Legal

Workers' Compensation

State-mandated insurance that pays for medical care and lost wages when employees are injured on the job.

Workers' comp is required by state law (with narrow exceptions) for any business with employees. Premiums are calculated based on payroll, broken down by job classification (a roofer's rate is much higher than an office worker's). Class codes and "experience modifiers" (ratings based on past claims) drive premium. GCs often require subs to carry their own workers' comp before allowing them on-site. Sole-proprietor sub workarounds are common but state laws vary.