West Virginia Workers Compensation Rules for Employers
West Virginia requires workers compensation from your first employee. Who is exempt, where the policy comes from, the deadlines, and the penalties.
West Virginia Workers Compensation
Coverage from the first employee, the short list of real exemptions, where the policy comes from, and what a lapse costs
The call I get from West Virginia owners usually opens the same way. They ran a business in a neighboring state that sets a three-worker threshold, they moved operations across the line, they hired one person, and they assumed the small end of the payroll was safe for a while. It never was.
West Virginia is a first-employee state. There is no headcount to reach and no waiting period to use up. The exemptions that exist are narrow, and none of them is a size test for an ordinary small business. Below you will find who must carry coverage, the real exemptions, where the policy comes from, the injury deadlines and what a lapse costs.
There is a second confusion worth clearing early. West Virginia ran a state fund for more than 90 years and privatized it in legislation that took effect in 2006, so plenty of guidance still floating around describes a system that no longer exists.
This page covers one jurisdiction and one topic. How the underlying trade works at all, with injured workers getting guaranteed benefits in exchange for giving up the right to sue, sits in our guide to workers compensation insurance. Everything else about employing people in the state is in the West Virginia HR compliance guide.
Which West Virginia Employers Must Carry Coverage
All of them, from the first employee. The Insurance Commissioner’s coverage rule opens with one sentence that settles the question: every employer is required to obtain West Virginia workers’ compensation coverage for the protection of its employees. The agency repeats it on its Employer Coverage page, which says all West Virginia employers are statutorily required to maintain coverage.
The word employer is drawn wide on purpose. The state rule at W. Va. Code St. R. 85-8-3.5 reaches an individual, sole proprietor, firm, partnership, limited partnership, limited liability company, joint venture, association, corporation, receiver, estate, trust, guardian, executor, government entity or any other entity regularly employing another person to carry on a form of industry, service or business in the state.
Nonprofits get no pass. The same rule says industry, service or business includes any not-for-profit entity or volunteer organization to the extent that it employs individuals. A charity with two paid staff is an employer for this purpose in exactly the way a contractor with two crew members is.
Who Counts as an Employee in West Virginia
Everyone on the payroll, plus anyone you have misfiled as a contractor. Because the state requires coverage from the first employee, West Virginia never asks you to count heads. It asks a harder question instead: which of the people working for you are legally employees.
The test for that is statutory rather than improvised. The Insurance Commissioner defines an independent contractor by reference to the West Virginia Employment Law Worker Classification Act at W. Va. Code 21-5I-1 and following, with the specific test at 21-5I-4. A policy is not required to cover people who meet it, and self-insured employers are not required to cover them either.
| The classification question | How West Virginia answers it | Why it matters to a small employer |
|---|---|---|
| Can a worker be both employee and contractor? | No. 85-8-6.2.3 forbids classifying the same person both ways for the same employer at the same time | The part-time bookkeeper who also drives on Saturdays is one status, not two |
| Must you treat a qualifying worker as a contractor? | No. 85-8-6.2.4 lets you hire that person as an employee instead, and says to set the terms at the outset | When the classification is genuinely close, hiring as an employee removes the risk entirely |
| Do contractors get a safety net if you were wrong? | No. 85-8-6.2.5 makes independent contractors ineligible for payments from the Uninsured Employers’ Fund | A misclassified worker who is later held to be an employee lands on you, not on the fund |
| Do part-time and seasonal workers count? | There is no hours test in the coverage rule. An employer regularly employing another person is an employer | A single Saturday helper puts you inside the mandate |
| Do out-of-state workers on a short job count? | Not for 30 calendar days or less in any 365-day period, under 85-8-7.1 | Past 30 days the crew needs West Virginia coverage and the carrier needs to know |
| Can your subcontractor’s problems become yours? | Yes. W. Va. Code 23-2-1d and 85CSR10 make a primary contractor liable for a subcontractor’s workers compensation obligations in defined circumstances | Verify every subcontractor’s coverage before the work starts, not at the audit |
Two duties run alongside the classification question and both bite at audit time. W. Va. Code St. R. 85-8-4.2 gives every employer a continuous and ongoing duty to keep its carrier current on business activities, including anything that could affect payroll or premium. Rule 85-8-6.6.1 adds a duty to report the entire payroll of all employees.
If your subcontractor mix or your job classifications have drifted since the policy was written, the reckoning arrives with the audit rather than with a notice from the state.
Who Is Left Out of the West Virginia Requirement
Seven categories, all of them narrow. W. Va. Code St. R. 85-8-4.3 lists the exemptions from otherwise mandatory coverage, and Insurance Commissioner Informational Letter No. 201 reprints them for the people who ask about exemption letters. The table covers all seven, then the owner elections and contractor cases that often get mistaken for exemptions.
| Who | Does West Virginia require coverage? | The condition attached |
|---|---|---|
| Domestic service workers | No | Household work in or about a private home, performed for the household. Rule 85-8-3.3 lists cooks, housekeepers, babysitters, caregivers, handymen, gardeners and family chauffeurs |
| Employees of a maid service or temp agency working in that same home | Yes | 85-8-3.3.2 says work done for someone other than a member of the household is not domestic service. The exemption follows the household, not the task |
| Agricultural workers | Only above five | An employer with five or fewer full-time employees in agricultural services is exempt for those employees |
| Casual employment | No | A casual employer is one that employs not more than three people for a temporary, intermittent and sporadic period not exceeding ten calendar days in a calendar quarter |
| Churches | No | Named outright as an exempt employer in 85-8-4.3.4 |
| Organized professional sports | Participants only | Trainers and jockeys in thoroughbred racing may be exempted. The driver who hauls the horses and equipment must be covered |
| Volunteer rescue squads and police auxiliary units | No, for the volunteers | Must be organized under a county commission, municipality, other government body or an emergency medical services board. Paid employees must be covered |
| Employees covered by the federal Longshore and Harbor Workers’ Compensation Act | No, for those employees | Everyone on the payroll who is not covered federally still needs a West Virginia policy |
| Sole proprietors and partners | Employees unless elected out | W. Va. Code 23-2-1 lets the business elect its owner or partners out by written notice to the carrier. A sole proprietor with no employees needs no policy at all |
| Corporate officers and directors | Employees unless elected out | The election is capped at four principal officers (president, vice president, secretary, treasurer) plus board members. Other officers working in a dual capacity cannot be elected out |
| LLC managers, officers and members | Employees unless elected out | Capped at four people, each acting as a manager, officer or member of the company |
| Limited partners and pure investors | No | Not employees under 85-8-6.7 and 85-8-6.8 unless they work in the service of the business |
| Independent contractors | No, if the classification holds | Classified under the Employment Law Worker Classification Act test at W. Va. Code 21-5I-4. Contractor status alone does not qualify a business for an exemption letter |
Electing someone out takes that person off the policy, and the paperwork has a strict shape. Under 85-8-6.4 the employer gives the private carrier written notice naming the positions that are not to be covered, along with the names and Social Security numbers of the people holding them. The employer also stops including their wages in payroll reports.
The election takes effect for the next policy period and carries forward with the same carrier. It is personal rather than positional, though. An election is valid only for the individuals named, so the successor in the same office is covered again until you amend the notice.
Bringing someone back under the policy needs 60 days of written notice before the coverage period in which coverage is sought, or it slips to the period after that.
If you believe you fit one of the seven exempt categories, you can ask the Insurance Commissioner for a letter of exemption on the agency’s form. The processing fee is $25. Informational Letter No. 201 is blunt that being an independent contractor is not a basis for one of these letters, which is the request the agency evidently receives most often.
Where a West Virginia Employer Buys the Policy
From a private carrier, through an agent. West Virginia ran a monopolistic state fund for most of its history and stopped selling coverage under privatization legislation that took effect in 2006. The Offices of the Insurance Commissioner (OIC) now count over 350 carriers writing workers compensation in the state and report that aggregate loss costs have fallen more than 82 percent since the change.
That history is why so much stale advice circulates. The state is out of the insurance business, so there is no state fund to buy from, and no gap in employer’s liability coverage to plug, the kind a monopolistic state fund leaves behind.
The Old Fund is the one survivor of the old system. It exists to wind down liabilities from before privatization, and it shows up in the rules mainly as a way to be in default.
| Route | How you get there | Who regulates it |
|---|---|---|
| Commercial policy | Buy from an agent or from an insurer authorized by the Insurance Commissioner to write workers compensation in West Virginia | Offices of the Insurance Commissioner |
| Assigned Risk Plan | Apply through the National Council on Compensation Insurance after declinations from at least two voluntary market carriers within the prior 60 days | Insurance Commissioner, with NCCI as plan administrator |
| Individual self-insurance | Apply under W. Va. Code 23-2-9 and 85CSR18 for approval by the Insurance Commissioner and the Industrial Council | Insurance Commissioner, Self-Insurance Unit |
| Self-insured risk pools | Approved self-insured employers secure their liability through the security and guaranty risk pools maintained under 85CSR19 | Insurance Commissioner |
| Professional employer organization | Enter an arrangement with a PEO operating under 85CSR31 | Insurance Commissioner |
| State fund | Does not exist. West Virginia privatized in 2006 | Not applicable |
The Assigned Risk Plan is the market of last resort, the place you go when no carrier will quote you, and the Insurance Commissioner describes it plainly in its residual market explainer. Rates there are often higher than in the voluntary market, which is why applicants must show two declinations first. A notice of nonrenewal on existing coverage counts as one of the two.
NCCI takes the application online at no charge and assigns the policy to a servicing carrier. The assignment is random rather than requested, so you do not pick the carrier.
Price is set by the class code for the work (the rating category your type of work falls into), your payroll and an experience modifier built from your own claim history. On top of premium sits a state surcharge that a lot of first-time buyers do not expect.
FirstHR is not an insurer or a broker and does not sell coverage, so read this section as a map of the West Virginia market rather than a recommendation. What we hold is the employee record that the policy, the audit and the claim all depend on.
What Qualifying to Self-Insure Takes in West Virginia
More financial depth and more patience than a small business has. Self-insurance runs through the Insurance Commissioner under W. Va. Code 23-2-9 and W. Va. Code St. R. 85CSR18, and the entry requirements make the scale obvious before you reach the security deposit. The application asks for audited financial statements covering each of the three fiscal years preceding the filing.
Under 85-18-5 the people who sign and swear to the filing depend on the business form. For a corporation it is the president alone, or the vice president together with the secretary or an assistant secretary. For a partnership it is all partners, and for a sole proprietorship, the owner.
If you lean on a parent company’s financials, the parent documents the relationship, provides a parental guaranty, signs as well and satisfies the same financial responsibility tests.
Then comes the money. The minimum application processing fee is $2,500 and nonrefundable, and the Commissioner may raise it if processing costs more.
Approved employers also post security or bond in the form and amount the Commissioner sets. The options are an occurrence-type surety bond, marketable government debt instruments maturing within ten years, or a letter of credit from a United States bank carrying an evergreen clause, meaning it renews automatically. Catastrophic exposure can trigger extra security, excess insurance or both.
Timing is unforgiving in one specific way. Self-insured status takes effect on the first day of the calendar quarter following the month of approval, and until then you keep paying your private carrier. Employers who cancel early to save a quarter of premium create exactly the uninsured gap this page is about.
Once you are approved, the Self-Insurance Unit reviews every self-insured employer’s claims, finances, compliance and security once a year, and keeps regulating employers who have stopped self-insuring but still administer old claims.
The Poster, and What You Owe a New Hire
One posting is mandatory, and West Virginia does not print it for you. W. Va. Code 23-2C-15(b) is quoted verbatim by the Insurance Commissioner on its workers compensation forms page: every employer shall continuously post a notice upon its premises in a conspicuous place identifying its workers’ compensation insurer.
That notice must include the name, business address and telephone number of two parties: the insurer, and the person to contact with questions about a claim.
The agency then says something unusual. There is currently no legislative rule addressing the requirement, and these workplace notices are not subject to review or approval by the Insurance Commissioner. No prescribed size, no prescribed typeface, no state form to download. The obligation is real, and the agency leaves the layout to the insurer’s discretion.
The Commissioner does interpret the two required pieces. The insurer identification is self-explanatory. The contact person can be one of your own people (a manager, human resources director or benefits coordinator), an adjuster for the insurer, or the insurer’s third-party administrator. Whoever you name must be readily available to the injured worker and know enough about the claims process to help.
There is a second posting you never want to see. Under W. Va. Code St. R. 85-11-4, when the Commissioner discovers that an employer is not maintaining coverage, the agency writes a notice to that employer’s employees and has it posted in a conspicuous place at the chief works (the employer’s main place of business).
The agency also sends a copy to the Secretary of State for publication in the State Register. A printed warning on the notice protects it until the employer returns to good standing or until 60 days have passed since the posting, whichever comes first. Anyone who removes, defaces or renders it illegible before then is guilty of a misdemeanor and shall be fined $1,000.
Injury Reporting Deadlines in West Virginia
Two clocks, and the second one runs to your insurance carrier rather than to a state agency. The employee should give notice immediately. You have five days from that notice to report the injury to your private carrier.
| What has to happen | Deadline | Who does it | Authority |
|---|---|---|---|
| Employee seeks medical care for the injury | Immediately after the injury | Employee | W. Va. Code St. R. 85-1-3.1 |
| Employee gives the employer written notice of the injury | Immediately on occurrence or as soon as practicable. Notice within 2 working days is deemed immediate | Employee or someone acting for the employee | W. Va. Code St. R. 85-1-3.1 |
| Employee files a claim, or asks that one be filed | Immediately after the injury, on form OIC-WC-1 | Employee, with Section II completed by the initial healthcare provider | 85-1-3.1 and OIC approved forms |
| Outer limit for filing the claim application | 6 months from the injury or death, or the right to compensation is forever barred. Occupational disease: 3 years | Employee, or a dependent in a death claim | W. Va. Code 23-4-15 |
| Employer reports the injury to its private carrier | Within 5 days of receiving notice of the employee’s desire to file a claim | Employer | W. Va. Code St. R. 85-1-4 |
| Employer completes the Employers’ Report of Occupational Injury or Disease | With the report to the carrier, on form OIC-WC-2 | Employer | OIC approved forms |
| Waiting period before temporary total disability is payable | More than 3 consecutive calendar days of inability to work | Carrier | W. Va. Code St. R. 85-1-5.1 |
| The first 3 days become payable | Once the worker is unable to work more than 7 consecutive calendar days | Carrier | W. Va. Code St. R. 85-1-5.1 |
| Employer tells the state it no longer has employees requiring coverage | When the business closes, is sold, or the last covered employee leaves | Employer, on the OIC Termination of Coverage form | OIC Revenue Recovery |
Late notice from the worker does not end the claim by itself. W. Va. Code St. R. 85-1-3.1 says failure to give immediate notice weighs against a finding of compensability and dilutes the credibility of the claim, then adds that under no circumstances shall late notice be the sole basis for denial.
The same rule hands employers something useful. Enforcing a personnel policy that requires a claimant to report an injury immediately is expressly not a discriminatory practice under the state’s workers compensation law, Chapter 23. So write the policy, put it in the handbook, apply it evenly, and you are standing on the Commissioner’s own words rather than on hope.
What Going Without Coverage Costs in West Virginia
Twice your monthly base premium for every month or part of a month you were uninsured, capped at $10,000. The fine comes from 85-11-19, the employer default rule published with the rest of the Title 85 workers compensation rules, and W. Va. Code 23-2C-8(d)(3) sets the cap.
The fine applies whether or not you have coverage by the time the uninsured stretch is discovered. Restoring coverage and then lapsing again starts a fresh fine of up to another $10,000.
| Exposure | What West Virginia imposes |
|---|---|
| Uninsured fine | Twice the monthly base premium calculated at the start of the uninsured period, for each month or part of a month, capped at $10,000 per continuous period |
| Repeat lapse | A second uninsured period after coverage is restored carries its own fine of up to another $10,000 |
| Liability to the Uninsured Employers’ Fund | Repayment of everything the fund spends on your injured worker: all medical and indemnity benefits, claim administration costs, defense attorney fees and interest |
| Suit by your own employee | The Commissioner posts a notice telling your employees you are uninsured and may be sued by them for work-related injuries |
| No coverage for the owners | An employer that fails to maintain required coverage gets no coverage for its partners, members, proprietor or officers, and no Uninsured Employers’ Fund benefits for them |
| Default follows the injury, not the cure | If you are in default on the date of injury, the exclusion lasts for the life of that injury even after you pay up, and benefits paid meanwhile become overpayments |
| Default List and Employer Violator System | The company plus every owner, officer, member, partner and holder of a 10 percent or greater ownership interest goes into the Employer Violator System until the company comes off the Default List |
| State licenses, permits and contracts | Under 85CSR32 a state agency must refuse to grant, issue or renew, and must revoke, any contract, license, permit or certificate to conduct a trade, profession or business held by an employing unit on the Default List |
| Injunction against operating | The Commissioner may sue in the Circuit Court of Kanawha County to enjoin a default employer from carrying on business, or instead require a bond of at least 50 percent more than the amounts due |
| Dissolution blocked | The Secretary of State withholds any certificate of dissolution or withdrawal until the Commissioner certifies that the employer has cured or arranged to cure the default |
| False statements | Knowingly and willfully making false statements about information required under Chapter 23 is a felony under W. Va. Code 61-3-24e(5), punishable by up to three years confinement, a fine up to $10,000, or both |
The Employer Violator System is the piece small owners underestimate, because it attaches to people rather than to the company. W. Va. Code St. R. 85-11-20 puts every owner, officer, member, partner and holder of a substantive ownership interest into the system alongside the business, and keeps them there until the business leaves the Default List.
Landing on that list is not a surprise. Under 85-11-17 the Commissioner sends written notice first, states the circumstances causing the default, gives 15 days before the listing takes effect, and offers an expedited administrative hearing that has to be held within 10 business days of the request. The letter you leave unopened is the entire warning.
What to Do When Someone Gets Hurt, in Order
Care first, paperwork the same day, carrier inside five days. West Virginia keeps the ordinary claim between the worker, the treating provider and your carrier, which means the sequence below is mostly about not being the reason a good claim goes sideways.
Most of what goes wrong after this point is a records problem rather than a legal one: who was hired when, which state they actually work in, what they were told at onboarding, and where the signed acknowledgment went. That part is what FirstHR holds. The policy still comes from your carrier.
If you operate in more than one state, none of these numbers travel. Thresholds, exclusions and deadlines are set state by state, so check each state on its own terms before your first hire there.
Frequently Asked Questions
Does a West Virginia business with one employee need workers compensation?
Yes. One employee is enough, because West Virginia has no minimum headcount. Under the Insurance Commissioner’s coverage rule, every employer must get West Virginia workers’ compensation coverage to protect its employees, and the agency’s Employer Coverage page calls maintaining that coverage a statutory duty of all West Virginia employers. The rules at W. Va. Code St. R. 85-8-3.5 cast the employer net wide: an individual, sole proprietor, partnership, limited liability company, joint venture, association, corporation, trust, estate, government entity or any other entity that regularly employs someone to carry on an industry, service or business in West Virginia. Nonprofits and volunteer groups are caught too, for whatever staff they employ. The mix-up usually comes from next door. One neighboring state, Virginia, does use a numeric threshold, and West Virginia does not. Assuming the two states work the same way is the most expensive mistake on this page.
Are sole proprietors, partners and LLC members covered in West Virginia?
Yes by default, once the business employs anyone, unless the employer elects them out. W. Va. Code 23-2-1 allows a partnership, sole proprietorship, association or corporation to exclude its partners, its owner, or its corporate officers and directors from the definition of employee, and allows a limited liability company to exclude up to four of its managers, officers or members. Those people remain on the policy until the carrier has written notice that names them, and under the Insurance Commissioner’s rule a named person stops being deemed an employee only once that notice has been served. Passive owners are a separate case. A limited partner under the Uniform Limited Partnership Act counts as an employee only if he or she actually works in the service of the partnership, and a pure investor who takes no part in directing, administering or controlling the business is not an employee at all. A sole proprietor with no employees is not an employer at all and needs no policy. If you want owners off the policy, tell the carrier in writing instead of assuming the policy leaves them out.
Can a West Virginia employer leave corporate officers off the policy?
Yes, within limits. W. Va. Code St. R. 85-8-6.3 lets an employer exclude every member of its board of directors and certain corporate officers, and a person excluded that way has no right to benefits under Chapter 23. For officers the election is capped at the four principal ones: the president, vice president, secretary and treasurer. Other officers and assistant officers who work in a dual capacity, doing work an ordinary employee would also do, must stay on the policy, and the employer carries the burden of proving otherwise. For a limited liability company the ceiling is again four people, each of whom must be acting as a manager, officer or member. To make the election, send the private carrier a written notice listing both the positions and the people who hold them. It takes hold at the start of the next policy period.
Does West Virginia have a state workers compensation fund?
No. For most of its history West Virginia insured employers through a monopolistic state fund, and it privatized the system through legislation that took effect in 2006. Today the Offices of the Insurance Commissioner report more than 350 carriers offering workers’ compensation insurance to West Virginia employers, and say aggregate loss costs are down more than 82 percent since privatization. In practice that means buying from a licensed private carrier through an agent. If no carrier in the voluntary market will quote you, the fallback is the Assigned Risk Plan, the market of last resort, which the National Council on Compensation Insurance administers. To get in, two or more voluntary market carriers must have turned you down in the 60 days before you apply, and a nonrenewal notice counts toward those two.
How fast does a work injury have to be reported in West Virginia?
The employee should tell you immediately, and you have five days to tell your carrier. W. Va. Code St. R. 85-1-3.1 gives the injured worker three jobs: get medical care, notify the employer in writing immediately or as soon as practicable, and file a claim or ask for one to be filed. The rule treats notice given within two working days as immediate. Reporting late weighs against a finding that the injury is compensable, yet the rule is clear that lateness alone can never be the reason a claim is denied. Your side of it is 85-1-4: every injury to anyone you employ has to reach your private carrier within five days after you receive notice that the employee wants to file a claim. That report goes to the carrier; no state agency receives it. The claim application itself has a hard outer limit under W. Va. Code 23-4-15: six months from the injury or death, or the right to compensation is forever barred, with three years for occupational disease.
What is the penalty for not carrying workers compensation in West Virginia?
The fine is two times your monthly base premium for every month or partial month without coverage, up to $10,000 for one continuous uninsured stretch, under W. Va. Code St. R. 85-11-19 and W. Va. Code 23-2C-8(d)(3). A new lapse after you restore coverage brings a separate fine of up to another $10,000. And the fine is the smallest part. You repay the Uninsured Employers’ Fund in full for whatever it pays out for your injured worker, from medical and indemnity payments to claim administration costs, defense attorney fees and interest. Your company also lands on the Workers’ Compensation Default List, and every owner, officer, member, partner and holder of a 10 percent interest goes with it, through the Employer Violator System.
Is an independent contractor exempt from West Virginia workers compensation?
A properly classified independent contractor does not have to be covered, but that is a classification question rather than an exemption. Status is decided by the Employment Law Worker Classification Act, which starts at W. Va. Code 21-5I-1 and puts the test itself in 21-5I-4. The Insurance Commissioner adds three points employers miss. A person cannot be classified as an employee and an independent contractor of the same employer at the same time. Nothing forces an employer to treat a qualifying worker as a contractor, and hiring that person as an employee is always an option. And a contractor cannot collect from the Uninsured Employers’ Fund. Informational Letter No. 201 confirms that contractor status is not one of the categories that qualifies a business for a letter of exemption.