A New Mexico workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Under §52-1-7, two groups may choose not to be covered. The first is a sole proprietor. The second is an “executive employee” of a professional or business corporation or LLC who works for that business as a worker.
An executive employee means the chairman of the board, president, vice president, secretary, treasurer or another executive officer who owns 10 percent or more of the outstanding stock, or a 10 percent ownership interest in an LLC. No limit on the number of officers who may elect out was found. Executives who elect out still count toward the 3-employee threshold.
In the construction industry, a single executive employee is enough to require coverage. — while the law still requires coverage for employees once a business has 3 (NMSA 1978 §52-1-6(A) generally requires coverage for employers of 3 or more workers). Exception: employers doing work that needs a license under the Construction Industries Licensing Act must carry coverage no matter how many employees they have, which can mean 1. or more.
This guide explains who qualifies for the New Mexico workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up. Verified against New Mexico sources as of October 2026.
New Mexico at a Glance
| Coverage required at | 3 (NMSA 1978 §52-1-6(A) generally requires coverage for employers of 3 or more workers). Exception: employers doing work that needs a license under the Construction Industries Licensing Act must carry coverage no matter how many employees they have, which can mean 1. employee(s) |
| Who may elect out | Under §52-1-7, two groups may choose not to be covered. The first is a sole proprietor. The second is an “executive employee” of a professional or business corporation or LLC who works for that business as a worker. An executive employee means the chairman of the board, president, vice president, secretary, treasurer or another executive officer who owns 10 percent or more of the outstanding stock, or a 10 percent ownership interest in an LLC. No limit on the number of officers who may elect out was found. Executives who elect out still count toward the 3-employee threshold. In the construction industry, a single executive employee is enough to require coverage. |
| Filed with | The form is filed with both the employer’s workers’ compensation insurance carrier and the New Mexico Workers’ Compensation Administration Director’s Office, 2410 Centre Ave SE, Albuquerque, NM 87106 (phone 505-841-6000; toll-free 1-866-967-5667). The form is at https://www.workerscomp.nm.gov/wp-content/uploads/2025/04/executive_employee_affirmative.pdf and the WCA forms page is https://www.workerscomp.nm.gov/forms/ |
| Renewal | The election stays in effect until revoked. A revocation is filed with the insurance carrier and the WCA Director’s Office, with a copy mailed to the board of directors of the corporation or LLC (§52-1-7). No periodic renewal requirement was found. |
In This New Mexico Guide:
Who Qualifies for A New Mexico Workers Comp Exemption
Under §52-1-7, two groups may choose not to be covered. The first is a sole proprietor. The second is an “executive employee” of a professional or business corporation or LLC who works for that business as a worker.
An executive employee means the chairman of the board, president, vice president, secretary, treasurer or another executive officer who owns 10 percent or more of the outstanding stock, or a 10 percent ownership interest in an LLC. No limit on the number of officers who may elect out was found. Executives who elect out still count toward the 3-employee threshold.
In the construction industry, a single executive employee is enough to require coverage.
Under NMSA 1978 §52-1-7, a corporate executive officer who owns 10 percent or more of the outstanding stock may “affirmatively elect not to accept the provisions of the Workers’ Compensation Act.” The officer does this by filing the election with the employer’s insurance carrier and with the Director of the Workers’ Compensation Administration (WCA).
An officer who has elected out is still counted when deciding whether the employer has enough workers to need coverage. To revoke the election, the officer files a revocation with the carrier and the WCA Director’s Office and mails a copy to the corporation’s board of directors.
LLC members who own a 10 percent or more interest are executive employees under §52-1-7. They are automatically covered but may elect out by filing the same executive-employee election form. NCCI’s New Mexico instructions say partners are not covered by default but may choose coverage through a form filed with the carrier. Confirm the partner rule against the statute.
How to File the New Mexico Workers Comp Exemption
New Mexico does not use a separate state form; the election is made with the insurer on the policy. It is filed with The form is filed with both the employer’s workers’ compensation insurance carrier and the New Mexico Workers’ Compensation Administration Director’s Office, 2410 Centre Ave SE, Albuquerque, NM 87106 (phone 505-841-6000; toll-free 1-866-967-5667). The form is at https://www.workerscomp.nm.gov/wp-content/uploads/2025/04/executive_employee_affirmative.pdf and the WCA forms page is https://www.workerscomp.nm.gov/forms/.
Renewal: The election stays in effect until revoked. A revocation is filed with the insurance carrier and the WCA Director’s Office, with a copy mailed to the board of directors of the corporation or LLC (§52-1-7). No periodic renewal requirement was found.. Filing on the state’s own site costs nothing beyond any statutory fee — the “exemption filing services” that advertise on this search charge for the same form.
New Mexico Workers Comp Exemption Rules at a Glance
The exact New Mexico workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 3 (NMSA 1978 §52-1-6(A) generally requires coverage for employers of 3 or more workers). Exception: employers doing work that needs a license under the Construction Industries Licensing Act must carry coverage no matter how many employees they have, which can mean 1. |
| Who may elect out | Under §52-1-7, two groups may choose not to be covered. The first is a sole proprietor. The second is an “executive employee” of a professional or business corporation or LLC who works for that business as a worker. An executive employee means the chairman of the board, president, vice president, secretary, treasurer or another executive officer who owns 10 percent or more of the outstanding stock, or a 10 percent ownership interest in an LLC. No limit on the number of officers who may elect out was found. Executives who elect out still count toward the 3-employee threshold. In the construction industry, a single executive employee is enough to require coverage. |
| Corporate officers | Under NMSA 1978 §52-1-7, a corporate executive officer who owns 10 percent or more of the outstanding stock may “affirmatively elect not to accept the provisions of the Workers’ Compensation Act.” The officer does this by filing the election with the employer’s insurance carrier and with the Director of the Workers’ Compensation Administration (WCA). An officer who has elected out is still counted when deciding whether the employer has enough workers to need coverage. To revoke the election, the officer files a revocation with the carrier and the WCA Director’s Office and mails a copy to the corporation’s board of directors. |
| LLC members and partners | LLC members who own a 10 percent or more interest are executive employees under §52-1-7. They are automatically covered but may elect out by filing the same executive-employee election form. NCCI’s New Mexico instructions say partners are not covered by default but may choose coverage through a form filed with the carrier. Confirm the partner rule against the statute. |
| Workers exempt by law | (1) Private domestic servants, excluded by §52-1-6(A). (2) Qualified real estate salespersons under §52-1-16. This means a licensed salesperson, associate broker or broker under contract with a firm who is paid substantially by output rather than hours and works under a written contract saying they will not be treated as an employee. (3) Genuine independent contractors, who are not “workers” under the Act. (4) Farm and ranch laborers: the statute still lists this exclusion, but the New Mexico Supreme Court struck it down as unconstitutional in Rodriguez v. Brand West Dairy (2016). Farm and ranch employers with 3 or more workers should be treated as covered. No separate casual-labor dollar threshold was verified. |
| Where to file | The form is filed with both the employer’s workers’ compensation insurance carrier and the New Mexico Workers’ Compensation Administration Director’s Office, 2410 Centre Ave SE, Albuquerque, NM 87106 (phone 505-841-6000; toll-free 1-866-967-5667). The form is at https://www.workerscomp.nm.gov/wp-content/uploads/2025/04/executive_employee_affirmative.pdf and the WCA forms page is https://www.workerscomp.nm.gov/forms/ |
| Renewal | The election stays in effect until revoked. A revocation is filed with the insurance carrier and the WCA Director’s Office, with a copy mailed to the board of directors of the corporation or LLC (§52-1-7). No periodic renewal requirement was found. |
| Proof of exemption or coverage | The employer gives the general contractor or client a certificate of insurance from its carrier. Under §52-1-4, insurers file evidence of coverage with the WCA. Anyone can check coverage for free with the WCA’s Employer Coverage Look Up, searching by business name or FEIN, at https://www.workerscomp.nm.gov/e-services/. A copy of the executive-employee election filed with the WCA and the carrier shows that an owner has opted out. No separate state “exemption certificate” was found. |
What A New Mexico Workers Comp Exemption Gives Up
An exempt owner who is hurt on the job in New Mexico has no workers’ comp claim: no medical coverage from the policy, no wage replacement and no disability award. Health insurance may exclude work injuries. Most owners who physically work the job keep themselves covered for that reason.
One honest paragraph on the “ghost policy”: a minimum-premium policy with no employees sold to owners who need a certificate of insurance. It is legal in many states, but it is not a New Mexico workers comp exemption — it is coverage with nobody on it. If you add a worker, it must be reported, or the audit will find them.
Workers Exempt by Law in New Mexico
(1) Private domestic servants, excluded by §52-1-6(A). (2) Qualified real estate salespersons under §52-1-16. This means a licensed salesperson, associate broker or broker under contract with a firm who is paid substantially by output rather than hours and works under a written contract saying they will not be treated as an employee. (3) Genuine independent contractors, who are not “workers” under the Act.
(4) Farm and ranch laborers: the statute still lists this exclusion, but the New Mexico Supreme Court struck it down as unconstitutional in Rodriguez v. Brand West Dairy (2016). Farm and ranch employers with 3 or more workers should be treated as covered. No separate casual-labor dollar threshold was verified.
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Proving A New Mexico Workers Comp Exemption or Coverage
The employer gives the general contractor or client a certificate of insurance from its carrier. Under §52-1-4, insurers file evidence of coverage with the WCA. Anyone can check coverage for free with the WCA’s Employer Coverage Look Up, searching by business name or FEIN, at https://www.workerscomp.nm.gov/e-services/. A copy of the executive-employee election filed with the WCA and the carrier shows that an owner has opted out.
No separate state “exemption certificate” was found.
Why the New Mexico Workers Comp Exemption Matters
The New Mexico workers comp exemption is a trade: lower cost today against no safety net if you are hurt. The second half of the trade is the one the search results never lead with. (1) Construction-licensed employers must carry coverage with as few as 1 employee, and a single executive employee counts. (2) Executives who elect out still count toward the 3-worker threshold.
(3) The election goes to both the carrier and the WCA Director, and a revocation must also be mailed to the board of directors. (4) The statutory farm and ranch exclusion is unenforceable after Rodriguez v. Brand West Dairy (2016). Confirm all details with the NM WCA and a licensed attorney.
If the New Mexico workers comp exemption rules above leave any doubt about whether a worker counts, ask the state agency before you decide — the answer is free, and the penalty for guessing wrong is not.
Employer side: the New Mexico requirements guide covers the threshold, who counts and the penalties in full. Hurt while exempt? You may still have a claim against a third party — a licensed attorney can say.
Frequently Asked Questions
Who can file a workers comp exemption in New Mexico?
Under §52-1-7, two groups may choose not to be covered. The first is a sole proprietor. The second is an “executive employee” of a professional or business corporation or LLC who works for that business as a worker.
An executive employee means the chairman of the board, president, vice president, secretary, treasurer or another executive officer who owns 10 percent or more of the outstanding stock, or a 10 percent ownership interest in an LLC. No limit on the number of officers who may elect out was found. Executives who elect out still count toward the 3-employee threshold.
In the construction industry, a single executive employee is enough to require coverage.
What form is the New Mexico workers comp exemption?
The election is made on the policy or with the agency — see the table. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in New Mexico still collect benefits if hurt?
No. An exemption removes the owner from coverage, so there is no claim for medical care or lost wages. That is the trade.
Official New Mexico Sources & Resources
- New Mexico New Mexico Workers’ Compensation Administration (WCA): https://www.workerscomp.nm.gov/
- New Mexico Workers’ Comp Statute: https://law.justia.com/codes/new-mexico/chapter-52/article-1/section-52-1-7/ (exemption). See also §52-1-6 at https://law.justia.com/codes/new-mexico/chapter-52/article-1/section-52-1-6/
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This New Mexico workers comp exemption guide was last verified against official New Mexico sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.