Understanding When Maryland Employers Must Carry Workers' Compensation

Maryland's Legal Thresholds for Workers' Compensation Coverage

In Maryland, any employer with one or more employees who perform work for the company must carry workers' compensation insurance, regardless of the employee's salary or job title. The law applies to full‑time, part‑time, seasonal, and temporary workers, as long as the work is performed for the employer's benefit and the employee is not an independent contractor.

Key Situations That Trigger the Requirement

While the blanket rule covers most workplaces, certain scenarios are especially important to recognize:

• Hiring a single part‑time assistant or a freelance designer who works on‑site.
• Employing a family member who is paid wages and performs regular duties.
• Engaging a temporary worker through a staffing agency; the agency, not the host company, must provide coverage.
• Running a construction or landscaping business where workers are exposed to higher injury risk.

Exceptions and Special Cases

Maryland law exempts a few categories of workers from mandatory coverage. These include:

• Independent contractors who control their own work schedule and supply their own tools.
• Volunteers who are not compensated and work for a nonprofit or charitable organization.
• Owners of a corporation who are the sole shareholder and do not receive a salary.

Even when an exemption seems applicable, many employers choose to purchase coverage voluntarily because it protects against costly lawsuits and provides benefits to injured workers.

Industry‑Specific Considerations

High‑risk industries—such as construction, manufacturing, and healthcare—often face stricter scrutiny. Inspectors may verify that subcontractors carry their own policies, and failure to do so can result in fines or a stop‑work order. Conversely, low‑risk sectors like office administration still must maintain coverage, but premiums are typically lower.

How to Verify Coverage

Employers can confirm they are compliant by:

• Obtaining a Workers' Compensation Insurance Certificate from a licensed carrier.
• Registering with the Maryland Workers' Compensation Commission (MWCC) and filing the required employer registration form.
• Keeping records of all employees, including start dates and job classifications, for at least three years.

Table: Common Scenarios and Coverage Requirement