If you're running a staffing agency in Minnesota, you're not just in the business of connecting talent to opportunity — you're also responsible for protecting your workforce. That includes having the right workers' compensation insurance in place.
But how does Workers Comp Insurance for Staffing Agencies in Minnesota? Who is responsible when a temporary worker gets injured on the job? And how do Minnesota’s laws apply?
This blog breaks down everything staffing agencies in Minnesota need to know about workers comp insurance — from legal requirements to cost factors and tips for managing risk.
Why Staffing Agencies in Minnesota Need Workers Comp Insurance
Under Minnesota state law, every employer — including staffing agencies — is required to carry workers’ compensation insurance for their employees. This coverage protects workers by covering:
- Medical expenses
- Lost wages during recovery
- Rehabilitation services
- Death benefits in fatal cases
For staffing agencies, this requirement extends to temporary, part-time, seasonal, and contract workers, regardless of how short their placement is.
Important:
Even though your employees may be working on a client’s site, you (the staffing agency) are considered the employer in most cases — and are responsible for providing workers comp.
What Does Workers Comp Insurance Cover?
Here’s what’s typically included in a workers’ comp policy for staffing agencies:
- Injury or illness sustained on the job
- Repetitive strain injuries
- Slip and fall accidents
- Occupational illnesses from exposure to harmful substances
- Wage replacement during time off due to injury
- Permanent disability benefits
- Employer liability protection
This coverage ensures your employees are protected and also helps you avoid expensive lawsuits or government penalties.
Minnesota’s Workers Comp Requirements: At a Glance
- Required? Yes — mandatory for any business with employees.
- Governing Body: Minnesota Department of Labor and Industry (DLI)
- Exemptions? Very few. Most staffing agency roles (especially temp laborers) must be covered.
- Penalties for noncompliance: Civil fines, criminal charges, stop-work orders, and lawsuits.
How Much Does It Cost?
Workers comp insurance costs vary depending on several factors:
1. Job Classification
Each job is assigned a classification code with a corresponding rate. High-risk roles like warehouse laborers or construction temps will cost more than clerical or administrative placements.
Staffing Industry Challenges with Workers Comp
Staffing agencies face unique challenges when it comes to workers comp:
- Multiple work environments: You may not control the safety standards at client sites.
- Frequent turnover: High volumes of new hires increase risk exposure.
- High-risk industries: Construction, manufacturing, and healthcare staffing come with elevated claim risks.
That's why it's critical to work with an insurance provider who understands the staffing industry and can help you structure a policy that protects you properly.
What If You Can’t Get Coverage?
If your agency is new, has a poor claims history, or places high-risk workers, you might be placed in the Minnesota Assigned Risk Plan. While this is a safety net, it often comes with higher premiums and fewer options — so it’s better to qualify for the voluntary market if possible.
Final Thoughts
Workers comp insurance isn’t optional — it’s essential. As a staffing agency in Minnesota, you have a legal and ethical responsibility to protect your temporary employees on the job.
By understanding how workers comp works, what it covers, and how costs are calculated, you can make smarter decisions and reduce risks for your business.
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