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In the Grand Canyon State, Arizona's workers' compensation laws are designed to protect both employees and employers in the event of workplace injuries or illnesses.
Our detailed breakdown of Arizona workers’ compensation insurance and its laws will help you navigate and understand policies and rules more easily.
If you’re a business owner in Arizona, it’s crucial to protect yourself, your business and your employees with workers’ compensation insurance.
Workers’ compensation insurance is designed to provide employees who suffer work-related injuries or illnesses with medical treatment and indemnity benefits.
Its primary purpose is to ensure that employees receive compensation for work-related injuries or illnesses without filing a lawsuit against their employer, and it helps to ensure a safe and swift path to recovery.
Without workers’ compensation, the cost of a work-related injured or ill employee’s medical treatment could become the responsibility of the employer and their business.
Arizona mandates that nearly all employers, regardless of size, provide workers' compensation insurance coverage.
This broad coverage requirement encompasses a wide range of employers, from small businesses to large corporations.
While there are certain exemptions, such as domestic workers and specific agricultural laborers, these exceptions are the minority.
To ascertain your obligations as an employer or your eligibility as an employee, take a look at the Industrial Commission of Arizona (ICA) or seek legal counsel.
Arizona operates within the framework of a no-fault workers' compensation system. This means that employees do not bear the burden of proving employer negligence or fault in the event of a workplace injury.
Instead, employees are generally entitled to benefits if their injury or illness is job-related and occurred during the course of employment.
The penalties for failing to provide workers' compensation in Arizona could be significant.
The ICA can impose fines ranging from $1,000 to $10,000, depending on the severity and recurrence of violations.
But that's not all—the ICA can also take matters to court, seeking an injunction that could effectively shut down a seriously noncompliant employer's business. It's a powerful reminder of the importance of adhering to Arizona’s workers' compensation regulations.
Workers' compensation in Arizona covers employees who sustain work-related injuries or illnesses while performing their duties. This coverage includes medical treatment, wage replacement, and related benefits to support injured workers during their recovery.
Exemptions from workers’ compensation in Arizona may include, for example:
1. Independent contractors
2. Domestic home workers
Workers' compensation benefits are typically provided in exchange for injured employees waiving their right to sue their employer for negligence in most cases.
This trade-off is a fundamental aspect of the workers' compensation system, ensuring that employees receive timely benefits for workplace injuries while providing employers with some protection.
Arizona’s workers’ comp insurance provides three types of benefits for work injuries:
These benefits cover:
Several factors influence the cost of workers' compensation insurance in Arizona:
In the event of a work-related injury or illness, employees must promptly notify their employer and seek medical attention.
According to the Industrial Commission of Arizona’s website, employees and employers should take the following steps when suffering a work-related injury or illness.
Lost-time wages are paid at 66 ⅔% of your established average monthly wage. The average monthly wage is usually calculated on your earnings during the 30 days before your injury, although there are other methods for calculating the average monthly wage.
The maximum monthly wage for wage loss benefits in Arizona for 2024 is $5,663.04 for injuries sustained between January 1, 2024, to December 31, 2024.
The vast majority of employers in Arizona must carry workers' compensation insurance or qualify for self-insurance, depending on their size and industry. Compliance with these requirements is essential to protect both the employer and employees.
When selecting a workers' compensation insurance provider, consider factors such as the provider's experience in the industry, financial stability, coverage options, claims process, customer service, and cost.
We recommend requesting multiple quotes and comparing the offerings before deciding.
Covering your business and employees with a trusted insurance partner—like EverPeak—brings peace of mind so you can focus on your bottom line.
In Arizona, employers who fail to procure or sustain the appropriate workers' compensation are vulnerable to penalties for failing to provide workers' compensation for employees.
The ICA can impose fines ranging from $1,000 to $10,000, depending on the severity and recurrence of violations.
In most cases, employees in Arizona are barred from suing their employers for work-related injuries or illnesses. The workers' compensation system provides an exclusive remedy, meaning that employees typically cannot file a lawsuit against their employers. Instead, they must pursue a workers' compensation claim to receive benefits for their injuries or illnesses.
Generally, independent contractors aren’t covered by workers' compensation insurance in Arizona.
Workers' compensation laws typically apply to employees rather than independent contractors.
However, it's important to note that the classification of a worker as an independent contractor or an employee can be complex, and misclassification can lead to legal disputes. If you’re unsure about your classification, we recommend seeking legal guidance.
Ideally, the incident should be reported immediately or within a few days of the occurrence. Prompt reporting helps ensures the necessary steps are taken to initiate the workers' compensation claims process.
Employees can verify online if their employer has coverage through the state’s online search tool.