Workers Comp 101: When You’re Required to Carry It in AZ, CA, NV & TX

Workers’ compensation rules change at every state line. Here’s exactly when you’re required to carry it in the four states ProRisk Insurance serves.

California

• Required for ALL employers with at least 1 employee
• Required for ALL roofing contractors (C-39), even with zero employees
• Sole proprietors are exempt UNLESS they’re a roofer
• Penalty for not carrying it: stop-work order + $1,500 per employee + criminal charges

Arizona

• Required for any employer with 1+ employees (including part-time)
• Sole proprietors and independent contractors are exempt
• Domestic workers, casual workers, and certain ag workers are exempt

Nevada

• Required for any employer with 1+ employees
• Includes spouses, children, and family members on payroll
• Sole proprietors are exempt but can opt in

Texas

Texas is the only state in the country that does NOT require workers comp for private employers. But there’s a huge catch:

• Without workers comp, an injured employee can sue you in civil court for unlimited damages
• You lose the legal protections of the workers comp system
• Most General Contractors require subs to carry workers comp before working on a job
• Government contracts almost always require it

Translation: even though Texas doesn’t legally require it, almost every Texas business with employees still needs to carry workers comp to stay competitive and avoid personal liability lawsuits.

How Much Does Workers Comp Cost?

Workers comp is priced per $100 of payroll by class code, and the spread between trades is wide. In California, clerical payroll can run around $1 per $100, while roofing and framing can run well over $15 per $100. Arizona, Nevada, and Texas rates are generally lower, but the same pattern holds: the more physical the work, the higher the rate.