Massachusetts Workers Compensation Rules for Employers
Massachusetts requires workers compensation from the first employee. Who is exempt, where to buy the policy, the injury deadlines, and the penalties.
Massachusetts Workers Compensation
Who must be covered, who is left out, where the policy comes from, and what happens if you skip it
A Boston café owner once told me she did not need workers compensation because her three staff were all part-time students. She had read something about hours thresholds, applied it to the wrong state, and run an uninsured business for two years without knowing it. Nobody got hurt. That is the only reason the story has a boring ending.
Massachusetts has no hours threshold and no headcount threshold. Coverage is owed from the first employee, whether that person works forty hours or four, and the state enforces it with a stop work order that closes the business rather than a bill that arrives later.
This page covers one jurisdiction and one topic. How the system works in general, the trade of guaranteed benefits for the right to sue, sits in our guide to workers compensation insurance. The rest of Massachusetts employment law lives in the Massachusetts HR compliance guide.
Which Massachusetts Employers Must Carry Coverage
All of them, from the first employee. The Department of Industrial Accidents states that every employer operating in Massachusetts must carry workers compensation insurance for its employees, and for the owner too if the owner is an employee of the company, no matter how many hours anyone works and no matter how many people are on the payroll.
The statute behind that sentence is M.G.L. c. 152, § 25A, and it gives you exactly two lawful routes: insurance with an insurer or membership in a workers compensation self-insurance group, or an annual self-insurer license from the department. There is no third option and no small employer exemption to sit under.
| If your business is a | Do the owners need coverage? | What the department adds |
|---|---|---|
| Sole proprietorship | No, not for the owner | Employees must be covered from the first hire. The owner may buy coverage voluntarily, which customers and general contractors often ask for |
| Partnership, LLP or LLC | No, not for partners or members | The exemption covers only the partners and members themselves. Anyone else on the payroll must be covered |
| Corporation | Yes, unless an officer files for the exemption | An officer who owns at least 25 percent of the corporation may file Form 153 to be left off the policy. Non-officer employees still must be covered |
| Family business of any form | Yes, for the relatives on the payroll | Family members must be covered even if they are the only employees of the business |
| Household employer | Coverage owed at 16 hours a week | Domestic service is the one hours-based carve-out in the state |
| Out-of-state employer working in Massachusetts | Yes, for employees working in the Commonwealth | A policy listing Massachusetts in item 3A satisfies it. An all-states 3C policy needs Form 154 filed by your carrier to verify coverage here |
The out-of-state row is the one that catches growing companies. If your policy names Massachusetts only under the all-states wording in item 3C, the state does not take that at face value: it wants the carrier to submit Form 154 verifying that coverage actually reaches workers in the Commonwealth. Read the department's insurance requirements page before you assume your home-state policy travels.
People working from home in another state raise the mirror-image question, and the answer follows the work rather than the headquarters. That problem has its own write-up in workers comp for remote employees.
Who Is Left Out of the Massachusetts Requirement
The list is short and it is mostly about who is not an employee, rather than which employers are too small to bother. Massachusetts defines an employee at M.G.L. c. 152, § 1(4) as every person in the service of another under any contract of hire, express or implied, oral or written, and then names a handful of exceptions.
| Who | Does Massachusetts require coverage? | The detail that catches employers |
|---|---|---|
| Sole proprietor, the owner | No | Not required to cover himself or herself. May buy coverage voluntarily since the 2002 amendment |
| Partners and LLC or LLP members | No | The exemption is for the members themselves only, and it never reaches their staff |
| Corporate officers owning 25 percent or more | Only if they do not file Form 153 | Officers are covered by default. Getting out takes the affidavit, signed by every eligible officer, filed with the department |
| Family members on the payroll | Yes | The department says relatives must be covered even when they are the only employees of the business |
| Domestic and household workers | Yes at 16 or more hours a week | The chapter stays elective for seasonal, casual or part-time domestic servants, part-time meaning under 16 hours a week |
| Seamen in interstate or foreign commerce | No | Excluded from the definition of employee |
| Real estate and consumer goods salespeople | No, in narrow conditions | Commission or buy-sell basis outside a retail establishment, with a written contract stating they are not employees for federal tax purposes |
| Taxi drivers leasing their cabs | No, in narrow conditions | Lease fee unrelated to fares collected, and not treated as an employee under federal tax law |
| Workers covered by a federal program | No | People in interstate or foreign commerce covered by federal injury or death compensation law sit outside chapter 152 |
| Independent contractors | No, if the classification survives the test | Massachusetts presumes employee status under M.G.L. c. 149, § 148B and the burden is on the business to rebut it |
| A subcontractor’s employees | The subcontractor covers them | Under § 18 an insured contractor’s insurer pays compensation to an uninsured subcontractor’s employees, then seeks indemnity |
The independent contractor row is where Massachusetts is harder than most states. Under the three-part test in c. 149, § 148B a worker is presumed to be an employee unless the business shows the work is done free of its direction and control, is performed outside the usual course of its business, and is done by someone who has an independent trade of that kind. All three have to be true at once.
That middle prong is what defeats most classifications. A bakery that hires a baker as a contractor fails it before anyone looks at control. If your team includes people you pay on a 1099 and treat like staff, work through employee versus contractor and worker misclassification before the department does.
Subcontractors deserve their own line. Section 18 makes an insured contractor's insurer pay compensation to the employees of an uninsured subcontractor as if the sub had carried a policy, with a right to recover afterward. That is exactly why general contractors demand certificates of insurance, and why the department's page on who is covered warns homeowners that they can be liable when a contractor is hurt in their house.
Where a Massachusetts Employer Buys the Policy
From the private market. Massachusetts does not run a state fund, competitive or monopolistic, so you buy a policy from an insurance company directly or through an agent or broker, or you qualify to self-insure. The Division of Insurance approves rates, classifications and rating plans, and the Workers' Compensation Rating and Inspection Bureau publishes the classification codes that carriers rate against.
The department is explicit that it does not set rates or codes itself, which matters when a carrier quotes you a number and blames the state for it. Premium comes from your classification, your payroll and your own loss record, and the state's guidance on getting a policy is the neutral starting point. FirstHR is not an insurer or a broker and does not sell coverage, so read this section as a map of the market rather than a recommendation.
| Route | How you get there | What to watch |
|---|---|---|
| Voluntary market | Buy from any licensed carrier, direct or through an agent or broker | Classification and payroll drive the premium, adjusted by your own loss experience |
| Assigned risk pool | Your agent applies to the Workers’ Compensation Rating and Inspection Bureau after two companies issue rejection notices | You are assigned to a servicing carrier at the same rate, but certain premium discounts are not available |
| Self-insurance | Apply to the Department of Industrial Accidents for an annual self-insurer license | Deposit or bond with the state treasurer plus reinsurance. Practically limited to large employers |
| Self-insurance group | Join a group of similar employers licensed under §§ 25E to 25U and regulated by the Division of Insurance | The group, not the member, carries the capital tests and the members share liability |
| State fund | Does not exist in Massachusetts | Not applicable |
Two pool details are worth money. If you land in the assigned risk pool and pay more than $5,000 a year in premium, the Division of Insurance suggests your agent keep looking for voluntary coverage, which can restore a premium discount. Pool employers can also earn credits of up to 15 percent by hiring a qualified loss management firm.
Mid-term cancellation is limited. An insurer may cancel only for non-payment of premium, for fraud or material misrepresentation, or for a substantial increase in the hazard being insured. A pool employer facing a cancellation it believes is unjustified has ten days to appeal to the department's Office of Insurance, which can hold the cancellation until the dispute is resolved.
Whatever route you take, the premium you pay at the start is an estimate. It gets trued up afterward against actual payroll and classifications, and that process is where small businesses lose money they did not budget for. Our walkthrough of the workers compensation audit covers what the auditor asks for.
What Qualifying to Self-Insure Takes
More scale than a small business has. Section 25A lets the department license an employer to pay its own compensation, but only against a sworn statement of assets and liabilities, a payroll report, a deposit of securities with the state treasurer or an annual surety bond of at least $20,000, and reinsurance of at least $500,000 to absorb a catastrophic loss.
The department's own regulation sets the practical bar far higher than the statutory minimums. Under 452 CMR 5.00 a license is aimed at qualified employers with at least 300 employees and $750,000 in annual standard premium, and a new applicant must generally have been in business for five years, though the director may waive that for good cause. The Office of Self Insurance re-evaluates every licensee each year and resets the bond.
The group route is the one a mid-sized employer might realistically reach. Self-insurance groups formed under §§ 25E to 25U are regulated by the Division of Insurance, and a group must carry at least $250,000 in annual gross premium, a combined provable net worth of at least $1,000,000 for groups of private employers, and a security bond or deposit of at least $100,000. Members share liability for the group's obligations, which is a real trade rather than a discount.
The Poster, and What You Owe a New Hire
Massachusetts requires both a posting and a written notice at hire, and most employers only know about the first one. The Notice to Employees poster has to be filled out completely, naming the insurance carrier, the carrier address, the policy number and a contact person to whom injuries or incidents should be reported. There is an optional space to name a designated healthcare provider for initial treatment.
The department revised the poster in July 2024 and set new notice rules in the same circular letter. Post it in a visible location that all employees use and can reach. If no such location exists, the poster has to be distributed to employees electronically or by mailing a copy, and it must be updated, reposted and redistributed whenever any of the information on it changes. It is published in several languages besides English, including Arabic, Cape Verdean, Chinese, Haitian Creole, Khmer, Portuguese, Spanish and Vietnamese.
Then there is the part that reads like a footnote and is not. M.G.L. c. 152, § 21 requires an insured employer, as soon as it secures a policy, to give written or printed notice to all persons under contract of hire that it has provided for payment to injured employees. Section 22 requires the same written notice to every person the employer is about to enter into a contract of hire with. That is a new hire document, owed before the person starts.
| Notice | When it is owed | Who receives it |
|---|---|---|
| Notice to Employees poster | Continuously, updated whenever the carrier, policy number or contact changes | Posted where all employees can see it, or distributed electronically or by mail if no such place exists |
| Written notice of coverage under § 21 | As soon as the employer secures a policy | Everyone already under a contract of hire |
| Written notice of coverage under § 22 | Before entering into the contract of hire | Each incoming new hire |
| Notice that coverage has ended | On or before the day the policy expires | All persons under contract with the employer, with a copy filed with the department. No notice is required on a renewal |
The department calls failure to give employees the carrier information a violation of the law that exposes the employer to a fine, and the fix costs nothing. Put a completed copy of the poster into the onboarding packet, have the new hire acknowledge it, and both § 22 and your evidence problem are solved on day one. Read the department's circular letter on the revised poster for the exact wording it relies on.
Injury Reporting Deadlines in Massachusetts
Two clocks run, and only one of them has a number on it. The employee side has no fixed day count: notice is owed as soon as practicable, and a late notice is usually forgiven. The employer side is precise, and it is triggered by lost time rather than by the accident itself.
| What has to happen | Deadline | Who does it | Authority |
|---|---|---|---|
| Employee gives notice of the injury | As soon as practicable after it happens | Employee, or someone on the employee’s behalf | M.G.L. c. 152, § 41 |
| Missing or late notice | Not a bar if the insurer, insured or agent knew of the injury, or was not prejudiced | Decided on the facts | M.G.L. c. 152, § 44 |
| Injury becomes reportable to the state | When the employee cannot earn full wages for 5 or more full or partial calendar days, consecutive or not | Employer counts the days | M.G.L. c. 152, §§ 6 and 29 |
| Employer files Form 101 with the department | Within 7 calendar days, not counting Sundays and legal holidays, after the 5th day of disability | Employer, electronically through a department online account | M.G.L. c. 152, § 6 |
| Copies of that notice | Same filing | To the division, the employee and the insurer | M.G.L. c. 152, § 6 |
| Fewer than 5 days of disability | No state filing. Medical only claim | Reported to your insurer on its form, not to the department | Department of Industrial Accidents guidance |
| Insurer pays or denies | Within 14 calendar days of receiving the report | Insurer, on Form 103 or Form 104 | Department of Industrial Accidents guidance |
| Waiting period | No wage benefits for the first 5 calendar days. Paid from the 6th day, or from day one if incapacity reaches 21 days | Insurer | M.G.L. c. 152, § 29 |
| Employee files a claim | Within 4 years of first becoming aware of the link between the disability and the work | Employee | M.G.L. c. 152, § 41 |
Section 6 also carries its own penalty, and it is the kind that accumulates quietly. Anyone who violates the reporting section three or more times in a year is punished by a fine of $100 for each violation, and each failure to pay a fine within thirty days of the department's bill counts as a separate violation.
Note what the employee-side rule really means for you. Because want of notice is excused whenever the employer had knowledge, the argument in a disputed claim turns into a question about what your supervisors knew and when they knew it. Contemporaneous notes are worth more here than a policy that tells people to report within 24 hours. Keep both, and check the reporting guidance before you count days.
What Going Without Coverage Costs in Massachusetts
The state closes the business first and argues later. When the Office of Investigations finds an employer without coverage, it issues a stop work order, and minimum fines run at $100 per day, including weekends and holidays, from the date the order was issued. The fines accrue until coverage starts and the fine is paid.
| Exposure | What Massachusetts imposes |
|---|---|
| Stop work order | Issued by the Office of Investigations on a finding of no coverage. Without an appeal the business must close immediately and stay closed until proof of coverage reaches the department and the fines are paid |
| Daily fine | Minimum $100 per day including weekends and holidays from the date of the order. If you appeal, the business may stay open and the fine rises to $250 per day |
| Criminal | Employers issued a stop work order may face criminal charges carrying up to one year in prison, a fine of up to $1,500, or both |
| Public contracts | Debarment from public contracts for three years |
| Paying the claim | The Workers’ Compensation Trust Fund pays approved claims of employees of uninsured employers and may recover the full amount from the employer, plus necessary and reasonable attorney fees, for up to twenty years |
| Civil suit | In an action by the employee or by the trust fund, it is no defense that the injury did not result from the employer’s negligence or fault, if it arose out of and in the course of employment |
| Permits and licenses | A workers compensation affidavit must accompany applications for municipal permits and licenses connected to a business. No affidavit, no permit |
| Late injury reports | Three or more violations of the reporting section in a year bring a $100 fine for each violation |
The trust fund line is the one that ends companies. An uninsured employer does not simply lose an argument about a claim: the fund pays the injured worker, then comes after the business for everything it paid plus attorney fees, and it has twenty years in which to do it. Meanwhile the ordinary protection an insured employer enjoys is gone, because negligence is no longer the question in the employee's lawsuit.
The permit affidavit is worth a look even if you have coverage. Massachusetts requires the workers compensation insurance affidavit with applications for city and town permits and licenses tied to a business or commercial venture, filed with the municipality rather than the department, and refreshed every year. Contractors, plumbers and electricians meet it constantly, and a building permit gets denied without it.
Retaliation carries separate exposure. Section 75B bars discharging, refusing to hire or otherwise discriminating against an employee for exercising a right under the chapter or cooperating with a proceeding, and it treats an injured worker who can perform the essential functions of a job, with reasonable accommodation if needed, as a qualified handicapped person under c. 151B. Section 75A gives a worker who lost a job through a compensable injury preference in hiring for a suitable open job.
What to Do When Someone Gets Hurt, in Order
Care first, paperwork the same day, and count the days from the start. Massachusetts gives the employer one narrow medical right and gives the employee everything after it, so knowing your provider arrangement in advance is the difference between a calm morning and a bad one.
Prevention is cheaper than any of this, and in Massachusetts the safety rules for a private employer come from federal OSHA. The state plan approved in 2022 covers state and local government workers only, so a private business follows federal standards, which we cover in OSHA requirements for employers.
The administrative half of a claim is a records problem: who was hired when, what they were given at onboarding, which acknowledgment they signed, and where it went. That is the part FirstHR holds. We are not an insurer and we do not sell coverage, so the policy still comes from your carrier, but the § 22 notice and its signed acknowledgment stop living in someone's inbox.
If you operate in more than one state, none of these numbers travel. Thresholds, exclusions and deadlines are set jurisdiction by jurisdiction, and our state-by-state requirements guide is where to compare them. Wage rules differ the same way, which is why Massachusetts has its own minimum wage page.
Frequently Asked Questions
Does Massachusetts require workers compensation if I only have one employee?
Yes. The Department of Industrial Accidents states that all employers operating in Massachusetts must carry workers’ compensation insurance for their employees, and for themselves if they are an employee of their own company. The requirement applies no matter the number of hours worked and no matter the number of employees, so a single part-time hire triggers it. The only exception the department names is domestic service, where the worker has to reach 16 hours a week before coverage is required. Family members count too: the department says relatives on the payroll must be covered even if they are the only employees of the business. The statutory basis is M.G.L. c. 152, § 25A, which gives an employer two lawful ways to satisfy the duty, insurance with an insurer or membership in a self-insurance group, or a self-insurer license from the department.
Can a Massachusetts corporate officer opt out of workers compensation coverage?
Yes, if the officer owns at least 25 percent of the corporation. Massachusetts lets those officers file Form 153, the affidavit of exemption for certain corporate officers or directors, with the Department of Industrial Accidents. Every eligible officer who wants out has to sign it, and the department asks that a copy go to the insurance carrier each year before the policy renews, as confirmation that the statements still hold. The exemption is personal and narrow. It removes the officer from the policy and from the benefits, and it does nothing for anyone else: employees who are not corporate officers still have to be covered. Sole proprietors of unincorporated businesses, members of an LLC and partners of an LLP are not required to cover themselves in the first place, though they can buy coverage for themselves if a customer or a general contractor demands proof.
Are domestic workers and family members covered in Massachusetts?
Family members yes, domestic workers above 16 hours a week yes. The Department of Industrial Accidents is blunt about relatives: family members must be covered by workers’ compensation even if they are the only employees of the business, which surprises the many small companies that put a spouse or an adult child on the payroll first. Domestic service is the single hours-based carve-out in the state. Chapter 152 remains elective as to employers of seasonal, casual or part-time domestic servants, and a part-time domestic servant is defined as one who works fewer than 16 hours per week. Cross that line and the household employer is an employer like any other. Nothing else in Massachusetts turns on hours: part-time, seasonal and temporary staff in an ordinary business are covered from the first day.
What is the penalty for not having workers compensation in Massachusetts?
A stop work order and a daily fine, with criminal exposure behind it. The department’s Office of Investigations issues the stop work order to an employer found without coverage, and minimum fines run at $100 per day, including weekends and holidays, from the date the order was issued. Fines keep accruing until coverage starts and the fine is paid. If you do not appeal, the business must close immediately and stay closed until proof of coverage reaches the department and the fines are paid. If you do appeal, the business can stay open, but the fines rise to $250 per day. On top of that, an employer issued a stop work order may face criminal charges carrying up to one year in prison, a fine of up to $1,500, or both, and uninsured employers are barred from public contracts for three years.
How long does an employee have to report a work injury in Massachusetts?
There is no fixed day count, which is unusual. Under M.G.L. c. 152, § 41 no proceedings for compensation are maintained unless notice was given to the insurer or the insured as soon as practicable after the injury happened, and unless the claim itself is filed within four years from the date the employee first became aware of the causal connection between the disability and the work. Section 44 then softens the notice rule considerably: want of notice does not bar the proceedings if the insurer, the insured or an agent had knowledge of the injury, or if the insurer was not prejudiced by the missing notice. For an employer that means a late report is rarely a defense, and your own records are what decide the fight. Write down what a supervisor saw and when, because that knowledge is treated as notice.
When does a Massachusetts employer have to file the first report of injury?
Within seven calendar days, not counting Sundays and legal holidays, of the fifth day the employee is out. The trigger is disability, not the accident: an employee must be unable to earn full wages for five or more full or partial calendar days before the injury is reportable to the Department of Industrial Accidents, and those days do not have to be consecutive. The filing is Form 101, the employer’s first report of injury or fatality, and it can only be submitted electronically through a department online account because paper forms are no longer accepted. Section 6 of the statute requires the notice to go to the division, to the employee and to the insurer. If the employee misses fewer than five days, you do not file with the department at all: that is a medical only claim, reported to your insurer on its own form.
Can a Massachusetts employer buy coverage from a state fund?
No, because Massachusetts does not run one. It is a competitive state, so a policy comes from a private insurance company, bought directly or through an agent or broker. If the voluntary market turns you down, the residual market is the assigned risk pool: once two insurance companies have issued a rejection notice, your agent applies to the Workers’ Compensation Rating and Inspection Bureau, which handles the day-to-day operations of the pool and assigns you to a servicing carrier. The Division of Insurance oversees the pool and approves rates and classifications. Two details save money there. Employers in the pool paying more than $5,000 a year in premium should ask their agent to keep hunting for voluntary coverage, and pool employers can earn premium credits of up to 15 percent by hiring a qualified loss management firm.