Maryland Workers Compensation: Employer Requirements
Maryland requires workers compensation from the first covered employee. Exemptions, where to buy a policy, the 10-day report rule, and $25,000 penalties.
Maryland Workers Compensation
Who has to carry it, who sits outside it, where the policy comes from, and the deadlines that decide whether a claim is handled or held against you
A cabinet shop owner in Baltimore County called me after a bad week. He had four people on payroll and a fifth man who came in for two weeks to help finish a rush order. The helper fell off a ladder on day nine. The owner had decided a two-week hire was casual labor and left him off the policy.
He was wrong, and the reason is worth the whole page. Maryland does not ask how many employees you have. It asks whether the person who got hurt was a covered employee, and that question is answered by a long list of definitions rather than by a headcount.
So this page is the Maryland rule sheet: who has to carry coverage, who sits outside it, where the policy comes from, the deadlines, and what the Workers Compensation Commission does to employers who skip it. How workers compensation works as a product is covered in our general workers compensation guide. Hiring, wages, and leave in this state live in the Maryland HR compliance guide.
Who Has to Carry Coverage
Every Maryland employer with even one covered employee has to carry coverage, which the statute calls securing compensation. Labor and Employment Article Section 9-201 applies the workers compensation title to each person who has at least one covered employee.
The Workers Compensation Commission puts it in plain words in its questions and answers for employers: with few exceptions, every employer in the state with one or more employees is required by law to provide coverage.
There is no small employer exemption to grow out of and no waiting period to run down. Part-time, seasonal, and temporary staff count the same as anyone on a full schedule. The employer pays the entire premium, and Section 9-1101 makes deducting any part of it from wages a misdemeanor with a fine of up to $200.
Two coverage tests in the exclusions table below, one for farm labor and one for domestic workers, use numbers that look like thresholds, but neither is a general exemption. Both sit inside the definition of a covered employee. They decide whether one particular worker is covered, not whether a small business gets to skip insuring its staff.
Who Sits Outside Coverage
Maryland decides who sits outside coverage through elections and definitions, not through a single exemption list. For owners, the default flips with the way the business is organized: proprietors and partners start outside coverage, while corporate officers and LLC members start inside it.
| Worker | How Maryland treats them |
|---|---|
| Sole proprietor | Outside coverage unless the proprietor elects in, and the proprietor must devote full time to the business (Section 9-227) |
| Partner in a partnership | Outside coverage unless the partnership elects the partner in, and the partner must devote full time (Section 9-219) |
| Corporate officer or LLC member | Inside coverage when paid for services. May elect out only in the categories listed in Section 9-206, and no more than five officers of an ordinary corporation may elect |
| Domestic worker in a private home | Covered as to a household once the worker earns at least $1,000 in cash from that household in a calendar quarter (Section 9-209) |
| Farm labor | Covered when the farmer has at least 3 full-time employees or an annual payroll of at least $15,000 for full-time employees (Section 9-210) |
| Casual employee | Not a covered employee (Section 9-205) |
| Short-term maintenance or repair help | Outside coverage for 30 consecutive work days or fewer, and only at the employer’s private home or at a business with no other covered employee (Section 9-214) |
| Independent contractor | No blanket exclusion. Section 9-236 pulls in a worker who keeps no separate business, does not offer the service to the public, and has no covered employee of their own |
| Licensed real estate salesperson or associate broker | Excluded when affiliated by written agreement, paid solely by commission, and an independent contractor for federal tax purposes (Section 9-222) |
| Volunteer paid only in aid or sustenance by a charity or religious organization | Not a covered employee (Section 9-235) |
An election is a filing, not a decision you keep in a drawer. A sole proprietor may elect in only while devoting full time to the business, and the election takes effect when written notice naming the individual reaches both the Commission and the insurer. The same notice rule governs a partnership electing a partner in and a company electing an officer or member out.
Officers get the narrowest path. An officer of a corporation or a member of an LLC is a covered employee whenever the company pays for services, and staying off the policy is the exception.
The exemption in Section 9-206 opens only for listed situations, starting with officers of a close corporation, up to five officers of an ordinary corporation, and LLC members owning at least 20 percent of the profit interests.
The same exemption covers two more categories, each with a stock test: officers of a farm corporation earning at least 75 percent of its income from farm operations who hold at least 20 percent of the stock, and officers of a professional corporation who hold at least 20 percent and perform the professional service.
Subcontractors and Classification
An uninsured subcontractor becomes your claim. Whenever a contractor subcontracts part of the work of its own business, occupation, or trade, Section 9-508 makes that principal contractor liable for the compensation it would have owed if the worker had been hired directly. In that claim the principal contractor is treated as the employer, and the sub can be joined as a defendant afterward.
That is a paperwork problem with a paperwork answer. Collect a certificate before the crew starts, and confirm it against the Commission's public employer coverage verification tool rather than trusting a document someone emailed you. Insurance lapses quietly, and a certificate issued in March proves nothing about a job in September.
Calling the crew contractors does not settle the question either. Section 9-236 makes a worker a covered employee when the worker keeps no separate business, does not offer the service to the public, and has no covered employee of their own.
Getting that call wrong costs money in every industry. Under Section 9-402.1, the Commission orders an employer that misclassified an employee to secure coverage for that worker, and a knowing misclassification draws a civil penalty of up to $5,000.
Construction and landscaping employers carry a heavier exposure under the Workplace Fraud Act, where work performed for pay is presumed to create an employment relationship and knowing worker misclassification draws a civil penalty of up to $10,000 for each individual.
Where You Buy the Policy
Maryland is a competitive market, not a monopolistic fund state where one state fund sells every policy. Coverage comes from any insurance company licensed to write workers compensation here, from Chesapeake Employers Insurance Company, from a self-insurance plan approved by the Commission, or from a self-insurance group of private employers formed under the Insurance Article. The Maryland Insurance Administration licenses the carriers and takes their rate filings.
Chesapeake Employers is the guaranteed market. The Maryland Manual describes it as providing coverage access to any employer who applies, regardless of company size or claims record, which is the practical answer for a brand-new business or one carrying a rough loss history.
Chesapeake Employers began as the State Accident Fund in 1914 and converted to a nonprofit private corporation in October 2013, so it competes for ordinary accounts as well.
What Self-Insurance Actually Takes
Self-insurance is a real option and a poor fit for most small employers. The Commission's published answer for employers frames it as a choice for companies with a net worth of $10 million or greater.
The current application, form A-05 revised in July 2026, asks for audited financial statements covering up to five fiscal years, a $250 nonrefundable fee, a minimum security deposit of $200,000 that the Commission usually sets higher, and specific excess insurance (coverage for any single claim above a set amount) from a carrier rated A minus or better.
Approval does not end the costs. Approved self-insurers pay roughly 20 cents per $1,000 of Maryland payroll in assessment, $1,500 a year toward audit and actuarial studies, and assessments on awards for the Subsequent Injury Fund and the Uninsured Employers' Fund. They also owe an annual information report and audited statements within 120 days of fiscal year end.
FirstHR is an HR platform, not an insurer or a broker, so we do not sell any of this. We just get asked which door to walk through.
Posting Rules and New Hires
One notice has to be on the wall and one form has to be within reach. COMAR 14.09.01.10, part of the Code of Maryland Regulations, requires an employer to keep conspicuously posted, at every place of employment it controls, the written notices provided by the Commission or by the insurance carrier, or prepared by the employer if it self-insures.
The notice is the Commission's Employer's Posting Notice, form C-24, in English and Spanish on one sheet. The format is part of the rule: 8.5 by 14 inch legal paper in goldenrod or yellow, printed at 600 dots per inch, with complete employer and insurer information filled into the lower left corner, posted in a conspicuous location at each worksite.
The Commission states that reduced-size or otherwise altered reproductions do not constitute statutory compliance, so a letter-size printout of the same artwork is not a posted notice.
Nothing in the workers compensation title has to be handed to a new hire. What you do owe employees is constant access to the claim form: the Commission requires employers to keep claim forms available for employees at all times. Filing now runs through the Commission portal, so the setup that survives an audit is a printed stack plus the online link on the same board.
One handout rule does exist, but it comes from the Workplace Fraud Act. Construction and landscaping employers must give every person they classify as an independent contractor or exempt person a written notice of that classification at the time of hire, in English and Spanish, explaining what it means.
Skipping the classification notice can cost a civil penalty of up to $50 for each day it is not provided. That is a small number, but it compounds quietly.
The Reporting Clock
The employer deadline is 10 days from notice, and it is the one that carries a criminal penalty. When an accidental injury causes disability for more than 3 days or the employee dies, Section 9-707 requires the employer to report it to the Commission on the First Report of Injury within 10 days of receiving notice, oral or written, with a copy to the carrier.
| Who | What they file | Deadline |
|---|---|---|
| Employee | Tells the employer about an accidental injury, orally or in writing | Within 10 days of the injury (Section 9-704) |
| Dependents | Tell the employer about a work-related death | Within 30 days of the death (Section 9-704) |
| Employee | Gives written notice of an occupational disease | Within 1 year of knowing or having reason to believe (Section 9-705) |
| Employer | Files the First Report of Injury with the Commission when disability runs more than 3 days or the employee dies | Within 10 days of oral or written notice (Section 9-707) |
| Employer | Reports an occupational disease disability to the Commission | Promptly after learning of it (Section 9-707) |
| Employee | Files the claim form with the Commission after an accidental injury | Within 60 days, and completely barred after 2 years (Section 9-709) |
| Employee | Files an occupational disease claim | Within 2 years of disablement, death, or knowledge, and 3 years for pulmonary dust disease (Section 9-711) |
Two details in that table decide cases. Late notice from an employee is often forgivable: Section 9-706 tells the Commission to excuse it when there was sufficient reason or when the employer and insurer were not prejudiced (harmed by the delay), and the burden of proving prejudice sits with the employer.
Late reporting by the employer is not forgivable in the same way. A knowing failure to file the 10-day report is a misdemeanor carrying a fine of up to $500.
The quieter consequence is in Section 9-708. When the employer had notice of the injury, the two-year limitation that would otherwise bar a claim does not start running until the employer files its report. Skipping the filing does not close the file. It keeps the file open indefinitely, which is the opposite of what the owner who skips it believes.
What Going Without Coverage Costs
The headline number is $25,000. The Commission's insurance compliance page states that effective July 1, 2024, an employer that fails to secure compensation for all covered employees may face a penalty not to exceed $25,000.
Section 9-407 sets out the process behind that figure: a show cause hearing, where the employer has to explain why it should not be penalized, then an order to insure and to submit proof, and the penalty paid to the Uninsured Employers' Fund.
| Exposure | What it means |
|---|---|
| Penalty up to $25,000 | Ordered by the Commission after a show cause hearing and paid to the Uninsured Employers’ Fund (Section 9-407) |
| A second penalty up to $25,000 | If the employer does not insure within 30 days of the order to insure (Section 9-407) |
| Lien on business assets | The penalty is a lien subordinate only to unpaid wages and prior recorded liens, and the Fund may sue to collect it |
| Personal liability | An officer or LLC member responsible for general management is jointly and severally liable when the company cannot pay and knowingly failed to insure |
| Loss of the exclusive remedy | The injured worker may sue for damages instead of claiming benefits, and the employer may not plead assumption of risk, contributory negligence, or the fellow servant rule (Section 9-509) |
| Licenses and permits | No government unit may issue a license or permit without a certificate of compliance or a policy number, and a default on an award triggers notice that the license may be suspended (Sections 9-105 and 9-1002) |
| Criminal exposure | Failing to secure coverage is a misdemeanor with a fine up to $5,000, up to 1 year in jail, or both, and the officer responsible for general management of a corporation faces the same (Section 9-1107). Knowingly missing the 10-day injury report is a misdemeanor with a fine up to $500, and deducting premium from wages is one with a fine up to $200 |
| Doubled benefits | If a minor hired without the required work permit is hurt or killed, the Commission may double compensation and death benefits, and no policy covers the increase |
Maryland enforcement does not arrive as a stop work order taped to the door. It runs through the Commission, through your licenses and, under Section 9-1107, through the criminal courts, which is slower and harder to walk away from.
No government unit may issue a license or permit for an activity that might involve a covered employee without a certificate of compliance or a policy number. Defaulting on an award, meaning failing to pay compensation the Commission awarded, triggers formal notice that your license to do business in the state may be suspended.
The exposure that ruins a small company is not the fine. It is Section 9-509. An employer without coverage loses the exclusive remedy, the rule that normally makes a benefits claim the injured worker's only route against you. The worker can now choose between a claim and a lawsuit.
In that lawsuit the employer may not plead assumption of risk, contributory negligence, or the fellow servant rule, the defenses that would otherwise shift blame to the worker or a coworker. The statute that normally caps your downside stops applying at the moment you needed it.
What to Do the Day Someone Gets Hurt
Run the same sequence every time, and write down the times. Most disputes in Maryland turn on when the employer learned about the injury, and that fact is usually established by whatever the supervisor wrote in the first hour.
The part small employers skip is step two. A supervisor hears about a sore back on Tuesday, nobody writes it down, and six weeks later the argument is about whether notice ever happened. Keeping incident records, notices, and acknowledgments in one system rather than in memory is the sort of quiet recurring task FirstHR was built to hold for teams without a dedicated HR person.
Frequently Asked Questions
Does a Maryland business need workers compensation with only one employee?
Yes. The workers compensation title applies to every person with at least one covered employee, and the Commission says the same thing in its employer guidance. Part-time and seasonal staff count. The farm labor test of 3 full-time employees or $15,000 in annual full-time payroll, and the $1,000 per calendar quarter test for a domestic worker in a private home, decide whether that particular worker is covered. They are not small business exemptions.
Can the owner stay off the policy?
It depends on the entity. A sole proprietor or a partner is outside coverage unless an election brings them in, and the person has to devote full time to the business. An officer of a corporation or a member of an LLC is inside coverage whenever the company pays for services, and can elect out only in the narrow categories of Section 9-206. Either way the election is effective only when written notice naming the individual reaches the Commission and the insurer.
How fast does the employer have to report an injury?
Within 10 days of getting notice, when the injury causes disability for more than 3 days or the employee dies. The report goes to the Commission with a copy to the carrier. Occupational disease is reported promptly instead. Knowingly missing the deadline is a misdemeanor with a fine up to $500, and the failure also stops the two-year claim limitation from starting, which leaves the exposure open rather than closing it.
What happens to an employer with no coverage?
A show cause hearing, an order to buy insurance and prove it, and a penalty of up to $25,000 paid to the Uninsured Employers' Fund. A second penalty of up to $25,000 follows if the coverage does not appear within 30 days. The penalty becomes a lien on business assets, a manager who knowingly skipped coverage can be personally liable, and the injured worker gains the right to sue for damages with the usual employer defenses stripped away. Going uninsured is also a misdemeanor under Section 9-1107: a fine up to $5,000, up to 1 year in jail, or both, and the same for a corporation's officer responsible for general management.
Where does the policy come from?
Any carrier licensed to write workers compensation in Maryland, Chesapeake Employers Insurance Company as the guaranteed market, an approved self-insurance plan, or a private employer self-insurance group. This is a competitive market rather than a state monopoly, so a small employer shops it the way it shops other business coverage. FirstHR does not sell insurance and has no stake in which door you use.
Which notice has to be posted?
The Commission's Employer's Posting Notice, form C-24, printed on legal size goldenrod or yellow paper with your employer and insurer details in the lower left corner, posted conspicuously at each worksite. Reduced or altered copies do not count. No workers compensation document has to be handed to a new hire, though claim forms must stay available to employees at all times.
Am I liable for a subcontractor's injured worker?
Frequently. When you subcontract part of the work of your own business and the sub has no coverage, Section 9-508 makes you liable for the compensation as though you had hired the worker directly. You can join the sub afterward and seek indemnity, but the claim hits you first. Verify coverage through the Commission's public verification tool before work starts, and again on long jobs.