If you are an employer looking to hire anyone, you will need to have workers compensation insurance. That insurance protects you and the worker in the case the worker gets injured on the job and is due compensation. Most states allow you to purchase workers compensation insurance from private carriers. That type of market makes up 90% of the United States. However there are four states that do not allow employers to use private carriers. Instead, the state carries a private fund for workers compensation, which employers have to pay into. So which states are monopolistic?
Monopolistic Workers Compensation States
Ohio
The buckeye state has been a monopolistic state since 1912. The Ohio Bureau of Workers Compensation (BWC), is the single source of workers compensation for all employers that have employees working in the state of Ohio. The state uses the NCCI classification system and uses that system to establish “experience ratings” for all employers. This enables the state to assign a workers compensation rate for each employer, which determines how much the employer pays.
North Dakota
In 1919 North Dakota created their WCB or Worker’s Compensation Bureau, which operates under their Workforce Safety and Insurance department. Similar to Ohio and the other states, this body exists to provide protections to workers that are injured on the job. Similarly this body assigns an experience rating to each employer and this allows them to provide a rate to be charged to each employer for their workers.
Washington
This northwestern state began a monopolistic workers compensation law in 1911. They are very similar to the other states that are monopolistic. However, they have a different set of workers compensation codes that they use, which can be confusing to employers new to the state.
Wyoming
In 1915, the state of Wyoming implemented their workers compensation law, and became a monopolistic state. The Wyoming department of employment is responsible for administering the workers compensation plan. As with the other states, they use a system to identify employers, job types, and experience levels to prescribe rates to charge for each employee.
How to hire in those states without an entity
If you’re struggling to hire an employee in monopolistic states, or your employee is moving to one of these states, do not worry. There are solutions that allow you to hire or retain employees without establishing an entity in that state. Most employers exploring alternative solutions find that Employer of Record (EOR) platforms provide the most holistic solution, enabling them to deliver a seamless employment experience to their employees. An EOR will become the legal W2 employer of the employee in whatever state you are looking to hire. They serve as your “entity” in whatever state you wish, and assume all the burdens of employment. This includes workers compensation. However, most EORs also deliver health benefits, payroll, time & attendance, and more solutions. This allows your employee to feel supported and you to focus on running your business.
What is FoxHire?
FoxHire is an Employer of Record platform that works with thousands of employers and recruiting agencies within the United States and internationally. FoxHire serves as the W2 Employer of Record (EOR) for its clients, and handles all the employment duties. They specialize in healthcare, education, and office roles, but can handle almost any work environment. Since 1992 FoxHire has been ensuring employees are supported and clients can leverage the talent they need to succeed.
