Massachusetts
Workers' Comp Exemption
Massachusetts generally requires workers’ compensation for employees regardless of how few employees the business has or how few hours they work. Sole proprietors, LLC members, and partners are not required to cover themselves personally, although they may elect coverage. A corporate officer or director owning at least 25% may request exemption through Form 153; all qualifying 25%+ officers/directors must be listed, no more than four can be exempted, and the form should be reaffirmed to the carrier annually before renewal.
Entity types analyzed
- Sole proprietor
- LLC member
- Partner
- Corporate officer
Massachusetts has a simple employee-coverage rule but two very different owner paths. Sole proprietors, LLC members, and partners are generally outside mandatory personal coverage, while qualifying corporate officers or directors need an affirmative Form 153 exemption. The company’s obligation to insure non-exempt employees survives either way.
Massachusetts generally requires workers’ compensation for employees regardless of how few employees the business has or how few hours they work. Sole proprietors, LLC members, and partners are not required to cover themselves personally, although they may elect coverage. A corporate officer or director owning at least 25% may request exemption through Form 153; all qualifying 25%+ officers/directors must be listed, no more than four can be exempted, and the form should be reaffirmed to the carrier annually before renewal.
Owner treatment at a glance
Sole proprietorA sole proprietor is not required to carry workers' compensation for themself, but any employees must be covered. The proprietor may choose personal coverage through an insurer.
LLC memberLLC members are not required to carry workers' compensation for themselves and may elect personal coverage. Any worker who is not an LLC member must still be covered when the worker is an employee.
PartnerPartners, including LLP partners, are not required to carry workers' compensation for themselves and may elect personal coverage. Employees who are not partners remain subject to the employer's coverage obligation.
Corporate officerA corporate officer or director owning at least 25% of the corporation may request exemption using Form 153. All eligible 25%+ officers/directors must be named, no more than four may be exempted, and non-exempt employees must remain covered.
There is no small-employer head-count safe harbor for ordinary Massachusetts employees
The Department of Industrial Accidents states that employers operating in Massachusetts must carry workers’ compensation for employees regardless of the number of employees or hours worked. That makes the first employee a meaningful compliance event: a business cannot rely on a three-, four-, or five-person threshold borrowed from another state.
The DIA does identify a specific domestic-employee rule based on hours, but that exception should not be generalized to ordinary commercial work. For a normal small business, the practical rule is to identify whether anyone performing services is an employee and, if so, secure coverage before relying on an owner exemption.
Owner status is not a shortcut around this company-level rule. A sole proprietor may be outside personal coverage, and a 25-percent corporate officer may obtain an exemption, while the same business still must insure every employee who is not excluded by the applicable owner rule.
Sole proprietors, LLC members, and partners start from non-mandatory personal coverage
Massachusetts does not require a sole proprietor to buy workers’ compensation solely for the proprietor. The DIA extends that owner treatment to members of an LLC and partners of an LLP or partnership: they are not required to carry workers’ compensation for themselves. Each can elect coverage if they want it by working through an insurance broker or carrier.
The word 'themselves' is the important boundary. An LLC member being outside personal mandatory coverage says nothing about an office assistant, technician, laborer, or other non-member employee. The DIA employer guide explicitly says employees who are not members or partners must be covered.
That distinction is useful when a business converts from sole proprietorship to LLC. The owner may remain outside mandatory personal coverage, but the entity record and policy should still be updated because a new legal entity has replaced the old employer. Do not treat the owner rule as proof that the new LLC has no employee obligations.
Form 153 is a narrow 25-percent corporate-officer/director exemption
A corporation is different because officers can be employees of the corporation. Massachusetts allows an officer or director who owns at least 25 percent of the issued and outstanding stock to request exemption from workers’ compensation through Form 153. The DIA’s regulation requires all officers/directors who own 25 percent or more to be named on the form, and it caps the number of exempt people at four.
This is not an employer-wide exemption. Form 153 waives the qualifying owner-officer’s own rights under the Workers’ Compensation Act; it does not remove coverage from employees who are not qualifying corporate officers. If the corporation employs even one non-exempt worker, the corporation still needs a valid workers’ compensation arrangement for that worker.
An owner-only corporation can operate without a policy when its only workers are the eligible officers/directors who have validly exercised the Form 153 exemption. That is a fact-specific endpoint, not a certificate that remains correct after the company hires someone else.
The exemption record has an annual carrier step and a separate change-of-status step
The Form 153 instructions say a copy should be submitted to the insurance carrier each year before renewal of an existing policy as confirmation that the statements on the form remain true. This annual carrier step is easy to overlook because the owner may think of the DIA approval as a one-time corporate event.
A status change requires more than waiting for the next renewal. If an officer or director’s status changes, the instructions require a new Form 153 to be filed with the DIA and provided to the carrier. A stock transfer that takes an owner below 25 percent, a new officer, or a change in who performs services can therefore make the old exemption file incomplete.
Keep the approved Form 153, stock ownership evidence, corporate officer/director records, and the annual carrier submission together. The file should make it possible to show both why the person qualified when the exemption was approved and why the qualification still exists during the current policy term.
Do not turn Form 153 into a universal certificate for contractors, clients, or every owner type
Massachusetts has no need for a sole proprietor, partner, or LLC member to file Form 153 merely to establish their ordinary owner treatment. Form 153 belongs to the corporate-officer/director path. Mixing those categories can create a false impression that an unincorporated owner lacks a valid status because there is no DIA-issued corporate form.
The reverse error is just as serious: a corporation with an approved Form 153 is not automatically exempt from workers’ compensation as a business. A general contractor or customer asking for proof may still need evidence that non-exempt employees are covered. The right document depends on what the counterparty is actually trying to verify.
When a client asks for an 'exemption certificate,' answer the underlying question first: Is the business owner-only? Is it a corporation? Are all service providers qualifying exempt officers, or are there employees? A policy certificate, approved Form 153, entity record, or written explanation may each prove a different fact.
The first employee and a change of entity type are the fastest ways to invalidate an owner-only assumption
A no-employee sole proprietor can become an employer the day a worker is hired because Massachusetts does not provide a multi-worker grace threshold for ordinary businesses. An owner-only corporation using Form 153 also changes immediately when it brings on a non-exempt employee: the owner exemption may remain valid, but the corporation now needs coverage for that employee.
Entity conversion creates a different reset. A sole proprietor who forms a corporation no longer relies on the sole-proprietor rule; a qualifying corporate owner must evaluate Form 153. A corporation that converts to an LLC leaves the Form 153 framework and moves to the DIA’s LLC-member rule. The owner’s practical work may be identical while the legal coverage path changes.
Recheck Massachusetts workers’ compensation whenever there is a first hire, ownership transfer, officer/director change, new entity, policy renewal, or new worker who is not an owner. Those events are more useful calendar triggers than an arbitrary annual 'exemption check' applied to every type of business.
Massachusetts owner checklist
- Treat the first ordinary employee as a coverage trigger; do not import another state's head-count threshold.
- Separate unincorporated owner status from the Form 153 corporate-officer process.
- For Form 153, verify 25%+ ownership, corporate officer/director status, the four-person cap, and that all eligible 25%+ owners are named.
- Keep non-exempt employees covered even when one or more owners are exempt.
- Send the approved Form 153 to the carrier before renewal each year and file a new form after a qualifying-status change.
- Re-run the analysis after a sole proprietorship/LLC/corporation conversion or the first non-owner hire.
Filing reference
Coverage ruleMassachusetts requires employers to carry workers' compensation for employees regardless of the number of employees or hours worked, except for the specific domestic-employment rule described by the DIA. Owner treatment is separate from the employee-coverage requirement.
Construction ruleThe cited DIA materials do not create a separate construction head-count threshold. The general employee-coverage rule applies, while contractor classification and project requirements should be checked separately. An owner exemption never removes the duty to cover non-exempt employees.
Form / electionForm 153 — Affidavit of Exemption for Certain Corporate Officers or Directors
RenewalA copy of an approved Form 153 should be submitted to the insurance carrier annually before policy renewal. If an officer/director's qualifying status changes, a new Form 153 must be filed with the DIA and provided to the carrier.
Effective periodThe corporate-officer exemption is tied to the approved Form 153 and the qualifying ownership/officer facts. The DIA regulation limits the exemption to eligible officers/directors and requires updated filing when status changes; it does not exempt other employees.
Responsible agency
Massachusetts Department of Industrial Accidents
Official source library
These are the state-agency, statutory, or state-board materials used for this guide. The page was last source-checked on 2026-08-25.
- Massachusetts DIA — Workers' Compensation Insurance Requirements
- Massachusetts DIA — Corporate Officers and Sole Proprietors
- Massachusetts DIA — Request a Corporate-Officer Exemption
- Massachusetts DIA — Form 153 Instructions
- Massachusetts — 452 CMR 8.06 Corporate Officer / Director Exemption
- Massachusetts DIA — Employer's Guide to Workers' Compensation