If the only people working in your Maine business are family members, you probably still need workers compensation insurance for them, unless they fit a narrow waiver. Maine has no blanket exemption for hiring your relatives, so a family member you employ counts like any other worker, and coverage is required from the first one under 39-A M.R.S. section 401. The narrow exception is that a spouse, parent, or child of an owner can waive their own coverage with an approved state form, and family members who are owners are treated by business type.
Who this is for: Maine owners of family businesses, from a husband-and-wife shop to a company that employs relatives alongside other staff.
The short version
- Maine has no blanket family exemption, so relatives you employ as workers generally count.
- Coverage is required from the first employee, whether or not that first worker is related to you.
- A spouse, parent, or child of an owner can waive their own coverage with an approved Form WCB-2C.
- Family members who are owners are treated by business type, so an owner may be left off as a partner or member.
- Skipping coverage for family staff carries the same penalty and lawsuit risk as any other worker.
Family as employees, family as owners, and the waiver
Three situations cover most family businesses. First, a relative who is simply a paid worker is an employee like anyone else, and Maine offers no general exemption for hiring relatives, so they count toward the first-employee rule. Second, a relative who is an owner is treated by the structure of the business: a relative who is a sole proprietor, partner, or LLC member is left out of the definition of employee, while a relative who is a for-profit corporate officer with at least 20 percent of the stock can waive out. Third, Maine offers a specific family waiver: a spouse, parent, or child of a sole proprietor, partner, or bona fide 20 percent owner, or of an LLC member who works for the LLC, may waive their own benefits by filing Form WCB-2C, which the Board must approve. Without that waiver, they are covered.
How family members are treated
| Family member's role | Covered by the mandate? | Notes |
|---|---|---|
| Relative who is a paid employee, no waiver | Yes | No blanket family exemption in Maine |
| Spouse, parent, or child of an owner | Can waive out | Files an approved Form WCB-2C to waive their own benefits |
| Relative who is a partner or LLC member | Left off by default | Treated as an owner, not an employee |
| Relative who is a 20 percent corporate officer | Covered by default | Can waive out with an approved form |
Why you should not skip it for relatives
Owners of family businesses sometimes assume a relative would never file a claim, but an injury to a family member is still a real medical bill and lost income, and comp is what pays it. If a family employee who has not waived is hurt and you carried no coverage, the state can charge a penalty of up to 10,000 dollars, or 108 percent of the premium you should have paid, whichever is larger, and the relative, or their health plan, can come after the business for the costs. Covering family staff also keeps the business protected by the exclusive-remedy rule and keeps you compliant if a client or landlord asks for proof of coverage.
A Brunswick example
Illustrative, not a quote. A Brunswick family restaurant is run by two siblings who own it together as an LLC and employ their teenage children and a part-time server. As LLC members the siblings are left off the policy by default, and their children could waive with an approved form, but the part-time server is a plain employee, so Maine requires coverage for the server no matter what. The owners buy a policy and keep the children on it rather than filing waivers. When the server slips in the kitchen and hurts a knee, comp pays the medical bills and part of the lost wages, and the restaurant keeps its protection from being sued over the injury (the exclusive remedy). We make sure the restaurant payroll is rated correctly so the price fits a small crew. See our workers comp for restaurants page.
Real questions Maine owners ask
Do I need workers comp for family members I employ in Maine?
Usually yes. Maine has no blanket family exemption, so a relative you employ as a worker counts like any other employee, and coverage is required from the first one unless a narrow waiver applies.
Is there a family exemption in Maine workers comp?
Only a narrow waiver. A spouse, parent, or child of an owner can waive their own benefits with an approved state form. There is no automatic exemption just because a worker is your relative.
How does the family waiver actually work?
A spouse, parent, or child of a sole proprietor, partner, or bona fide 20 percent owner files Form WCB-2C to waive their own coverage. The waiver is not valid until the Workers' Compensation Board approves it.
What if my family members are also owners?
Then their role decides it. A relative who is a partner or LLC member is left off by default, while a for-profit officer with at least 20 percent of the stock can waive out.
Does my spouse need to be covered if they work in the business?
If your spouse is a paid employee, they count unless they file the family waiver as the spouse of an owner. Absent that approved waiver, a working spouse is covered like any worker.
Do my kids count if they help out for pay?
If they are paid employees, generally yes, unless they waive as the child of an owner with an approved form. A child on payroll without a waiver is covered like any other worker.
What happens if a family employee is hurt and I have no policy?
You can face a penalty of up to 10,000 dollars or 108 percent of the premium owed, and the relative or their health plan can pursue the business. An injury to family is still a real claim.
Why Maine owners choose Morrow
- We shop the right market for you. In Maine you buy workers' comp on the open market from any carrier licensed in the state, with the state-created MEMIC competing alongside private insurers and also standing as the guaranteed insurer of last resort, so we can shop your price freely and still have a fallback if you are hard to place.
- 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 Maine guides
Every Maine 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 Maine (start here)
- Workers comp: the owner's overview
- 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?
- 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)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Maine restaurant workers comp
This guide is general information, not legal advice. Maine rules and penalty amounts can change, so verify current requirements with Maine Workers' Compensation Board (WCB) or a licensed advisor before you rely on them. Last updated: July 2026.