What is workers’ compensation?
If your business has employees, workers’ compensation insurance is essential to protect your team and company. Workers’ compensation—often called workers’ comp—provides medical benefits and wage replacement for employees who experience work-related injuries or illnesses. In exchange, employees waive their right to sue for workplace negligence.
Homebase simplifies workers' compensation compliance by helping businesses track payroll, ensure proper coverage, and stay updated on state requirements.
Why does your business need workers’ comp coverage?
Workers’ compensation protects both employees and businesses by:
- Covering medical expenses for work-related injuries and illnesses.
- Replacing lost wages while employees recover.
- Shielding businesses from lawsuits related to workplace accidents.
- Ensuring compliance with state laws to avoid penalties.
Since most states require businesses to carry workers’ comp, it’s important to understand your obligations and secure coverage before hiring.
Who needs to carry workers’ compensation insurance?
Each state has different laws, but most businesses must provide coverage if they employ at least one worker. Your obligations depend on:
- State regulations – Some states exempt small businesses, while others require employee coverage.
- Worker classifications – Full-time, part-time, and sometimes even independent contractors may require coverage.
- Industry risks – High-risk industries like construction often have stricter requirements.
Homebase can determine your workers’ compensation requirements and simplify compliance if you are unsure about your state's rules.
What does a workers’ comp policy cover?
A standard workers’ compensation policy includes:
- Medical expenses – Covers hospital visits, surgeries, prescriptions, and rehabilitation costs related to workplace injuries.
- Lost wages – Provides partial wage replacement while an employee is recovering.
- Disability benefits – Supports employees who suffer temporary or permanent disabilities due to a work-related injury.
- Death benefits – Provides financial assistance to an employee’s family in case of a fatal workplace incident.
How can businesses get workers’ compensation insurance?
Employers can obtain workers’ compensation insurance through:
- Private insurance carriers – Businesses purchase coverage from a licensed insurance provider.
- State-run programs – Some states operate workers’ compensation funds for businesses that cannot obtain private coverage.
- Self-insurance: Large businesses may have the option to self-insure, which means they cover claims directly instead of purchasing a policy.
To stay compliant, employers must ensure coverage before hiring employees and update their policy as their workforce grows.
What happens if an employer doesn’t have workers’ compensation?
Failing to carry required workers’ compensation insurance can lead to:
- Fines and penalties – States impose heavy fines for non-compliance.
- Lawsuits – Without coverage, employees can sue employers directly for workplace injuries.
- Business closure risks – Repeated violations can result in license suspension or shutdown orders.
Avoid costly mistakes—Homebase can help you track compliance and integrate workers’ comp management with payroll.
Simplify workers’ comp compliance with Homebase
Keeping up with workers’ comp laws and payroll compliance can be complex, but Homebase makes it easier by:
- Tracking payroll data to ensure accurate reporting
- Helping businesses navigate state-specific workers’ comp rules
- Streamlining compliance so you can focus on running your business
Get started with Homebase today and simplify payroll, workers’ comp compliance, and labor law management—all in one place.