Georgia law requires workers compensation insurance for any business with three or more employees, including part-time workers. The threshold is three, not three full-time equivalents. If you have two full-time employees and one part-time employee who works six hours a week, you are over the threshold and legally required to carry coverage.

The three-employee rule in practice

The Georgia workers compensation statute counts every employee on the payroll regardless of hours worked, classification, or whether they are considered temporary. Corporate officers can elect to exclude themselves from coverage in some cases, but that election must be formal and properly filed. Business owners who assume they are excluded and fail to document that exclusion properly have had claims denied and faced personal liability for employee injuries.

Penalties for operating without required workers compensation coverage in Georgia include stop-work orders, civil fines, and personal liability for the cost of any employee injury during the period of non-compliance. The State Board of Workers' Compensation actively enforces compliance through random audits and complaints.

What workers compensation covers

A workers compensation policy covers medical expenses for employees injured on the job with no dollar limit, a portion of lost wages while the employee is unable to work, rehabilitation costs, and death benefits to dependents if an employee is killed in a work-related accident. It also covers the employer's legal liability if an employee sues over a workplace injury, though workers compensation is typically the exclusive remedy and limits the employer's exposure significantly.

What workers compensation does not cover

Workers compensation does not cover independent contractors unless they are reclassified as employees under Georgia or federal law. It does not cover injuries that occur outside the scope of employment, injuries caused by an employee's intentional self-harm, or injuries resulting from an employee being under the influence of drugs or alcohol at the time of the incident. It does not cover non-employees such as volunteers or interns unless specifically added.

How Georgia workers compensation is priced

Premium is calculated based on your payroll and your class code, which reflects the type of work your employees perform. A clerical worker carries a much lower rate than a roofer or a landscaper. Your experience modification factor, called an e-mod, adjusts your premium based on your actual claims history compared to other businesses in your class. A clean claims history produces an e-mod below 1.0, reducing your premium. Frequent or severe claims push the e-mod above 1.0, increasing it.

For most Georgia small businesses with office-based employees, workers comp premiums run $1.50 to $3.00 per $100 of payroll. For contractors and trades, rates run $6 to $20 per $100 of payroll depending on the specific class code and claims history.

The 1099 contractor question

If you use 1099 contractors, Georgia workers compensation law may still require you to cover them if they do not carry their own coverage and are performing work that is part of your regular business. This is a common area of exposure for general contractors who subcontract work. Requiring subcontractors to provide certificates of insurance showing their own workers compensation coverage is the standard practice and should be part of every contractor agreement.