necessity. The state has clear rules about which employers must carry workers’ compensation insurance, and failing to follow them can lead to serious consequences.
So, is workers’ comp required in Wisconsin? In many cases, yes—but there are specific exemptions, thresholds, and details that determine whether your business is covered by the law.
In this post, we’ll break down the most important things Wisconsin employers need to know about workers comp requirements. You’ll learn:
- Who is legally required to carry workers’ compensation insurance
- Which roles and business types may be exempt
- The penalties for not having proper coverage
- What steps you can take to stay compliant and avoid fines
Let’s start with who actually needs to carry this insurance under Wisconsin law.
Who Is Required to Carry Workers’ Comp Insurance in Wisconsin?
In Wisconsin, workers comp requirements are based primarily on how many employees a business has and the type of business structure. If you have three or more full-time or part-time employees, the law generally requires you to carry workers’ compensation insurance. That’s true even if those workers are family members.
But the threshold can be even lower. If you employ one or two people and they earn a combined $500 or more in a calendar quarter, you’re also required to carry coverage starting at the beginning of the next quarter. So even small businesses need to stay alert to when these rules kick in.
Part-Time Workers Count Too
A common misconception is that part-time employees don’t factor into workers comp requirements. That’s not true in Wisconsin. Whether someone works 40 hours a week or five, if they’re on your payroll, they count toward the employee total. This includes minors, temporary employees, and seasonal workers.
Out-of-State Employers With Wisconsin Workers
If your business is based in another state but you have employees working in Wisconsin—even temporarily—you may still be subject to the state’s workers comp requirements. Wisconsin requires out-of-state employers to comply with local laws if they have any operations or employees in the state.
Special Rules for Certain Business Types
Sole proprietors, partnerships, and members of an LLC aren’t automatically counted as employees under Wisconsin law. We’ll cover those exceptions in more detail in the next section, but if your business hires additional staff outside of these roles, you’re likely still responsible for meeting the state’s coverage rules.
To stay on the right side of the law, it’s critical to evaluate how your workforce fits into Wisconsin’s workers comp requirements. Even small or newly launched businesses can meet the coverage threshold sooner than expected.
Workers’ Comp Exemptions in Wisconsin
While many businesses are required to carry coverage, Wisconsin law also outlines specific exemptions from its workers comp requirements. Understanding these exceptions can save small business owners from paying for insurance they might not legally need—or worse, skipping it when it’s actually required.
Sole Proprietors and Partnerships
If you’re a sole proprietor with no employees, you’re not required to carry workers’ compensation insurance for yourself. The same applies to partnerships—if the only people working in the business are the partners, and no outside employees are hired, the state does not require coverage.
However, the moment you bring on employees who are not partners, even part-time or temporary workers, the workers comp requirements apply. That’s where many small business owners run into trouble—they assume they’re exempt, but then bring in help and don’t update their coverage.
Members of an LLC
In a limited liability company (LLC), members are not automatically counted as employees. If all workers are members of the LLC and no one else is employed, workers’ compensation is not required. But if the LLC hires non-member employees, those individuals are covered under Wisconsin’s workers comp requirements.
Corporate Officers and Family Members
Corporate officers who work for the company are generally considered employees and must be covered unless the corporation has no other workers. Similarly, while some states exclude family members from mandatory coverage, Wisconsin typically includes them when calculating whether a business meets the threshold for required insurance.
Domestic and Agricultural Workers
Certain domestic workers—like in-home caregivers or housekeepers—may be exempt if they work fewer than a set number of hours or earn below a certain income level. Agricultural workers are also treated differently. Farmers aren’t required to carry insurance unless they employ six or more workers on the same day for 20 or more days in a calendar year.
Even if your business fits into an exempt category today, that can change quickly. Hiring just one part-time employee could bring your business under the umbrella of Wisconsin’s workers comp requirements. Keeping an eye on your staffing and business structure is key.
Penalties for Not Meeting Workers Comp Requirements
Failing to meet workers comp requirements in Wisconsin isn’t something that gets brushed off with a warning. The state takes noncompliance seriously, and the consequences can hit both your wallet and your ability to operate legally. Whether you missed the rules or intentionally skipped coverage, the risks are real.
Fines and Financial Penalties
The Wisconsin Department of Workforce Development (DWD) can impose significant penalties if you’re found to be operating without required coverage. Employers who fail to comply may face a fine of up to $1,000 for each day that workers’ compensation insurance was not in place. Those fines can add up quickly—even a short gap in coverage can lead to thousands in penalties.
In addition, the state can order you to stop business operations until proper coverage is secured. That kind of disruption can impact your clients, your income, and your reputation.
Liability for Injuries
If one of your employees is injured while you’re operating without insurance, you may be held personally responsible for all medical costs, lost wages, and disability payments. That’s on top of the penalties from the state. This type of exposure can financially devastate a small business, especially if the injury is serious.
The law also allows the injured worker to sue the employer in civil court—and unlike in a standard workers’ comp claim, they can seek pain and suffering and punitive damages if you didn’t follow the workers comp requirements.
Criminal Charges Are Possible
In some cases, failure to carry proper coverage can even result in criminal prosecution. Business owners may face misdemeanor charges for willful violations of the law. Repeated or extreme cases could be charged more severely, especially if the lack of coverage leads to major financial harm or injury.
Don’t Rely on Luck
Some employers try to roll the dice, assuming no one will get hurt or the state won’t notice. That’s a risky move. The Wisconsin DWD regularly audits businesses, investigates complaints, and receives reports from insurance carriers. If you’re not following workers comp requirements, it’s only a matter of time before it catches up to you.
How Wisconsin Employers Can Stay Compliant
Meeting workers comp requirements in Wisconsin doesn’t have to be complicated, but it does require attention to detail. Whether you’re just launching a business or scaling up, it’s important to understand how to stay on the right track from day one.
Step 1: Determine if Your Business Needs Coverage
The first thing every employer should do is evaluate whether they meet the criteria for mandatory workers’ compensation insurance. Go beyond employee headcount—look at hours worked, total wages paid each quarter, and the roles your team members fill. Even part-time or seasonal employees may trigger coverage requirements.
Step 2: Choose a Reliable Insurance Provider
Once you know coverage is required, the next step is getting insured. Most employers in Wisconsin buy workers’ comp insurance through private insurance carriers. You’re free to shop around and compare quotes based on the type of work your employees do and your business’s history.
For businesses that struggle to find a private insurer willing to write a policy—typically due to high risk or claims history—Wisconsin also offers a residual market program, sometimes referred to as the “assigned risk pool.”
Step 3: Keep Coverage Up to Date
It’s not enough to buy coverage once and forget about it. To meet workers comp requirements, your policy needs to be kept current, and any changes to your business—such as hiring additional employees or changing job duties—should be reported to your insurer.
A common mistake is forgetting to update your coverage after business growth or seasonal hiring. This can leave you exposed, especially if an injury occurs during a period when your insurance details are out of sync with your actual workforce.
Step 4: Stay Informed About State Rules
Workers comp laws can change over time. Employers should periodically check in with the Wisconsin DWD for updates, especially when making changes to their operations. You can also subscribe to DWD bulletins or set calendar reminders to review compliance every quarter.
Being proactive is the best way to stay compliant with Wisconsin’s workers comp requirements. With the right coverage and regular oversight, you can protect your business, support your employees, and avoid costly penalties.
What to Remember About Workers Comp Requirements in Wisconsin
Wisconsin takes workplace protection seriously, and that means business owners need to understand when workers’ compensation insurance is legally required. Whether you run a small family shop or a growing team across multiple locations, your obligations under the state’s workers comp requirements depend on factors like employee count, business structure, and payroll.
To avoid fines, lawsuits, or costly coverage gaps, regularly review your workforce and stay informed about your responsibilities. If you’re unsure whether your business qualifies for an exemption or needs immediate coverage, it’s worth taking a few minutes to check the state guidelines. Staying compliant is one of the simplest ways to protect your employees and your bottom line.