Workers’ compensation insurance in Massachusetts: who must carry it

Key takeaways

• Massachusetts General Laws chapter 152, section 25A requires every employer with one or more employees in Massachusetts, full time or part time, to carry workers’ compensation insurance.
• The Department of Industrial Accidents (DIA) says the only hours-based exception is for domestic service employees, who must work at least 16 hours a week before coverage is required.
• Sole proprietors, partners and LLC members do not have to cover themselves, and corporate officers who own at least 25% of the corporation can opt out by filing DIA Form 153.
• A DIA stop work order carries a fine of $100 a day, counting weekends and holidays, and $250 a day if you appeal and lose.
• Criminal penalties under section 25C reach $1,500, one year in prison or both, and an uninsured employer is barred from state and municipal funded contracts for three years.
• Anyone can check a business’s coverage for free with the DIA’s Proof of Coverage search or by calling the DIA Office of Insurance at (617) 626-5480.

If you own or manage a small business in Boston or anywhere else in Massachusetts and you pay even one person to work for you, you need a policy. Massachusetts workers compensation insurance is coverage that pays for an employee’s medical treatment and part of their lost wages after a work-related injury or illness. State law requires it of nearly every employer, with no minimum number of employees and no minimum hours. The rule is set by the state, not by the City of Boston, and the Department of Industrial Accidents enforces it.

This guide covers who must carry coverage, who can leave themselves off a policy, where to buy one, what a stop work order costs, how to look up proof of coverage, and what you have to post and report once you are insured.

Who must carry workers’ compensation insurance in Massachusetts?

Workers’ compensation insurance in Massachusetts must be carried by every employer with one or more employees working in the state. The DIA’s insurance requirements page says the rule applies “regardless of hours worked or number of employees,” and that it covers you as well if you are an employee of your own company. The underlying statute is M.G.L. c. 152, s. 25A.

The Department of Industrial Accidents is the state agency that oversees the Massachusetts workers’ compensation system. Its main office is at Lafayette City Center, 2 Avenue de Lafayette, Boston.

An employee, under M.G.L. c. 152, s. 1(4), is every person in the service of another under any contract of hire, express or implied, oral or written. The DIA’s Quick Start Guide for employers adds that family members are not exempt and that paying someone on a Form 1099 does not by itself take them out of coverage.

Out-of-state employers have to cover every employee who works in Massachusetts. According to the DIA, a policy that lists Massachusetts in section 3A of its information page meets the requirement. If the policy relies on section 3C (all states coverage), the insurer must file Form 154, Verification of Workers’ Compensation Coverage by Out-of-State Employers Operating in Massachusetts.

Who is exempt from workers’ compensation coverage in Massachusetts?

Exemptions from workers’ compensation coverage in Massachusetts are narrow, and most of them apply to owners, not to staff. The DIA and M.G.L. c. 152, s. 1 list these cases:

• Sole proprietors, partners in an LLP and members of an LLC are not required to cover themselves. They can buy optional coverage through an insurance broker. Any non-owner employee still has to be covered.
• Corporate officers or directors who own at least 25% of the corporation can exempt themselves. The DIA’s Quick Start Guide caps this at four people per corporation.
• Domestic service employees who work fewer than 16 hours a week do not have to be covered.
• Real estate salespeople paid only by commission and taxi drivers who lease a cab for a flat fee are excluded from the definition of employee, each under conditions written into section 1(4).
• A nonprofit staffed only by volunteers is not an employer under section 1(5).

A corporate officer claims the exemption on Form 153, Affidavit of Exemption for Certain Corporate Officers or Directors. Every eligible officer who wants out signs the form, and you send it to the DIA Office of Investigations by email, mail, fax or in person, as described on the DIA’s exemption request page. Form 153 does nothing for employees who are not officers.

Do independent contractors need to be covered?

Independent contractors do not need to be on your workers’ compensation policy, but Massachusetts presumes that a worker is an employee until you show otherwise. The DIA’s page on who is covered says status is decided case by case and points to the three-part test in M.G.L. c. 149, s. 148B. Under that test the work is done free of your direction and control, falls outside the usual course of your business, and is performed by someone who runs an independent business in that field.

General contractors carry a second risk. The DIA says a general contractor can be liable for claims made by a subcontractor’s workers, which is why many ask each subcontractor for proof of coverage before work starts.

How do you get workers’ compensation insurance in Massachusetts?

Workers’ compensation insurance in Massachusetts is bought from a private insurer, usually through an insurance agent or broker. The DIA does not sell policies and does not set rates or classification codes. Its page on how and where to get coverage lays out the routes:

1. Contact an insurance agent, a broker or an insurance company licensed in Massachusetts and apply for a policy.
2. If two insurance companies send you rejection notices, apply to the assigned risk pool. The Workers’ Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA) runs the pool.
3. If you are a large employer, ask the DIA’s Office of Insurance about a self-insurance license. The DIA sets the floor at 300 employees and $750,000 in annual standard premium, so few small businesses qualify.

Section 25A also allows an employer to join a workers’ compensation self-insurance group.

What happens if you operate without workers’ compensation insurance?

Operating without workers’ compensation insurance in Massachusetts leads to a stop work order from the DIA Office of Investigations. A stop work order is a written order, issued under M.G.L. c. 152, s. 25C, that requires all business operations at the workplace or job site to cease. The order takes effect when it is served and stays in place until you show proof of coverage and pay the fine.

Consequence	Amount or length	Source
Stop work order fine	$100 a day, including weekends and holidays, starting the day the order is served	M.G.L. c. 152, s. 25C; DIA
Fine if you appeal and are found uninsured	$250 a day	M.G.L. c. 152, s. 25C
Criminal penalty	A fine of up to $1,500, up to one year in prison, or both	M.G.L. c. 152, s. 25C
Debarment from state and municipal funded contracts	Three years	M.G.L. c. 152, s. 25C

You have 10 days from service to appeal a stop work order, and the statute requires a hearing within 14 days after the DIA receives the appeal. Section 25C says the order is not in effect while a timely appeal is pending, so the business can stay open.

Other costs follow. Section 25C requires you to pay employees for the first ten days of work they lose to the order. If a worker is hurt while you are uninsured, the Workers’ Compensation Trust Fund may pay the benefits, and the DIA’s Quick Start Guide says the agency may sue you to recover them. State and local licensing agencies must also withhold a business license or permit, including a building permit, from an applicant who has not shown proof of coverage.

How do you check whether a business has workers’ compensation coverage?

You can check whether a business has workers’ compensation coverage with the DIA’s free Proof of Coverage search, which is online at all hours. The DIA’s coverage lookup page says you need three things: the business name, the city or town where it is located, and the zip code.

You can also call the DIA Office of Insurance at (617) 626-5480 or (617) 626-5481.

A blank result is not proof that a business is uninsured. The DIA cautions that the employer may hold a policy under a different business name, may be a licensed self-insurer, or may belong to a self-insurance group.

What do you have to post and report once you are insured?

Once you are insured, you have to post the DIA’s Notice to Employees and report serious injuries on Form 101. The Notice to Employees poster goes in an area all employees use. The DIA updated it on July 29, 2024 and offers it in ten languages. The DIA’s Employer’s Guide puts the fine for failing to post at $100.

Form 101 is the Employer’s First Report of Injury/Fatality. According to the DIA’s page on when an injury must be reported, you file it once an employee has been disabled for five full or partial calendar days, which do not have to be consecutive. The deadline is seven calendar days after the fifth day of disability, not counting Sundays and legal holidays. Form 101 is filed electronically through a DIA online account.

An injury that keeps someone out fewer than five days is a medical-only claim. You report it to your insurer or agent, not to the DIA.

What should you recheck before you act?

The figures below were checked on November 13, 2026. Confirm each one before you rely on it.

• Stop work order fines of $100 and $250 a day, the $1,500 criminal fine and the three-year debarment: M.G.L. c. 152, s. 25C on malegislature.gov and the DIA Office of Investigations.
• Appeal rules for a stop work order: DIA publications describe the effect of an appeal in different ways, so read section 25C and the order itself, and ask the Office of Investigations.
• The 25% ownership rule, the four-person cap and the current Form 153: the DIA exemption request page.
• The self-insurance floor of 300 employees and $750,000 in premium: the DIA Office of Insurance.
• The Notice to Employees version date (July 29, 2024) and the $100 posting fine: the DIA poster page and Employer’s Guide.
• DIA phone numbers and the Form 101 deadline: the DIA’s employer pages on mass.gov.

This guide is general information, not legal or tax advice. Rules and fees change; confirm the current requirements with the agency named before you file or pay.

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