North Dakota
Workers' Comp Exemption
If a North Dakota business hires a non-exempt worker, WSI coverage is generally required before the worker starts. Owners, partners, and corporate officers are exempt categories that may buy elective WSI coverage; WSI guidance also treats business owners in LLCs within the owner/elective framework. A no-employee business can request a Verification of Nonemployment letter, but the form is not permission to hire without coverage.
Entity types analyzed
- Sole proprietor
- LLC member
- Partner
- Corporate officer
North Dakota is a monopoly-state system: employers do not shop private workers' compensation carriers, and WSI coverage must be in place before non-exempt employees begin working. Owners, partners, and corporate officers sit in an elective-coverage lane, while an owner-only contractor can use WSI's Verification of Nonemployment when it needs an official letter showing that coverage is not currently required.
If a North Dakota business hires a non-exempt worker, WSI coverage is generally required before the worker starts. Owners, partners, and corporate officers are exempt categories that may buy elective WSI coverage; WSI guidance also treats business owners in LLCs within the owner/elective framework. A no-employee business can request a Verification of Nonemployment letter, but the form is not permission to hire without coverage.
Owner treatment at a glance
Sole proprietorAn owner is exempt from mandatory personal coverage and may elect WSI coverage. This does not remove the duty to insure non-exempt employees before they begin work.
LLC memberWSI's owner category and employer guidance treat business owners in an LLC as eligible for elective rather than mandatory personal coverage. Use WSI's current elective-coverage process rather than assuming the LLC itself is exempt when it hires employees.
PartnerA partner is exempt from mandatory personal coverage and may purchase elective WSI coverage. Employees of the partnership remain subject to the ordinary coverage rule.
Corporate officerA corporate officer is listed among the categories exempt from mandatory personal coverage and may elect WSI coverage. The election becomes effective only after WSI approves the completed application and elective coverage contract when applicable.
North Dakota's first decision is whether WSI coverage is active before the employee's first day
WSI is the sole workers' compensation provider and administrator in North Dakota; private carriers cannot underwrite the state's statutory workers' compensation coverage. With limited exceptions, full-time, part-time, seasonal, and occasional employees must be insured before they begin working.
That timing matters for a one-owner business planning its first hire. An insurance application submitted after the worker starts does not recreate coverage that should have been secured beforehand.
Use WSI's account status—not a general-liability certificate or a policy from another state—to confirm North Dakota coverage. For an owner-only firm, keep the no-employee status documented until the hiring plan changes.
Owners can buy WSI coverage for themselves even though personal owner coverage is not mandatory
WSI's elective-coverage page lists an owner, partner, and corporate officer among the categories exempt from mandatory coverage. Those people may choose WSI protection rather than remaining outside the system personally.
Elective coverage becomes effective only after WSI approves the completed signed application and elective coverage contract when one is required. A check mailed to WSI or a draft form in the business file is therefore not the same thing as active personal coverage.
For an LLC, use the owner/elective process and current WSI account guidance instead of assuming that the LLC entity itself is exempt. Once the LLC hires a separate non-exempt employee, the company coverage obligation is distinct from the member's personal choice.
Verification of Nonemployment is a proof letter for a no-employee business, not a waiver from future hires
WSI offers a Verification of Nonemployment form when a business is not required to secure coverage and needs an official letter—commonly for a North Dakota contractor license or other proof request. The applicant acknowledges that it has no employees and does not intend to have employees.
The same acknowledgement says the business will secure proper coverage if it hires. WSI also warns that hiring a worker in North Dakota for North Dakota work makes coverage mandatory.
A contractor should therefore file the verification only when the underlying facts are true. Once a start date is set for the first employee, the old letter belongs in the historical file and the business should move to an active WSI account before work begins.
Independent-contractor status is a separate WSI determination and does not come from an owner's business title
WSI starts from a presumption that a person performing services for remuneration is an employee unless independent-contractor status is established under the common-law test. The person asserting independent status carries the burden.
WSI can make a noninsurance determination for an independent contractor, but its current coverage page says that determination is effective for no more than one year and remains subject to reconsideration or revocation.
This is different from an owner choosing elective coverage. A working owner can be personally exempt while a separate worker is still an employee, and a contractor label on an invoice does not by itself remove WSI responsibility for a worker who functions as an employee.
A North Dakota account does not automatically solve workers' compensation when employees cross state lines
WSI's current guidance explains that its authority is tied to North Dakota. North Dakota employers sending employees to other states can face that state's workers' compensation requirements, and out-of-state businesses hiring workers in North Dakota can trigger WSI even when they already have a home-state policy.
For a contractor, that makes the no-employee verification and owner exemption especially local. A letter saying WSI coverage is not required for an owner-only North Dakota operation is not an all-states workers' compensation certificate.
Before taking a crew across a border, check both WSI's reciprocal/extraterritorial guidance and the destination state's law. Do not use the owner's elective status as a substitute for the employee-location analysis.
North Dakota's uninsured-employer consequences make the first-hire trigger worth automating
WSI states that an uninsured employer can owe premium for the uninsured period, penalties and interest, and the actual cost/reserves of claims attributable to that period. Workers may also be able to sue an uninsured employer for damages from an injury during the uninsured period.
The current coverage page also identifies cease-and-desist authority and statutory penalties that can include $10,000 plus $100 per day while a violation continues. Those are employer-level consequences; they are not avoided by an owner's personal exemption.
Put a coverage check into the hiring workflow before an offer becomes a start date. The same trigger should fire after an acquisition, remote-worker hire, or contractor-license change that alters the facts behind a prior Verification of Nonemployment.
North Dakota owner checklist
- Open/confirm the WSI account before any non-exempt employee begins work.
- Treat owner elective coverage as a personal choice separate from employee coverage.
- Use Verification of Nonemployment only while the business truly has and anticipates no employees.
- Do not treat an independent-contractor label as conclusive without the WSI common-law analysis.
- Check destination-state law before North Dakota employees work across state lines.
- Trigger a WSI review before the first hire, acquisition, remote hire, or change in no-employee status.
Filing reference
Coverage ruleWith limited exceptions, an employer must insure full-time, part-time, seasonal, and occasional employees with WSI before the employees begin working. WSI is North Dakota's exclusive workers' compensation provider.
Construction ruleWSI does not publish a separate general construction head-count threshold: an employee must be insured before work begins. An owner-only contractor seeking licensing proof may use WSI's Verification of Nonemployment process if the business truly has no employees and otherwise is not required to secure coverage.
Form / electionWSI Elective Coverage application/contract for owners who want personal coverage; Verification of Nonemployment for qualifying no-employee businesses needing an official letter
RenewalThe reviewed WSI owner-exemption guidance does not use an annual owner-exemption certificate. Elective owner coverage follows the WSI account/contract, while a no-employee verification must be revisited as soon as the business hires or anticipates hiring workers.
Effective periodElective owner coverage starts when WSI approves the completed signed application and elective coverage contract when applicable. A Verification of Nonemployment is only accurate while its no-employee/significant-contact facts remain true.
Responsible agency
North Dakota Workforce Safety & Insurance
Official source library
These are the state-agency, statutory, or state-board materials used for this guide. The page was last source-checked on 2026-08-26.