If you have even one employee in Minnesota, yes, you need workers compensation insurance. Minnesota Statutes Chapter 176 requires nearly every employer to carry it once they have one or more employees, with no minimum headcount, no payroll minimum, and no exception for part-time, seasonal, or minor workers. The real questions are how owners are treated and how to buy it, not whether the rule reaches an ordinary employer.
Who this is for: Any Minnesota employer, from a brand-new business making its first hire to an established company double-checking the rules for its mix of staff.
The short version
- Coverage is required once you have an employee; there is no headcount trigger and no payroll minimum.
- Full-time, part-time, seasonal, minor, and non-citizen workers all count as employees.
- Owners run opposite to many states: qualifying sole proprietors, partners, and small-business officers and LLC managers are left off unless they elect in.
- A few narrow carve-outs exist, such as casual work outside your trade, low-paid household help, and family farms under a wage ceiling.
- Minnesota has no state fund, so you buy from a private insurer, with an assigned-risk plan as the backstop.
Who counts as an employee
Minnesota defines an employee broadly. Almost anyone who works under a contract of hire for pay is an employee, and coverage attaches once you have one. Hours, age, immigration status, and season do not change that. There are only a few narrow carve-outs, and they are smaller than owners usually expect.
| Worker type | Counts toward the mandate? | Notes |
|---|---|---|
| Full-time W-2 employee | Yes | Coverage required from day one |
| Part-time or seasonal worker | Yes | No hours or headcount exception |
| Minor or non-citizen worker | Yes | Both are employees under Chapter 176 |
| Household worker in a private home | Sometimes | Exempt only if paid under 1,000 dollars in cash in any three-month period |
| Family farm laborer | Sometimes | Exempt while the farm stays under the wage ceiling in the family-farm rule |
| A genuine independent contractor | No | Only if they pass Minnesota's control test, or the 14-factor test in construction |
The narrow exceptions
Minnesota's exemptions are short. Casual work is exempt only if it is both casual and outside your regular trade or business, so a helper doing your normal work does not qualify. A household worker in a private home is exempt only while they earn under 1,000 dollars in cash in any three-month period. A person paid 1,000 dollars or less in a year by a nonprofit association is also exempt. Beyond those, the family-farm rule, and the owner elections below, the first-employee rule reaches almost everyone, including construction crews.
How Minnesota treats business owners
Owners are the one place the answer changes with your structure, and Minnesota points most of them off coverage. A sole proprietor, and their spouse, parent, and child, are left off by default and can elect in. Business partners are the same. A closely held corporation's officer, or an LLC manager, is also left off, but only if they meet the size and ownership tests covered in the entity guides; a larger company's officer is a covered employee with no opt-out. Whatever the owners qualify for, every non-owner employee must be covered from day one.
Why the rule has teeth
Minnesota backs the mandate hard. An employer that fails to insure can be ordered to pay up to 1,000 dollars per employee for each week it was uninsured. If an uninsured worker is hurt, the state's Special Compensation Fund pays the benefits and then bills the employer for everything it paid plus a 65 percent penalty. A willful failure to insure is a gross misdemeanor, licensing agencies must hold up your permits until you show coverage, and an injured worker at an uninsured business can sue for damages instead of being limited to a comp claim.
A St. Paul example
Illustrative, not a quote. A St. Paul cafe owner hires two counter staff and one part-time weekend baker and assumes part-timers might not count until she has more of them. In Minnesota they count from the first one, so she needs a policy right away. She puts coverage in place before anyone starts, and when the weekend baker burns a hand on a hot tray, comp pays the medical bills and part of the lost wages. Because she was insured, the injury is handled as a comp claim rather than a lawsuit, and we make sure her cafe payroll is rated on the right kind of work.
Real questions Minnesota owners ask
Is workers comp legally required for my Minnesota business?
If you have any employees, yes. Minnesota requires coverage once you have one or more employees under Chapter 176. There is no minimum headcount, no payroll minimum, and no part-time or seasonal exception.
How many employees before I need workers comp in Minnesota?
One employee is enough. Minnesota attaches the requirement to your first employee, so there is no number you can stay under. A single part-time or seasonal hire makes coverage mandatory.
Do part-time or seasonal workers count in Minnesota?
Yes. Part-time, seasonal, and temporary workers are all employees for coverage. Minnesota does not exempt them, so you cannot avoid the requirement by keeping people part-time.
Do minors or non-citizen workers count?
Yes. Minnesota counts minors and non-citizen workers as employees under Chapter 176, so they trigger the coverage requirement the same as any other worker.
Do I have to cover myself as the owner?
Usually not by default. Minnesota leaves qualifying sole proprietors, partners, and small-business officers and LLC managers off coverage unless they elect in. Your employees are always covered.
What if my workers are independent contractors?
A label does not settle it. Minnesota uses a right-of-control test, and a stricter 14-factor test in construction, not the ABC test. A misclassified worker who gets hurt can leave you exposed.
What happens if I do not carry it?
Minnesota can fine you up to 1,000 dollars per employee for each week uninsured, pay an injured worker through the state's Special Compensation Fund and bill you plus a 65 percent penalty, and charge a willful failure as a gross misdemeanor.
Why Minnesota owners choose Morrow
- We shop the right market for you. In Minnesota you buy workers' comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no carrier will take you the assigned-risk plan (MWCARP) is the guaranteed backstop, so we can shop your rate freely and still have a 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 Minnesota guides
Every Minnesota 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 Minnesota (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
- What workers comp does not cover
- Minnesota restaurant workers comp
This guide is general information, not legal advice. Minnesota rules and penalty amounts can change, so verify current requirements with the Minnesota Department of Labor and Industry or a licensed advisor before you rely on them. Last updated: July 2026.