Since 1929, the New Mexico Workers’ Compensation Act has required employers to provide no-fault insurance coverage for job-related injuries and illnesses. Whether you operate a dental clinic in Santa Fe or manage a drilling crew in Eddy County, workers’ compensation in New Mexico is not optional. It’s a legal requirement—and a system designed to protect both employees and employers.
This guide outlines who must carry coverage, what benefits are provided, how claims work, and the risks of noncompliance—all verified against state statutes and current regulatory data.
Who Must Carry Workers’ Compensation Insurance in New Mexico?
Under NMSA Chapter 52, any employer with three or more workers must carry workers’ compensation insurance. This includes full-time, part-time, seasonal, and temporary employees.
Additional coverage rules:
- Construction Businesses: Construction businesses of any size are required to carry coverage. If you are in construction, you must have worker’s compensation insurance even if you have only one employee
- Agricultural Employers: Required to carry coverage for farmworkers. Since a 2016 New Mexico Supreme Court decision (Rodriguez v. Brand West Dairy), agricultural workers cannot be excluded from protection.
- Working Owners: Business owners who actively participate in daily operations are counted as employees when calculating the coverage threshold.
- Out-of-State Employers: Must provide New Mexico-compliant coverage if employees perform work within state lines.
There are limited exemptions (e.g., some federal employees, independent contractors, and casual laborers), but these are narrowly defined and closely reviewed by the New Mexico Workers’ Compensation Administration (WCA).
What Workers’ Compensation Covers in New Mexico
Workers’ compensation in New Mexico provides no-fault benefits to employees for work-related injuries and illnesses. The system ensures timely medical care and partial wage replacement while protecting employers from civil lawsuits under the state’s “exclusive remedy” rule.
Standard coverage includes:
- Medical Benefits: Approved treatment without co-pays or deductibles. Includes doctor visits, hospitalization, surgery, rehabilitation, diagnostics, and prescriptions. Initially, the employer chooses the provider; after 60 days, the employee may select a different authorized provider.
- Disability Benefits:
- Temporary Total Disability (TTD): Applies when the employee cannot work at all during recovery.
- Temporary Partial Disability (TPD): Applies when the employee can work but in a reduced capacity.
- Permanent Partial Disability (PPD): Applies when the injury causes long-term impairment but not full disability.
- Permanent Total Disability (PTD): Applies when the employee is unable to return to any gainful employment.
- Temporary Total Disability (TTD): Applies when the employee cannot work at all during recovery.
- Death Benefits: If a work-related fatality occurs, surviving dependents may receive two-thirds of the deceased worker’s average weekly wage, plus funeral expenses (up to statutory limits).
- Specific Loss Benefits: Compensation for permanent loss or loss of use of a body part, as outlined in NMAC §11.4.4.9.
All benefits follow schedules set by the WCA, which reviews and updates medical fee schedules annually. These apply statewide, including rural zones such as Lea and San Juan counties.
Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.
Common Injury Types and Industry Risk in New Mexico
According to the U.S. Bureau of Labor Statistics (BLS) and WCA data:
- 12,400 nonfatal workplace injuries and illnesses were reported statewide in 2022.
- The trade, transportation, and utilities sector had the highest incident rate: 3.4 cases per 100 full-time workers.
- Over 6,700 DART cases (involving days away from work or job transfer/restriction) occurred in the same year.
Top risk sectors and scenarios:
- Healthcare Facilities (e.g., Albuquerque): Patient handling injuries, slips, needlestick exposures.
- Agriculture (e.g., Roswell): Equipment entanglements, heat exhaustion, livestock-related trauma.
- Oil and Gas Extraction (e.g., Carlsbad, Hobbs): Chemical exposure, burns, transportation accidents.
- Mining and Quarrying (e.g., San Juan County): Equipment malfunctions, cave-ins, long-term respiratory harm.
The geography and climate of New Mexico—especially heat, altitude, and long rural transport routes—compound injury risks, making workplace safety and coverage even more important.
Cost of Workers' Comp Insurance in New Mexico
Workers’ compensation premiums are determined by:
- – Industry classification and risk level
- – Total payroll
- – Claims history
- – Safety programs
- Payroll Rating Guidelines:
- – Sole Proprietors/Partners: $54,200 minimum when electing coverage
- – Corporate Officers/LLC Members: $52,000-$202,800 range
- – Average cost: $77 per month for typical small businesses
- Required Fees for All Employers:
- – Employer fee: $2.30 per employee per quarter
- – Employee fee: $2.00 per employee per quarter
In New Mexico, NMSA 1978, §52-1-6.2 mandates that employers with an annual workers’ compensation premium liability of $15,000 or more, or who are certified self-insurers, must undergo an annual safety inspection
You can begin this process calling a licensed advisor at 855-718-7552 for help reviewing your class codes and payroll accuracy.
Filing a Claim: Legal Obligations and Timelines
If an employee suffers a work-related injury or illness, both employer and employee must meet the timelines set by the Workers’ Compensation Administration.
Required steps:
- Employee Notification: The worker must notify the employer within 15 days of the incident. If there’s a valid reason for delay, this can be extended up to 60 days under NMSA §52-1-29.
- Employer Reporting: Employers must file a First Report of Injury (FROI) within 10 calendar days of knowledge of the injury.
- Claims Processing: If accepted, the insurer coordinates benefits. If denied, the worker may file a formal complaint with the WCA for dispute resolution.
- Use of Medical Providers: Parties must adhere to the approved provider system. Unauthorized treatment may not be reimbursed.
Annual Safety Reporting: Required if premium exceeds $15,000 annually.
Penalties for noncompliance:
- Fines up to $1,000 per violation, and up to $5,000 for repeated offenses
- Possible court orders to cease operations until coverage is secured
- Loss of exclusive remedy protection, exposing employers to direct personal injury lawsuits
