Workers’ compensation is a no-fault system that protects your right to recover compensation in the event that you sustain an injury on the job. However, state laws vary on which employers are required to carry workers’ comp insurance. According to the Industrial Commission of Arizona, any employer within the state that regularly hires workers in its everyday business must carry workers’ compensation coverage. This is the case regardless of how many workers the employer employs and whether the individuals are part-time, full-time, family members, minors or illegal aliens. The short answer to your question then is yes, your employer must have workers’ compensation coverage.

Your employer is subject to consequences for failing to carry workers’ comp insurance. For starters, failure to carry workers’ compensation in Arizona is a Class 6 felony. If the state discovers that your employer does not have the appropriate coverage, it may be subject to criminal penalties.

In addition to criminal sanctions, your employer also risks civil penalties for failing to comply with the law. For a first-time violation, the ICA may assess a civil penalty of $1,000 for failing to carry the appropriate insurance. A second-time violation within five years may result in a $5,000 civil fine, while the third violation in a five-year span can result in a $10,000 assessment. On top of the fines, your employer may have to shut down operations until it complies with the requirement to obtain coverage. Arizona devised these penalties to motivate employers to comply with the law.

You should not use the contents of this article as legal advice. The article is for educational purposes only.