How do I know when I am required to have workers compensation in Georgia?
How many employees trigger Georgia's workers compensation requirement?
In Georgia, employers are generally required to carry workers compensation once they regularly have three or more employees, including full-time, part-time, and most seasonal workers. Workers compensation is insurance that pays medical bills and a portion of lost wages when an employee is injured or becomes ill because of their job. The three-employee threshold is the trigger, but counting who actually qualifies is where many Georgia business owners get it wrong.
Who counts toward the three-employee threshold in Georgia?
The count is not limited to full-time staff. Georgia generally counts the following toward the threshold:
- Full-time employees
- Part-time employees
- Most seasonal and temporary workers
- Corporate officers, in many cases, unless they properly exempt themselves
True independent contractors usually are not counted, but the label on a contract does not settle the question. If a business controls how, when, and where a person works, the state or the insurer may treat that worker as an employee regardless of a 1099, the tax form used for contractors. Misclassifying workers to stay under the threshold can lead to penalties and uncovered claims. For more on how Georgia defines the employee count, see the Georgia workers compensation employee count FAQ.
What is the audit trap for workers compensation policies?
Even after a policy is in place, insurers often count uninsured subcontractors as payroll at the annual audit. If a subcontractor cannot show valid workers compensation coverage of their own, the insurer may assess additional premium for that subcontractor's payroll at year-end. This is a common surprise at audit time for construction, landscaping, and service businesses that rely on contract labor.
For example, a Columbus landscaping owner believes he has only two employees because he calls a third worker a contractor. That worker uses the company's tools, follows the owner's schedule, and works only for him, so the state treats him as an employee. With three employees, the business was required to carry workers compensation. After one of them is hurt, the owner faces both an uncovered claim and a penalty for not having coverage.
Learn more about how workers compensation works and what it covers when an employee is injured on the job.
Does Georgia penalize businesses that skip workers compensation coverage?
Georgia law imposes penalties on businesses that meet the three-employee threshold but operate without coverage. Under O.C.G.A. Title 34, the State Board of Workers' Compensation can issue stop-work orders and assess fines. The financial exposure from a single uncovered injury claim can far exceed the cost of a policy, particularly in industries where injuries are common.
For example, a small Macon roofing company with three workers skips coverage to cut costs. One worker falls from a ladder and requires surgery and six weeks of recovery. With no policy in place, the business owner faces the full medical bill, lost wage payments, and a State Board penalty on top of the claim.
Where can Georgia business owners confirm their workers compensation requirement?
Because the count includes part-time and potentially misclassified workers, many businesses cross the three-employee threshold without realizing it. A coverage review at Olive Cover, the consumer brand of Olive Insurance Services, LLC, can confirm whether Georgia requires coverage for a specific business situation. See what a free coverage review involves, or schedule one directly.