Massachusetts Workers' Compensation Insurance

LLC members, LLP partners, and sole proprietors are not required to carry coverage on themselves, though this exemption never extends to any employees they hire, who must still be covered. Corporate officers who own at least 25% of the corporation can request an exemption for themselves using the state's affidavit of exemption, but again, this doesn't exempt the corporation's actual employees. Because the exemption thresholds differ by entity type (a flat exclusion for LLC members/partners/sole proprietors versus a 25%-ownership test for corporate officers), it's worth confirming which rule fits a given ownership structure before assuming exemption applies.

An employer without required coverage can be issued a stop-work order that halts all business operations; paying $100 per day of noncompliance can avoid the order taking effect initially, but that daily penalty rises to $250 per day once the violation is confirmed after a hearing. Separately, failing to provide required coverage is a criminal offense carrying a fine of up to $1,500, up to one year of imprisonment, or both, with a corporation's president or treasurer personally liable; a repeat violation after notice is treated as an additional offense with its own fines and imprisonment. Noncompliant employers can also lose business licenses and permits, face a three-year debarment from state and municipal contracts, and have liens placed against their property for unpaid penalties (M.G.L. c. 152, § 25C).

Massachusetts is a competitive market state rated by its own independent bureau, the Workers' Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA), rather than NCCI, and our agency can compare coverage across the many private carriers writing business here. There is no Massachusetts state-run workers' comp fund; employers who can't find a voluntary carrier are placed through WCRIBMA's residual market mechanism. Because Massachusetts requires coverage regardless of headcount, even a business with a single part-time employee needs a policy in place from day one.