(STACKER) — Workers’ compensation, which can provide cash and medical care to employees injured on the job, and benefits to survivors in cases of a work-related death, began with a federal program in 1908. It gave benefits to civilian workers whose jobs were hazardous and became the first kind of social insurance established across the United States.
By 1916, the rest of the federal workforce was covered. States meanwhile were enacting their workers’ compensation laws. All but six states and the District of Columbia had them by 1921.
Today, programs exist in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
The details of each program vary by state. Four states — Ohio, North Dakota, Washington and Wyoming — require insurance be obtained through a state-administered fund rather than through a private insurer. Another option is to self-insure for approved businesses. Most states require some businesses to provide coverage and can levy substantial fines for failing to comply. South Dakota and Texas leave the choice to businesses, although Texas makes an exception for construction companies with a government contract.
Simply Business reviewed rules, statistics, and other information about workers’ compensation insurance — including the comprehensive breakdown by the National Federation of Independent Business — to offer a breakdown of what workers’ comp requirements in each state. Rules are subject to updates periodically, so it’s important to stay up-to-date based on your trade and location.
Workers’ Compensation in California
California requires workers’ compensation coverage be carried by all employers, even if they employ only one person or are corporate officers or directors. Employers based outside of California could also be required to provide coverage if their employees work regularly in the state. Two exemptions: corporate officers or directors who own a company fully and sole proprietors without any employees.
Failing to have workers’ compensation can result in a fine of no less than $10,000, imprisonment in a county jail, or both. In addition, the state can impose penalties of up to $100,000. California offers a state-administered fund.
Workers’ Compensation Benefits, Costs, and Coverage, an October 2021 report from the National Academy of Social Insurance, found that total benefits paid to employees rose by 0.4% nationwide from 2015 to 2019. Cash benefits rose by 2%, but medical benefits fell by 1.1%. Standardized benefits fell— cash by 14% and medical benefits by 16.7%—over the same period.
Keep reading to see what workers’ compensation looks like for other nearby states.
Workers’ Compensation in Arizona
Arizona mandates workers’ compensation coverage for all businesses that hire at least one person, even if they are family members. When is workers comp insurance typically not needed? Working partners, domestic workers in your home, independent contractors and so-called casual workers, hired on an at-need basis, need not be covered. Sole proprietors can choose not to have coverage. Fines for failing to provide coverage start at $1,000 and can rise to $10,000 for a third instance within five years.
Workers’ Compensation in Nevada
Nevada’s workers’ compensation insurance law requires all employers with at least one employee to have coverage. Its exemptions include household workers, farm or horticultural workers, employers that are insured elsewhere and are in Nevada only temporarily, and employees who work less than 20 days for less than $500. In 2020, 707 occupational disease claims were reported in the state. Employers that fail to provide workers’ compensation can be fined up to $15,000, may have to shut down, and will be responsible for the costs of a work-related injury.
This story originally appeared on Simply Business and was produced and distributed in partnership with Stacker Studio.