MHIC NASCLA Contractors Practice Exam

How many employees must an employer have before Workers Compensation Insurance is mandatory?

1. Five

2. Ten

3. Fifteen

4. All of the above

The correct answer is: All of the above

In many jurisdictions, including Maryland, the requirement for Workers' Compensation Insurance varies based on the number of employees an employer has. Typically, if an employer has one employee, they may be required to have Workers' Compensation Insurance; however, the common threshold for mandatory coverage often starts at five employees. The reason why all options are included in the correct answer is that different industries and specific state regulations can apply varied rules regarding when coverage becomes mandatory. For instance, some states may have different thresholds that could lead to the interpretation that at any number of employees—five, ten, or fifteen—certain forms of compliance or coverage actions may be required. This variation emphasizes the importance for employers to consult their state's specific regulations regarding Workers' Compensation to ensure compliance, as laws can vary significantly by state and industry. As such, the answer acknowledges the complexity and diversity of state laws regarding Workers' Compensation requirements.