How do I know when I am required to have workers compensation in Georgia?

In Georgia, you are generally required to carry workers compensation once you 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.

The count is not limited to full-time staff. For this purpose, Georgia generally counts:

• Full-time employees
• Part-time employees
• Most seasonal and temporary workers
• In many cases, corporate officers, unless they properly exempt themselves

True independent contractors usually are not counted, but the label on a contract does not settle the question. If you control how, when, and where a person works, the state or your 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.

There is also a common audit trap. Even after you have a policy, insurers often count uninsured subcontractors as payroll at the annual audit, so you can be charged premium for any contractor who cannot show their own valid coverage.

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.

Because the count includes part-time and misclassified workers, many businesses cross the threshold without realizing it. We can confirm whether Georgia requires you to carry coverage with a free coverage review at our coverage review page.