Most Minnesota businesses with employees are required to pay for workers' compensation insurance (WC or workers' comp insurance). The insurance provides compensation to employees who suffer work-related injuries. Here are some basic facts that you need to know about workers' comp insurance in Minnesota as a business owner and employer.
If your Minnesota business has just one employee, even if that employee only works part-time, you're generally required to carry workers' compensation insurance. Limited exceptions apply to workers in private homes who earn less than $1,000 in a three-month period, certain farming situations, and some cases where an employee is a family member. In addition, business owners, such as members of LLCs, certain corporate officers, and sole proprietors are not required to be covered by workers' compensation insurance.
The Minnesota Department of Labor & Industry (DLI) is the primary state agency that handles workers' comp claims. Most of the law for WC insurance is contained in Minnesota's Workers' Compensation Act (Chapter 176 of the Minnesota Statutes). In addition to the Act, there are also administrative rules (Chapter 5520 of the Minnesota Administrative Rules) that cover workers' compensation in Minnesota.
In Minnesota, workers' compensation insurance is available through private insurance companies. If your business is unable to obtain coverage through a private insurer, you can get coverage through so-called assigned risk-pool insurance. There is also an option to self-insure, but this may not be advisable for smaller businesses, in part because it requires that a lot of money be set aside to cover potential claims.
Depending on the circumstances, an employee may have 14 days, 30 days, or even 180 days to notify you of an injury. As soon as you are notified, you should immediately report it to your workers' comp insurance carrier. Use Form FR01, First Report of Injury. You must complete this form within 10 days of being notified. If the injury is "serious" — or results in death — you must file the report within 48 hours. The insurer, in turn, must file the report electronically with DLI. You must also provide a copy of the form to your injured employee and retain a copy for your records.
Beyond these initial steps, there are subsequent steps to the WC claims process, not covered here.
You or your WC insurer may choose to deny your employee's workers' comp claim. If that happens, you or your insurer must send a notice of denial of liability to the employee within 14 days of being notified of the injury. The employee then has the option to file a Form EC04, Employee's Claim Petition, with the DLI.
The DLI will then hold an administrative conference to try to informally resolve the dispute. If you cannot reach an agreement, the DLI will make its own decision. At that point, if you don't like the decision, you can appeal it and have a hearing before a workers' compensation judge. The hearing is more formal and can include submission of evidence and testimony of witnesses. From that point, you can then appeal to Minnesota Workers' Compensation Court of Appeals, and, ultimately, to the state Supreme Court.
You are subject to various penalties if you fail to carry workers' compensation insurance as required. This includes:
There are many other workers' compensation requirements for Minnesota employers, such as putting up posters about workers' compensation coverage where employees can see them, that are not covered here. However, the Nolo website has a section devoted to workers' compensation. In addition, the DLI website also contains many useful resources.