Pennsylvania

Buying workers’ compensation for:

Pennsylvania

State Fund: Yes (Competitive)

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Pennsylvania. Waivers are not permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

The requirement to insure workers’ compensation liability is mandatory for any employer who:

  • employs at least one employee who could be injured or develop a work-related disease in this state, or
  • could be injured outside the state if the employment is principally localized in Pennsylvania, or
  • could be injured outside the state, while under a contract of hire made in Pennsylvania, if the employment is not principally localized in any state, if the employment is principally localized in a state whose workers’ compensation laws do not apply, or the employment is outside the United States and Canada,

UNLESS all employees are excluded from the provisions of Pennsylvania’s workers’ compensation laws.

Exclusions to the Coverage Requirements

An employer may be excluded from the requirement to insure its workers’ compensation liability only if ALL workers employed by it fall into one or more of the following categories:

  • Federal Workers
  • Longshoremen
  • Railroad Workers
  • Casual workers whose employment is casual in character AND not in the regular course of the business of the employer.
  • Persons who work out of their own homes or other premises not under the control or management of the enterprise AND make up, clean, wash, alter, ornament, finish, repair, or adapt articles or materials for sale that are given to them.
  • Agricultural laborers earning under $1200 per person per calendar year AND no one agricultural laborer works 30 days or more per calendar year AND/OR the agricultural labor is provided by the employer’s spouse or child(ren) under the age of 18 who have not sought inclusion under Pennsylvania’s workers’ compensation laws by filing an express written contract of hire with the Department.
  • Domestic workers who have not elected with the Department of Labor and Industry to come under the provisions of the Workers’ Compensation Act.
  • Sole proprietor or general partners.
  • Persons granted exemption due to their religious beliefs by the Department of Labor and Industry.
  • Executive officers who have been granted exclusion by the Department of Labor and Industry. You must complete and file an "Application for Executive Officer Exception," form LIBC-509, concurrently with the appropriate number of properly executed "Executive Officer’s Declarations," form LIBC-513
  • Licensed real estate salespersons or associate real estate brokers affiliated with a licensed real estate broker or licensed insurance agents affiliated with a licensed insurance agency, under a written agreement, remunerated on a commission-only basis and qualifying as independent contractors for State tax purposes or for Federal tax purposes under the Internal Revenue Code of 1986.

NOTE: Unless ALL employees meet one or more of the above exclusions, the employer must insure its workers’ compensation liability, even if the employees are working limited part-time hours or are family members such as a spouse or children.

Elections to Include Domestic Workers

An employer may elect to include its domestic workers by completing an "Employer’s Application to Elect Domestic Employees to Come Within the Provisions of the Workers’ Compensation Act: Section 321, and filing the same with the Compliance Section, Bureau of Workers’ Compensation, then insuring its liability as described above. This must be done annually.

Factors that Impact Coverage

  • You are a sole proprietor, partner or member of an LLC: In Pennsylvania, you are excluded from coverage.
  • You are a corporate officer: Pennsylvania includes you in coverage, but you have the option to exclude yourself.
  • You are a real estate agent or broker: If you qualify as an independent contractor for tax purposes and are paid on a commission-only basis, you are exempt from workers’ compensation coverage.

Failure to Secure Compensation

An uninsured employer faces civil and criminal risks for failing to maintain continuous workers’ compensation coverage. Not only can the employee sue the employer in tort for work-related injuries or diseases, in which suit the employee may recover amounts in excess of those allowed under workers’ compensation, but the employer and those individuals responsible to act on its behalf may each be criminally charged for each day’s failure to maintain continuous workers’ compensation coverage.

Misdemeanor convictions can result in the potential imposition of a $2,500 fine and up to one year imprisonment for each day the employer is in violation of the requirement to maintain worker’s compensation coverage. Felony convictions can result in the potential imposition of a $15,000 fine and up to seven years imprisonment for each day the employer intentionally violated this requirement. Also, the employer and those individuals responsible to act on its behalf may be required to pay all benefits awarded by a workers’ compensation judge.

The Bureau of Workers’ Compensation investigates employer compliance with workers’ compensation laws and may initiate the filing of charges against employers and individuals responsible to act on its behalf if workers’ compensation coverage is not continuously maintained.

Any individual, including competitors, may seek county district attorney approval to file a private criminal complaint against an employer who fails to maintain worker’s compensation coverage when required to do so.

The workers’ compensation information specified in subsection (b) of the rule must be provided to every employee at the time of hire and immediately after the injury, or as soon thereafter as possible under the circumstances of the injury. If the employee’s injuries are so severe that emergency care is required, the information shall be given as soon after the occurrence of the injury as is practicable.

Proof of Coverage is Required

Employers are required to post form LIBC-500, "Remember: It is important to tell your employer about your injury," to inform employees of the name, address and phone number of their workers’ compensation insurance company, their third-party administrator or internal workers’ compensation contact person.

The workers’ compensation information specified in subsection (b) of the rule must be provided to every employee at the time of hire and immediately after the injury, or as soon thereafter as possible under the circumstances of the injury. If the employee’s injuries are so severe that emergency care is required, the information shall be given as soon after the occurrence of the injury as is practicable.

There is no State form available from the Pennsylvania Bureau of Workers’ Compensation. The form must contain the pertinent information and be printed on paper no smaller than 8 1/2 x 11 and in font no less than 11 pt.

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.