My Mississippi Corporation: Need Workers Comp?

A Mississippi corporation must carry workers compensation once it has five or more employees (Mississippi Code section 71-3-5). Because a corporation is its own legal person, its officers and shareholders who work in the business are generally treated as employees, so they usually count toward the five and are covered. Mississippi lets a corporate employee who owns 15 percent or more of the stock opt out of their own coverage in writing, but an owner below that share cannot.

Who this is for: Owners of Mississippi C-corps and S-corps, including one-person and family corporations, deciding whether the company needs a policy and whether the officers belong on it.

The short version

Five employees is the trigger. A corporation with five or more employees must carry workers comp in Mississippi.
Working officers are usually employees. Officers who draw a wage and do the work are generally counted toward the five, unlike a sole proprietor in some other states.
The 15 percent line controls who can opt out. A corporate employee who owns 15 percent or more of the stock can file a written election to leave their own coverage off; an owner below 15 percent cannot.
Opting out also changes the count. An owner exempted by that written election is removed from the head count toward the five.
Regular staff always count. W-2 employees count toward the five whether full-time or part-time.

How a corporation is counted

Person	Counts toward the five?	Can opt out of own coverage?
Working officer who owns 15 percent or more of stock	Yes, unless exempted	Yes, by written election
Working officer who owns less than 15 percent	Yes	No; treated as a covered employee
Regular full-time employee	Yes	No
Regular part-time employee	Yes	No
Shareholder who does no work	Usually no	Not applicable
1099 worker you control day to day	Usually yes	Treated as an employee if misclassified

The 15 percent rule most owners miss

Mississippi ties the owner opt-out to a specific ownership share. A corporate employee who owns 15 percent or more of the stock can be left off the policy by a written election that they sign, and that removes them from the count of workers. A working officer who owns less than 15 percent does not get that choice; the state treats them as a covered employee who counts toward the five and must be insured. So in a corporation with several small-stake officers, most or all of them may have to be covered. If your officers do physical work, keeping them covered is often worth the cost anyway, because a personal health plan may not fully pay for a work injury and never replaces lost income. Compare the numbers using our Mississippi cost guide.

Do not rely on the corporate shell to skip coverage

Some owners assume incorporating removes the workers comp duty. It does not. Once the corporation has five or more employees, the requirement applies, and misclassifying employees as contractors to stay under the line is exactly what an audit looks for. Worse, if the corporation was required to carry coverage and did not, Mississippi law makes the president, secretary, and treasurer personally liable for the penalties and for the benefits owed to an injured worker. The corporate form will not protect those officers. See what happens if you go without.

A Meridian example

Illustrative, not a quote. A Meridian S-corp runs an HVAC business with one working owner-officer who holds all the stock and five technicians on payroll. The company has more than five people working, so Mississippi requires a policy and the technicians must be covered. The owner holds well over 15 percent, so he could file a written election to leave himself off, but because he installs equipment alongside the crew, he keeps himself on the policy. When a builder asks for proof of coverage before a job, the company already has it. See the trade detail on our workers comp for HVAC contractors page.

Real questions Mississippi owners ask

Does my Mississippi corporation need workers comp?

If the corporation has five or more employees, yes, under Mississippi Code section 71-3-5. Working officers who draw a wage generally count toward the five, so a small corporation can reach the requirement faster than owners expect.

Do corporate officers count as employees in Mississippi?

Generally yes when they work in the business and draw a wage. Unlike a sole proprietor in some states, a working officer of a corporation is usually treated as a covered employee and counts toward the five-employee test.

Can corporate officers opt out of their own coverage?

Only if they own 15 percent or more of the stock. Mississippi lets a corporate employee at or above that share file a written election, signed by them, to leave their own coverage off. An officer below 15 percent cannot opt out.

What if my officers each own a small share of the company?

Then they usually cannot opt out. The written election is tied to owning 15 percent or more of the stock, so working officers below that share are treated as covered employees who count toward the five and must be insured.

My S-corp is just me. Do I need a policy?

If you are the only worker and you own 15 percent or more, you could elect out and have no one to insure, and no state duty. Many one-officer owners still carry coverage because they do physical work or a contract requires proof.

Does incorporating remove the workers comp requirement?

No. Once the corporation has five or more employees, it must carry workers comp like any other employer. If it does not, the president, secretary, and treasurer can be held personally liable for the penalties and the benefits owed.

What if I pay some workers on a 1099?

If those workers are really employees under Mississippi's control test, they count toward the five and must be covered. Labeling an employee a contractor does not change the requirement and is a common audit finding.

Why Mississippi owners choose Morrow

We shop the right market for you. In Mississippi you buy workers comp on the open market from any private insurer licensed in the state, because Mississippi has no state fund, and if no carrier will take you the NCCI-run assigned risk plan is the guaranteed fallback, so we can shop your rate freely and still have a backstop 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 Mississippi guides

Every Mississippi 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.

This guide is general information, not legal advice. Mississippi rules and penalty amounts can change, so verify current requirements with the Mississippi Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.