What to know about workers' compensation in Maine

Workers’ compensation, which can provide cash and medical care to employees injured on the job, and benefits to survivors in cases of a work-related death, began with a federal program in 1908. It gave benefits to civilian workers whose jobs were hazardous and became the first kind of social insurance established across the United States.

By 1916, the rest of the federal workforce was covered. States meanwhile were enacting their workers’ compensation laws. All but six states and the District of Columbia had them by 1921.

Today, programs exist in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The details of each program vary by state. Four states—Ohio, North Dakota, Washington and Wyoming—require insurance be obtained through a state-administered fund rather than through a private insurer. Another option is to self-insure for approved businesses. Most states require some businesses to provide coverage and can levy substantial fines for failing to comply. South Dakota and Texas leave the choice to businesses, although Texas makes an exception for construction companies with a government contract.

Simply Business reviewed rules, statistics, and other information about workers’ compensation insurance—including the comprehensive breakdown by the National Federation of Independent Business—to offer a breakdown of what workers’ comp requirements in each state. Rules are subject to updates periodically, so it’s important to stay up-to-date based on your trade and location.

Workers' Compensation in Maine

Businesses with at least one employee must have workers’ compensation coverage, but there are exemptions, including for employees who work on farms or in the fishing industry. Employers that hire only seasonal workers in agriculture or aquaculture are required instead to have $25,000 in liability insurance and medical coverage of $5,000. Employers that have six or fewer employees in those businesses must carry liability insurance of $100,000 for the equivalent of each full-time employee and medical coverage of at least $5,000. Employers that fail to provide coverage could face fines of up to $10,000 or the equivalent of 108% of the premium. Maine has a state-administered fund.

Workers’ Compensation Benefits, Costs, and Coverage, an October 2021 report from the National Academy of Social Insurance, found that total benefits paid to employees rose by 0.4% nationwide from 2015 to 2019. Cash benefits rose by 2%, but medical benefits fell by 1.1%. Standardized benefits fell— cash by 14% and medical benefits by 16.7%—over the same period.

Keep reading to see what workers' compensation looks like for other states in your area.

Workers' Compensation in New Hampshire

Nonprofit organizations are counted among the businesses that must provide workers’ compensation coverage in New Hampshire, where the law applies to all employers with any workers, whether full-time, part-time or relatives. Sole proprietors, self-employed workers, and partners do not have to carry coverage. Nor is coverage required for corporations or limited liability companies with three or fewer executive officers and no additional employees. Insurance becomes mandatory once a fourth person is added. The penalty for failing to have coverage can be as high as $2,500 plus up to $100 per employee for each additional day.

Workers' Compensation in Vermont

Employers with at least one employee, part- or full-time, must carry coverage in Vermont. Agricultural and farming employees whose employer’s payroll is less than $10,000 over the year are exempt. Also excluded are casual employees who perform work outside of their employer’s business. Penalties for fraud are a fine of up to $100,000, a three-year prison term, or both, for crimes involving $10,000 or more, or up to $10,000, two years in prison, or both, for crimes involving less than $10,000. An employer that fails to maintain workers’ compensation insurance could be fined up to $150 a day thereafter.