Navigating Workers' Compensation in Monopolistic States

 Workers’ compensation is essential for businesses and independent contractors who hire labor. However, four states—Ohio, Washington, Wyoming, and North Dakota—operate monopolistic workers’ compensation programs, meaning coverage must be purchased directly from the state, and independent insurance carriers cannot provide it.

Your Risk

If you hire labor in these monopolistic states without registering with the state-run program, you could be liable for all injury-related costs, including medical bills and long-term care, which could run into hundreds of thousands of dollars.

What to Do

• Register with each state’s program if you hire workers there directly.
• Or hire labor through a third-party company that covers the workers under its own workers' compensation policy.
• Avoid paying workers directly unless you are registered with the state program.

Three Key Takeaways

1. Hiring labor directly in monopolistic states without proper coverage exposes you to significant liability.
2. Registering or using a labor provider with coverage limits your risk.
3. Registration includes ongoing reporting to each state agency.

State Registration Overview

• Ohio: Purchase coverage from the Ohio Bureau of Workers’ Compensation (BWC) via Form U-3.
• Washington: Get coverage from the Department of Labor & Industries (L&I), even for some independent contractors.
• Wyoming: Coverage must be obtained through the Department of Workforce Services (DWS) for all employees.
• North Dakota: Buy insurance from Workforce Safety & Insurance (WSI), which uses its own job classification codes.