Vermont workers comp requirements decide exactly when an employer must carry coverage, who counts toward the threshold, and the penalty for going without. This guide breaks down the Vermont workers comp requirements in plain English. (Injured instead of hiring? See our Vermont settlement and claim guides linked below.) All figures are from Vermont sources, verified as of June 2026.
Vermont at a Glance
| Required at | 1 employee(s) |
| Which workers count | Coverage is required for any business employing one or more workers, counting full-time, part-time, and seasonal employees; there is no separate construction-only rule because coverage already applies from the first employee in every industry. |
| Who is exempt | Sole proprietors and partners are automatically excluded (may elect in); casual laborers not employed in the core functions of the business are exempt; agricultural/farm workers are exempt only if the farm operation has less than 10000 in annual aggregate payroll (coverage becomes mandatory once that threshold is crossed). |
| Penalty for going without | Administrative penalty of up to 100 per day for the first seven days without required coverage and up to 150 per day thereafter (21 V.S.A. § 692); the Commissioner shall issue a stop-work order halting business until coverage is secured; after a stop-work order, up to 250 per day plus up to 250 per employee per day of continued non-compliance, and the employer is personally liable for all costs of any injury occurring while uninsured. |
| Monopolistic state? | No — private carriers |
In This Vermont Guide:
Is Workers’ Comp Required in Vermont?
Yes — workers’ compensation is required for all Vermont employers from the moment they hire their first employee, with no minimum-employee threshold.
Vermont Workers’ Comp Requirements at a Glance
Here are the exact Vermont workers comp requirements every employer should know:
| Employees that trigger the mandate | 1 |
| Which workers count | Coverage is required for any business employing one or more workers, counting full-time, part-time, and seasonal employees; there is no separate construction-only rule because coverage already applies from the first employee in every industry. |
| Who is exempt | Sole proprietors and partners are automatically excluded (may elect in); casual laborers not employed in the core functions of the business are exempt; agricultural/farm workers are exempt only if the farm operation has less than 10000 in annual aggregate payroll (coverage becomes mandatory once that threshold is crossed). |
| Owners & officers | Corporate officers and LLC members are automatically included but may elect to exclude themselves by filing Form 29 (Application for Exclusion) and obtaining prior approval from the Vermont Department of Labor; a corporation/LLC can be wholly excluded only when all officers/members are excluded, the entity has no other workers, and notarized board-minutes approving the exclusion are submitted. |
| Penalty for going without | Administrative penalty of up to 100 per day for the first seven days without required coverage and up to 150 per day thereafter (21 V.S.A. § 692); the Commissioner shall issue a stop-work order halting business until coverage is secured; after a stop-work order, up to 250 per day plus up to 250 per employee per day of continued non-compliance, and the employer is personally liable for all costs of any injury occurring while uninsured. |
| Monopolistic state? | No — buy from private carriers |
| State fund | NONE — Vermont has no state fund. |
How to Get Workers’ Comp Coverage in Vermont
Vermont employers buy coverage from any private insurer/agent/broker licensed in the state; employers unable to obtain voluntary-market coverage use the Vermont Assigned Risk Pool administered by NCCI; qualifying employers may instead apply to self-insure through the Department of Labor.
Private market: YES
What Workers’ Comp Covers in Vermont
Workers’ compensation is a no-fault system: an injured employee gets benefits without having to prove the employer did anything wrong, and in exchange gives up the right to sue for most workplace injuries. A typical Vermont policy pays for medical treatment tied to a work injury, part of the wages lost while the worker recovers, longer-term disability benefits if the injury is permanent, and death benefits to a family.
It also includes employers-liability coverage, which protects the business if an injury still leads to a lawsuit.
Employees vs. Independent Contractors in Vermont
The most common way employers get the Vermont workers comp requirements wrong is by assuming a worker is an “independent contractor” who does not count. State agencies look at how the work is actually controlled, not the label on a 1099. If Vermont decides a contractor was really an employee, the business can owe back premiums and penalties as if coverage should have been in place all along.
When you are close to the employee threshold, confirm each worker’s status with your state board before you decide you are exempt.
Other Vermont workers’-comp rules: Vermont employers must post a notice of compliance showing they carry coverage; a First Report of Injury must be filed even if the employer disputes the claim, and the employer has 21 days from notice of an injury to determine whether compensation is due. Self-insurance is permitted for employers meeting Department of Labor standards for assets, profitability, cash flow, bonding, and excess-liability guarantees.
Understanding Vermont Workers Comp Requirements
The Vermont workers comp requirements exist so injured employees get care and lost wages without having to sue. For most employers, the Vermont workers comp requirements come down to one number: the employee count that triggers the mandate, shown in the table above. Once you hit that count, Vermont workers comp requirements apply whether you planned for them or not, and the penalty for going without is real.
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If any part of the Vermont workers comp requirements is unclear, your state board can confirm the threshold, the exemptions, and how to get covered.
Need to get covered? If you are an employer in Vermont shopping for a policy, our sister site compares small-business insurance, including workers’ comp. Compare business insurance options →
Frequently Asked Questions
Is workers’ comp required in Vermont?
Yes — workers’ compensation is required for all Vermont employers from the moment they hire their first employee, with no minimum-employee threshold.
What is the penalty for not having workers’ comp in Vermont?
Administrative penalty of up to 100 per day for the first seven days without required coverage and up to 150 per day thereafter (21 V.S.A. § 692); the Commissioner shall issue a stop-work order halting business until coverage is secured; after a stop-work order, up to 250 per day plus up to 250 per employee per day of continued non-compliance,
and the employer is personally liable for all costs of any injury occurring while uninsured.
Who is exempt from Vermont workers’ comp?
Sole proprietors and partners are automatically excluded (may elect in); casual laborers not employed in the core functions of the business are exempt; agricultural/farm workers are exempt only if the farm operation has less than 10000 in annual aggregate payroll (coverage becomes mandatory once that threshold is crossed).
Official Vermont Sources & Resources
- Vermont Vermont Department of Labor, Workers’ Compensation Division: https://labor.vermont.gov/workers-compensation
- Vermont Workers’ Comp Statute: https://legislature.vermont.gov/statutes/chapter/21/009
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
These Vermont workers comp requirements were last verified against official sources in June 2026. Rules and penalties change — confirm the current figure with your state workers’-comp board or a licensed agent.
More Vermont Workers’ Comp Guides
- Vermont Workers’ Comp Settlements
- How to File a Vermont Workers’ Comp Claim
- Workers’ Comp Guides for All 50 States
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.