If you have even one covered employee in Maryland, yes, you need workers compensation insurance. Maryland's Workers' Compensation Act requires nearly every employer to secure coverage from the first employee, with no general head-count minimum, and the count is broad: part-time, seasonal, family members, and minors all count, along with working LLC members and corporate officers. The real questions are who counts, which narrow exceptions apply, and how owners are treated, not whether the rule reaches an ordinary employer.
Who this is for: Any Maryland employer, from a business making its very first hire to an established company double-checking the rules for its mix of staff.
The short version
- Coverage is required as soon as you have one covered employee. There is no general minimum head count.
- The count is broad: part-time, seasonal, family, and minor workers all count, even a minor employed unlawfully.
- Owners split two ways: sole proprietors and partners are out by default and opt in; working LLC members and corporate officers are in by default and must qualify to opt out.
- A few workers are carved out: casual employees are never covered, and some domestic and farm workers fall under separate tests.
- You buy from a private carrier or the state fund, Chesapeake Employers, which is also the guaranteed backstop.
Who counts as an employee in Maryland
Maryland presumes anyone you hire and pay to work is a covered employee. That sweeps in most of the people you might assume are exceptions, which is why the first-employee rule catches so many small businesses.
| Worker type | Counts toward coverage? | Notes |
|---|---|---|
| Full-time W-2 employee | Yes | Triggers coverage from the first one |
| Part-time or seasonal worker | Yes | No hours exception; they still count |
| Family member who works for pay | Yes | Counts the same as any other employee |
| Minor, even if hired unlawfully | Yes | Maryland covers a minor you hire and pay |
| Casual employee | No | A one-off, incidental worker is not covered |
| Domestic worker in a private home | Only over a pay line | Covered once they earn at least 1,000 dollars cash in a calendar quarter from that home |
| Farm or agricultural worker | Only over a size line | Covered if the farmer has at least 3 full-time workers or a full-time payroll of at least 15,000 dollars |
How Maryland treats business owners
Owners are the one place the answer changes with your structure, and Maryland uses two opposite defaults. A sole proprietor is not an employee of the business and does not have to cover themselves; a partner is treated the same way, out by default. Each can elect to be included, and a partner can be added only if they work in the business full time, by written notice naming them to both the Commission and the insurer. Working LLC members and corporate officers are the reverse: if they provide a service for pay, they are covered employees by default. An LLC member can opt out only if they own at least 20 percent of the LLC, and a corporate officer can opt out only through one of a few narrow paths, such as being an officer of a close corporation. Keep these opposite defaults straight, because assuming a working officer is not covered is a common way to end up wrongly uninsured.
Why the rule has teeth
Maryland backs the mandate hard. An employer that should carry coverage but does not can be ordered by the Workers' Compensation Commission to secure it and pay a penalty of up to 25,000 dollars to the Uninsured Employers' Fund, with a further penalty of up to 25,000 dollars if it still does not comply within 30 days. Going without required coverage is also a misdemeanor that can bring a fine of up to 5,000 dollars or up to a year in jail. On top of that, an uninsured employer loses the usual protection that makes comp a worker's only remedy, so an injured worker can either file a comp claim or sue, and in that lawsuit the employer cannot argue the worker assumed the risk or was careless.
A Silver Spring example
Illustrative, not a quote. A Silver Spring landscaping business runs with the owner, a sole proprietor, and two seasonal crew members. The owner assumes a couple of seasonal workers are too few to matter. In Maryland they count from the first one, so the business needs a policy, even though the owner is not required to cover themselves. The owner buys coverage before the spring rush, and when a crew member is injured by a mower, comp pays the medical bills and part of the lost wages. Because the business was insured, the injury is handled as a comp claim rather than a lawsuit, and we make sure the landscaping payroll is rated on the right kind of work. See our workers comp for landscapers page.
Real questions Maryland owners ask
Is workers comp legally required for my Maryland business?
In almost every case, yes, from your first employee. Maryland's Workers' Compensation Act requires coverage with no general head-count minimum, and it counts part-time, seasonal, family, and minor workers, plus working LLC members and officers.
How many employees before I need workers comp in Maryland?
One. Maryland does not use a numeric minimum like some states, so a single covered employee triggers the requirement. The catch is how few exceptions there are, so most ordinary staff push you over the line right away.
Do part-time or seasonal workers count in Maryland?
Yes. Part-time, seasonal, and temporary employees all count, and there is no hours exception. You cannot stay under the rule by keeping people part-time, though a true one-off casual worker is a separate, narrow exception.
Are family members who work for me covered?
Generally yes. A family member who works for pay is an employee like any other in Maryland and counts toward coverage. There is no blanket family exemption, so employing a relative usually means you need a policy.
Do I have to cover myself as the owner?
It depends. A sole proprietor or partner is out by default and may opt in, with a partner needing to be full time. A working LLC member or corporate officer is covered by default and can opt out only if they qualify.
What if my workers are independent contractors?
A label does not settle it. For coverage, Maryland uses a common-law right-of-control test, not a simple ABC test, and looks behind any agreement. A worker you direct like an employee is an employee, and misclassifying one who gets hurt can leave you exposed.
What happens if I do not carry it?
Maryland can order you to get covered and pay up to 25,000 dollars, with more for continued non-compliance, and going without is a misdemeanor. An injured worker can also sue you instead of filing a claim, without your normal defenses.
Why Maryland owners choose Morrow
- We shop the right market for you. In Maryland you buy workers' comp on the open market from any private insurer licensed in the state, and Maryland also runs a competitive state fund, Chesapeake Employers' Insurance Company, that both competes for ordinary business and must cover eligible employers no one else will take, so we can shop your rate widely and still have a guaranteed fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Maryland guides
Every Maryland business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Maryland (start here)
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- Workers comp vs employers liability
- Maryland landscaper workers comp
This guide is general information, not legal advice. Maryland rules and penalty amounts can change, so verify current requirements with the Maryland Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.