Who Is Required to Carry Workers' Comp in New Hampshire?

New Hampshire law is blunt on this point: nearly every employer in the state must carry workers' compensation insurance. The state's Department of Labor treats this as a non-negotiable obligation for businesses that have employees, and the threshold for compliance is lower than most people expect. Unlike states that set a minimum employee count of three or five before the mandate kicks in, New Hampshire draws the line much earlier.

The coverage itself must be obtained either through a private insurance carrier or, for qualifying large employers, through a self-insurance program approved by the state. There's no state fund option here, so you're working with the private market. That said, the consecutive years of loss cost reductions have kept New Hampshire's workers' comp rates competitive relative to neighboring New England states.

The One-Employee Rule

New Hampshire requires workers' compensation coverage the moment you have one employee. One. Not five, not three. If you hire a single part-time worker to answer phones two days a week, you need a policy. This catches a lot of small business owners off guard, especially those transitioning from solo operations to their first hire.

The rule applies regardless of whether your employee is full-time, part-time, seasonal, or temporary. A landscaping company in Nashua that brings on summer help, a restaurant on the Seacoast hiring a weekend dishwasher, a tech startup in Manchester onboarding its first developer: they all share the same obligation. The NH Department of Labor's FAQ on workers' compensation makes this clear, and ignorance of the rule isn't treated as a defense.

Requirements for Out-of-State Employers

If your business is headquartered in Massachusetts, Maine, or anywhere else but you send employees to work in New Hampshire, you're not off the hook. New Hampshire requires that any employee performing work within the state be covered by a workers' comp policy that includes New Hampshire jurisdiction.

This means your existing policy from another state may need an endorsement or a separate filing to extend coverage into New Hampshire. Many multi-state employers handle this through an "other states" endorsement on their policy, but you should confirm with your carrier that New Hampshire is specifically listed. The penalty for assuming your home-state policy automatically covers out-of-state work can be expensive if a claim occurs on a New Hampshire job site.

Common Exemptions and Special Cases

Not every person working for your business qualifies as an "employee" under New Hampshire's workers' comp statute, and certain business structures create legitimate exemptions. These exemptions are narrower than many business owners assume, though, so it pays to understand exactly where the lines fall.

Sole Proprietors and Partners

If you're a sole proprietor with no employees, you are not required to carry workers' compensation insurance on yourself. The same applies to general partners in a partnership. The state views these individuals as business owners, not employees, and leaves the decision to them.

That said, opting out is a gamble. A sole proprietor roofer who falls off a ladder has no workers' comp safety net, and health insurance policies often exclude or limit coverage for work-related injuries. Many sole proprietors working in construction, tree service, or other physical trades choose to carry a policy voluntarily. It typically costs far less than a single emergency room visit. An agency like Avery Insurance Agency, which has been helping New Hampshire businesses since 1899, can walk you through whether voluntary coverage makes sense for your specific trade and risk profile.

Corporate Officers and LLC Members

New Hampshire allows corporate officers and LLC members to exempt themselves from workers' compensation coverage, but there's a process. You can't simply decide you're exempt and skip the premium. Officers must file the appropriate exemption paperwork, and the exemption only applies to those specific individuals, not to any other employees the business might have.

Here's a common mistake: a small LLC with two members and three employees files exemptions for the members but forgets that the three employees still require full coverage. The exemption is personal to the officer or member, not a blanket pass for the business. If you have even one non-exempt employee, you need a policy. Small business owners in New Hampshire frequently underestimate this distinction.

Independent Contractor Status in NH

Classifying a worker as an independent contractor rather than an employee is one of the most common ways businesses try to sidestep workers' comp requirements. New Hampshire applies a multi-factor test to determine whether someone is truly independent or functionally an employee, and the state doesn't take misclassification lightly.

Factors include whether you control how the work is performed, whether the worker uses their own tools and equipment, whether they serve multiple clients, and whether there's a written contract establishing the independent relationship. Simply issuing a 1099 instead of a W-2 doesn't settle the question. If the state determines a worker was misclassified, you'll owe back premiums, penalties, and potentially the full cost of any injuries that occurred during the misclassified period. A detailed breakdown of contractor versus employee factors can help you assess your current workforce structure.

Comparing Coverage Requirements at a Glance

This table summarizes who needs coverage and who may be exempt under New Hampshire law:

Keep this handy when evaluating your workforce. The "gray areas" around contractor status and officer exemptions are exactly where problems tend to surface during audits.

Penalties for Non-Compliance

New Hampshire treats failure to carry required workers' compensation insurance as a serious offense, not a paperwork oversight. If you're caught without coverage, the consequences stack up fast.

The state can issue a stop-work order, which shuts down your business operations until you obtain a valid policy. That alone can be devastating for a company with active projects or client deadlines. Beyond the operational disruption, you face fines of up to $100 per day for each day you operated without coverage, and those days add up quickly if the lapse spans months.

If an employee is injured while you're uninsured, you become personally liable for all medical expenses and lost wages. There's no cap on what that could cost. A serious back injury, a fall requiring surgery, or a repetitive stress claim from years of unprotected work: these can generate bills that bankrupt a small business. The state may also pursue criminal charges for willful non-compliance, which can result in misdemeanor penalties.

One thing to keep in mind: the NH Department of Labor actively investigates complaints and conducts audits. Employees who get hurt and discover there's no coverage tend to report the situation immediately. The penalties for operating without workers' comp in New Hampshire are designed to make compliance cheaper than the alternative, and they succeed.

Frequently Asked Questions About NH Workers' Comp

How much does workers' comp insurance cost in New Hampshire? Premiums vary based on your industry, payroll size, and claims history. A low-risk office job might cost $0.25 per $100 of payroll, while construction trades can run $5 to $15 or more per $100. The 2026 rate reductions mean most employers are paying less than they were a decade ago.

What does workers' comp actually cover? It pays for medical treatment, a portion of lost wages, rehabilitation costs, and death benefits related to work injuries or occupational illnesses. It also protects your business from employee lawsuits over covered injuries.

Can I buy workers' comp from any insurance company? You need to purchase from a carrier licensed to write workers' compensation in New Hampshire. An independent agent can help you compare options across multiple carriers to find the right fit.

What if I only have family members working for me? Family members who are employees, meaning they receive wages and you control their work, generally must be covered. The family relationship doesn't create an automatic exemption under NH law.

Do I need workers' comp if all my workers are remote? Yes. Remote employees are still employees. If they're injured performing work duties, even from a home office in Concord or Dover, workers' comp applies.

How do I file an exemption for myself as a corporate officer? You'll need to file the appropriate form with your insurance carrier and ensure the exemption is documented on your policy. Your agent should handle this during the policy setup.

Your Next Steps for Compliance

Getting workers' comp right isn't complicated, but it does require attention to the details that matter: who counts as an employee, which exemptions you actually qualify for, and whether your policy covers every state where your people work. The cost of getting it wrong dwarfs the cost of doing it right, especially with New Hampshire's 14th straight year of rate reductions making premiums more affordable than they've been in years.

Start by auditing your current workforce. Count every person who receives compensation for work, including part-timers and seasonal staff. Verify that anyone you classify as an independent contractor genuinely meets the state's criteria. If you have corporate officers or LLC members who want exemptions, make sure the paperwork is filed properly.

Working with an independent agency like Avery Insurance Agency gives you access to multiple carriers and a consultative approach that identifies gaps before they become claims. With over 125 years of experience protecting New Hampshire businesses, their team can build a workers' comp program tailored to your industry, your payroll, and your specific risk profile. Don't wait for an injury or an audit to force the issue. Get your coverage squared away now, while the rates are in your favor.