Buying workers’ compensation for:


State Fund: Yes, Competitive

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Oklahoma, waivers are not permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

Any person, partnership, association, limited liability company, corporation, and the legal representatives of a deceased employer, or the receiver or trustee of a person, partnership, association, corporation, or limited liability company, departments, instrumentalities and institutions of this state and divisions thereof, counties and divisions thereof, public trusts, boards of education and incorporated cities or towns and divisions thereof, employing a person, is required to provide workers’ comp insurance coverage. There is no numerical exemption, with the exception of an employer with five or less total employees, all of whom are related by blood or marriage to the employer.

NOTE: On March 14, 2007, the Oklahoma Attorney General issued an opinion on the “family of five or fewer exemption” to the Oklahoma Workers’ Compensation Act. The “family of five or fewer exemption” provides that “An employer with five or less total employees, all of whom are related by blood or marriage to the employer, will be exempt from the Workers’ Compensation Act.”

The opinion of the Attorney General states, “The exemption from the Workers’ Compensation Act applies only to employers who are natural persons, such as sole proprietors, and does not apply to employers who are artificial persons, including but not limited to corporations, partnerships and limited liability companies.”

Only sole proprietors will be able to claim the exemption to be eligible for a policy endorsed with the family exemption. Corporations, partnerships and limited liability companies are no longer eligible for the exemption. Unless otherwise exempt from the Workers’ Compensation Act, family members working for corporations, partnerships and limited liability companies will be deemed employees of the business.

Exempt employees:

  • Any person who is employed as a domestic servant or as a casual worker in and about a private home or household, which private home or household had a gross annual payroll in the preceding calendar year of less than Ten Thousand Dollars ($10,000.00) for such workers.
  • Any person for whom an employer is liable under any Act of Congress for providing compensation to employees for injuries, disease or death arising out of and in the course of employment including, but not limited to, the Fed-eral Employees’ Compensation Act,2 the Federal Employers’ Liability Act,3 the Longshoreman’s and Harbor Workers’ Act4 and the Jones Act,5 to the extent his employees are subject to such Acts.
  • Any person who is employed in agriculture or horticulture by an employer who had a gross annual payroll in the preceding calendar year of less than One Hundred Thousand Dollars ($100,000.00) cash wages for agricultural or horticultural workers.
  • Any person who is a licensed real estate sales associate or broker, paid on a commission basis.

Factors that Impact Coverage

  • You are a sole proprietor or partner: In Oklahoma, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer or member of an LLC: Oklahoma excludes officers and members owning 10% or more stock, but you may elect to include yourself.
  • You have five or fewer employees and all are family: Under Oklahoma’s "family of five or fewer" exception, you are exempt from providing workers’ compensation.

Failure to Secure Compensation

Failure to provide compensation willresult in an employer being charged with a misdemeanor and subject to a fine of not more than $1,000.00 or imprisonment in the county jail for not more than 6 months, or both a fine and imprisonment.

Proof of Coverage is Required

This notice must be posted and maintained by the employer in one or more conspicuous places advising employees that they are covered by the Workers’ Compensation Act and that workers’ compensation counselor services are available at the Workers’ Compensation Court. No other notice to the employee is required.

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.