How workers compensation rules differ by state

There is no single US workers compensation system. There are 51, one for each state plus DC, and they fall into three structural categories: NCCI states, independent-bureau states, and monopolistic state funds. Plus Texas, which is its own category because coverage is optional there. This page covers what changes when you cross a state line and where to find the canonical numbers for each jurisdiction.

The three structural categories

NCCI states (36). These states delegate classification and rate filings to the National Council on Compensation Insurance. NCCI publishes loss costs, the state DOI approves them, and carriers either use the loss costs directly with a filed loss-cost multiplier or file their own rates against the bureau base. The 36 states are: AL, AK, AZ, AR, CO, CT, DC, FL, GA, HI, ID, IL, IA, KS, KY, LA, ME, MD, MS, MO, MT, NE, NV, NH, NM, OK, OR, RI, SC, SD, TN, TX, UT, VT, VA, and WV.

Independent-bureau states (11). These states maintain their own rate-service organizations. The bureaus do for their state what NCCI does for the 36-state group: file loss costs or rates, maintain classifications, and publish quarterly or annual updates. The 11 states are California (WCIRB), New York (NYCIRB), New Jersey (NJCRIB), Pennsylvania (PCRB), Delaware (DCRB), Massachusetts (WCRIBMA), Indiana, Michigan (CAOM), Minnesota (MWCIA), North Carolina (NCRB), and Wisconsin (WCRB).

Monopolistic state funds (4). Ohio (BWC), North Dakota (WSI), Washington (L&I), and Wyoming (DWS). Private employers cannot buy workers compensation from a private carrier in these four states. They purchase coverage from the state agency, which is the only legal provider [state-facts/OH.json, state-facts/ND.json, state-facts/WA.json, state-facts/WY.json].

Coverage thresholds: who must carry coverage

Most states require coverage for employers with one or more employees. The exceptions matter.

Texas: optional. Texas private employers can elect to be "non-subscribers" and decline workers compensation coverage entirely [state-facts/TX.json]. Non-subscribers face common-law tort liability for workplace injuries instead of the workers-comp exclusive-remedy framework. Most large Texas employers subscribe; many small employers do not. The Texas Department of Insurance maintains a non-subscriber registry.

Alabama: 5 or more employees. Employers with fewer than 5 regular employees are exempt unless they elect coverage.

Florida: 4 or more in non-construction; 1 in construction. The construction-industry threshold is 1 employee, including subcontractors deemed to be employees. Non-construction businesses are exempt below 4 employees.

Most other states: 1 or more employees. California, New York, Illinois, Pennsylvania, and the majority of states require coverage for any employer with at least one employee. Sole proprietors and LLC members who work only for themselves are typically excluded.

The full thresholds for all 51 jurisdictions are listed on the individual state pages at /state/[code]/.

Maximum weekly benefit: what the cap looks like

Every state caps weekly TTD benefits. The cap is typically tied to the state's average weekly wage and adjusts annually. Sample 2024 caps from our state-facts files:

California: $1,659.23 [state-facts/CA.json]
Washington: $1,412.10 [state-facts/WA.json]
North Dakota: $1,487.50 [state-facts/ND.json]
Ohio: $1,320 [state-facts/OH.json]
Texas: $1,234 [state-facts/TX.json]
New York: $1,196 [state-facts/NY.json]
Wyoming: $1,190 [state-facts/WY.json]

The wage-replacement percentage applied to the worker's actual wage before the cap is usually 66.67% (two-thirds). Texas pays 70% [state-facts/TX.json]. Washington pays 60% [state-facts/WA.json]. Most others sit at 66.67%.

Why does this matter for the employer? Because the benefit cap drives part of the loss-cost calculation. States with higher caps and broader eligibility produce higher average claim costs, which pushes class-code rates up. California has both high caps and high rates. Texas has moderate caps and moderate rates. The relationship is not perfect (loss-cost economics depend on more than the cap), but it is real.

Wage-replacement structure and TTD weeks

Most states pay TTD benefits as a percentage of the worker's average weekly wage, capped at the state maximum, for a maximum number of weeks.

The TTD-week cap varies dramatically:

California, Texas, Wyoming: 104 weeks [state-facts/CA.json, state-facts/TX.json, state-facts/WY.json]
Ohio: 200 weeks [state-facts/OH.json]
North Dakota: 156 weeks [state-facts/ND.json]
New York: 520 weeks [state-facts/NY.json]
Washington: no fixed cap; benefits continue to maximum medical improvement [state-facts/WA.json]

Some states have no TTD cap at all (Washington, Wyoming for certain claim categories) and continue benefits until the worker reaches maximum medical improvement (MMI) or returns to work. Others (California, Texas) cap aggressively at 104 weeks except for designated catastrophic-injury claims.

Permanent partial disability (PPD): scheduled versus impairment-rated

Once a worker reaches MMI with permanent residual impairment, PPD benefits kick in. Two main models:

Scheduled states. Use a fixed schedule of weeks for specific body parts. New York, for example, publishes maximum PPD weeks by body part: shoulder 312 weeks, knee 288 weeks, hand 244 weeks, foot 205 weeks, eye 160 weeks [settlement-charts/NY.json]. Multiply the body-part schedule by the worker's wage-replacement rate (capped) to get the maximum PPD value. New York's full body-part schedule is at /spokes/ and on the state page.

Impairment-rating states. Calculate PPD using the AMA Guides to the Evaluation of Permanent Impairment (most states are on the 6th Edition; California is on the 5th). The impairment percentage is converted to weeks of benefits using a state-specific formula. California uses Labor Code §4660 to apply occupation-and-age modifiers to the whole-person impairment, then converts to dollars under §4658 [settlement-charts/CA.json]. Florida uses §440.15(3) with weeks varying by impairment percentage [settlement-charts/FL.json].

The two models produce dramatically different settlement values for the same injury. A 10% knee-injury impairment in New York is roughly 28.8 weeks at the worker's PPD rate (10% of the scheduled 288 weeks). The same impairment under California's adjusted-impairment system produces a different value depending on age and occupation modifiers.

For the full settlement-calculation walkthrough, see /hubs/settlement-guide.

Statute of limitations

The deadline to file a workers-comp claim after the injury. Most states are 1 or 2 years.

1 year: California, Texas, North Dakota, Ohio, Washington [state-facts/CA.json, state-facts/TX.json, state-facts/ND.json, state-facts/OH.json, state-facts/WA.json]
2 years: New York, Wyoming, and most others [state-facts/NY.json, state-facts/WY.json]

The clock typically starts at the date of injury for traumatic injuries, and at the date of discovery (or date of disablement) for occupational diseases. Tolling provisions exist for cases where the worker did not know the injury was work-related or where the employer failed to file the required first report.

The statute is unforgiving. Late-filed claims are barred even when liability is otherwise clear. If you are within a month of the deadline, retain counsel immediately.

Penalty for non-coverage

The fines for failing to carry workers comp where required are substantial.

California: stop orders, fines up to $100,000, potential criminal charges [state-facts/CA.json]
New York: fines up to $5,000 per 10-day period of non-compliance, stop-work orders, potential criminal charges [state-facts/NY.json]
Wyoming: fines, imprisonment, civil liability for the worker's medical expenses and lost wages [state-facts/WY.json]
Ohio: fines, stop-work orders, criminal charges, plus liability for all medical costs and lost wages of injured employees [state-facts/OH.json]
Washington: fines, penalties, criminal charges, personal liability for injured workers' benefits [state-facts/WA.json]
Texas: must report non-coverage to the state and report all work-related injuries causing more than one day of lost time [state-facts/TX.json]. Texas non-subscribers also lose access to common-law tort defenses (assumption of risk, contributory negligence, fellow-servant rule).

The non-coverage exposure is the largest single risk to small-business workers comp compliance. The next-largest is misclassifying employees as 1099 contractors, which produces the same exposure under a different theory.

Owner exclusion and self-coverage rules

Most states allow business owners to exclude themselves from coverage if they have no employees, or to elect to include themselves. The default and election rules vary by entity type and state.

Sole proprietor self-coverage required: 0 of the 51 jurisdictions in our dataset require sole proprietors to cover themselves. Sole proprietors can typically elect coverage if they want it, but it is not mandatory.
LLC member self-coverage required: Same. LLC members are typically excluded by default and can elect coverage.
Owner exclusion allowed: 48 of 51 jurisdictions allow corporate officers and LLC members to elect exclusion from coverage [state-facts files across all 51].

The mechanics: the owner files a written exclusion election with the carrier (or the state in monopolistic states), and the owner's payroll is removed from the policy. The owner is then not covered for workplace injuries and cannot file a claim. For solo-LLC and S-corp owners with no employees, exclusion is usually the right choice. For owners with employees, the calculus depends on whether the owner performs operations or only supervises.

For details on which states require what, see /spokes/owner-exclusion-rules-by-state.

Subcontractor liability

Most states impose liability on the general contractor when a subcontractor fails to carry workers comp coverage and a sub's employee is injured. The legal theory: the GC is the "statutory employer" for purposes of workers comp.

California: GCs are responsible for ensuring subs carry coverage; otherwise the GC is liable for injuries to the sub's employees [state-facts/CA.json]
New York: GC is liable for benefits to employees of an uninsured sub [state-facts/NY.json]
Texas: If the GC is a subscriber, they can be held liable for injuries to employees of an uninsured sub when the sub's work is part of the GC's usual trade or business [state-facts/TX.json]
North Dakota: GC must ensure subs have coverage; otherwise GC is liable [state-facts/ND.json]
Wyoming: principal contractors are generally liable for injuries to uninsured subs' employees [state-facts/WY.json]

For GCs, the practical implication is the certificate-of-insurance (COI) requirement. Every sub on a job needs a current COI showing workers comp coverage in force, with the GC named as a certificate holder. Without it, the GC's policy gets charged the sub's payroll at audit.

Where to find canonical state data

Every state's full data set is published at /state/[code]/ on this site, including:

The rating authority (NCCI, independent bureau, or monopolistic fund)
Maximum weekly benefit and effective year
TTD and PPD week caps
Death-benefit structure
Statute of limitations
Penalty for non-coverage
Coverage threshold
Owner-exclusion rules
1099 treatment summary
Subcontractor-liability rules
The 50 most-common class codes with rates per $100 of payroll, drawn from our 13,833-cell dataset