New Mexico

Buying workers’ compensation for:

New Mexico

State Fund: Yes, Competitive - The New Mexico Workers’ Compensation Assigned Risk Pool is supervised by The Workers Compensation Bureau. Employers with poor safety records or in high-risk industries, who cannot get coverage on the commercial market, may acquire coverage from the state assigned risk pool. The pool also provides coverage for many new small businesses until they can acquire coverage on the commercial market. Coverage in the pool is more expensive than in the voluntary market.

Insurance Coverage Requirements: Workers’ Compensation is compulsory in New Mexico, some waivers are permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

All employers which employ three or more workers are required by law to have workers’ compensation coverage. Construction industry employers must obtain coverage regardless of the number of employees.

Employees of a corporation who are also officers or executives of the corporation may choose to exempt themselves from coverage. This exemption is limited to the chairman of the board, president, vice president, secretary, treasurer or other executive officer; and only if that employee owns 10 percent or more of the stock of the corporation. These individuals can exempt themselves by filing an Executive Employee Exemption form with the WCA.

The self-employed owner of a business, who works in the business, is not required to be covered by the business’ policy.

No special exemption is made for family members who are employees. Coverage is required for family members just as for any other employees.

Part-time workers must be counted for the coverage requirement. An employer who has three part-time workers is required to have coverage.

Farm and ranch laborers are specifically exempted from mandatory coverage if they spend the majority of their time in actual growing and harvesting produce, meat or dairy products. However, other workers, such as those who pack, process and transport farm produce, are required to be covered if the farm or ranch employs three or more workers.

An employer in an exempt category who chooses to have coverage must file an Election to Accept form with the WCA.

Factors that Impact Coverage

  • You are a sole proprietor or partner: In New Mexico, you are excluded from coverage but have the option to include yourself. In counting the number of employees to determine whether you must have coverage, owners must be counted.
  • You are a corporate officer or member of an LLC: New Mexico includes you in coverage, but you have the option to exclude yourself if you own 10% or more of the company. However, in counting the number of employees to determine whether you must have coverage, officers or executives who have exempted themselves must be counted.
  • You are a contractor: You must be licensed in New Mexico by the Construction Industries Division. If all your employees are required by law to be licensed by the Construction Industries Division, you must provide workers’ compensation for your business, regardless of the number of employees.
  • You are a real estate salesperson: You are exempt from coverage.

Failure to Secure Compensation

The penalty for not maintaining current workers’ compensation coverage as required by law.

Proof of Coverage is Required

Employers are required to post the Workers’ Compensation Act poster where employees will have access to it.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Key Resources

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.