If you run a business in Minnesota—even with just one part-time employee—you are legally required to carry Minnesota workers’ comp insurance. The rules apply to nearly all industries and are enforced by the Minnesota Department of Labor and Industry. Failing to comply could result in fines, lawsuits, or even business closure.
This guide explains who needs coverage, what’s included, how much it costs, and how to stay compliant with workers’ comp requirements MN.
Who Needs Workers' Comp in Minnesota?
If your business employs even one person—whether full-time, part-time, or seasonal—you must provide workers’ comp coverage. This requirement is defined under Minnesota Statutes §176.181.
Exemptions
Only a few business types are exempt—and only if they have no employees:
- Sole proprietors
- Business partners
- Qualified family farms
Hiring even one employee removes the exemption immediately.
Industry-Specific Rules
Certain sectors have additional rules under workers’ compensation compliance MN laws:
Construction: You must cover all workers, including subcontractors treated as employees under state rules.
Agriculture: Family-run farms may be exempt—but bringing in outside labor (even for harvest) means coverage is required.
Healthcare: Because of high injury rates, medical practices and clinics must carry full coverage to protect staff from lifting injuries, infections, and more.
Wage Replacement:
Benefits have a 3-day waiting period. Wage-loss benefits won’t be paid until employees have missed three calendar days of work. However, if disability continues for ten calendar days, they will be paid for the entire absence time.
- Temporary Total Disability (TTD): Covers two-thirds of the worker’s average weekly wage while they’re unable to work.
- Temporary Partial Disability (TPD): Pays partial wages if the employee returns in a limited role.
- Permanent Total Disability (PTD): Long-term support for employees who cannot return to any job because of the injury.
Medical Coverage
Pays for doctor visits, surgeries, therapy, and medications tied to the work injury.
Real Risks: Common Injury Claims in Minnesota
Minnesota’s cold winters and industrial sectors contribute to a wide range of Minnesota work injury claims. Understanding common risks helps you prepare:
Most Affected Industries:
- Construction: Falls from scaffolding or icy rooftops in winter projects
- Manufacturing: Crush injuries, chemical burns, or repetitive motion claims
- Transportation: Road accidents increase during icy months—especially in rural counties
State-Specific Hazards:
- Slip-and-fall injuries during snow and ice season
- Equipment-related injuries at logging, farming, and manufacturing job sites.
What Workers' Comp Costs in Minnesota
No flat rate exists for coverage. Premiums vary based on:
- Industry classification (NAICS code)
- Total payroll and number of employees
- Claims history (experience modifier)
- Safety programs or training protocols
- Location (urban vs. rural)
- Voluntary market vs. assigned risk pool
Workers’ compensation costs vary significantly based on industry, payroll, and risk factors. Contact licensed agents for accurate quotes specific to your business.
Compared to nearby states like Iowa and Wisconsin, Minnesota’s open market system lets safer businesses get better rates by shopping around.
Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.
How the Claims Process Works
When a work injury happens, employer responsibilities and workers’ compensation Minnesota law kick in right away.
Step-by-Step Process:
- Employee Notice: Injured workers must notify their employer within 180 days of the injury occurrence
- Employer Filing: You must submit a First Report of Injury (FROI) to your insurance company within 10 days of learning about the injury. The insurance company must then file it with the Department of Labor and Industry within 14 days of the first day of disability or date of notice, whichever is later.
- Claim Handling: If a dispute arises, the Department offers mediation services and administrative conferences to resolve issues quickly
What Happens If You Don't Comply?
Failing to carry coverage can lead to serious penalties:
- You may owe all medical costs and wage benefits out-of-pocket
- You could face civil lawsuits from the injured worker
- The state may impose fines of up to $1,000 per employee per week for lack of coverage
- If an employee is injured while you lack coverage, you may have to reimburse the Special Compensation Fund plus a 65% penalty
“Minnesota takes enforcement seriously—especially in construction, transportation, and healthcare sectors where injury risks are highest.”
Important Updates for 2023–2025
Recent legislative changes introduced updates to self-insurance regulation, allowing better cost control without reducing worker protections. These changes are part of broader efforts to keep costs per $100 payroll stable or declining.
What Employers Should Do Now
If you employ even one person, here’s how to stay compliant:
- Secure valid workers’ compensation insurance—before your next hire
- Review industry-specific endorsements (roofing, trucking, etc.)
- Call our licensed experts for help: 855-718-7552
Get Covered Before It’s Too Late
Protecting your team protects your business. Whether you’re running a contracting firm in Duluth or a dental clinic in Rochester, your first step to compliance is just one click away.
