New Mexico Workers’ Compensation

You can save up to 25% in discounts on business insurance.*

What can be covered by New Mexico Workers’ Compensation insurance?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.


To teach injured employees new skills if they can no longer do their jobs.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

Is New Mexico Workers’ Compensation insurance required?

Workers’ compensation insurance is required for all businesses in New Mexico with three or more employees. This requirement applies whether the workers are residents or non-residents of New Mexico.

Part-time, seasonal and temporary workers are all counted as employees, according to New Mexico workers’ compensation laws. The coverage requirements also apply to agricultural employers and nonprofit, charitable and religious organizations.

Additionally, all employees engaged in construction in New Mexico must have coverage, even if the employer has fewer than three employees total.

New Mexico workers’ comp requirements are not enforced on tribal lands within the state, although tribes may voluntarily enforce the requirement.

Businesses operating on a Native American reservation or pueblo must follow the guidelines of that tribe.

In addition to obtaining the required workers’ comp insurance, New Mexico employers are required to:

  • Pay a workers’ compensation assessment fee to the New Mexico Taxation and Revenue Department.
  • Display the Workers’ Compensation Act poster in a conspicuous location where employees will have access to it.
  • Provide Notice of Accident forms attached or adjacent to the Workers’ Compensation Act poster.
  • Maintain a safe workplace and, if the employer’s workers’ comp insurance premium is $15,000 or more, comply with specific safety program requirements.

Businesses with less than three employees can opt out of workers’ comp. But as an employer, you can still be held responsible for expenses if an employee gets hurt or ill on the job. For example, an injured employee could file a liability lawsuit against an employer without any defined limits on the damage award.

If an employee is injured on the job, a New Mexico workers’ comp policy can help cover the following expenses:

Voluntary business owners coverage is also available for employers.

How does Workers’ Comp work in New Mexico?

The expenses that accrue as a result of a work-related injury or illness could be covered by workers’ compensation New Mexico. This could include:

  • Medical care
  • Travel costs for medical appointments
  • Wage loss
  • Permanent impairment
  • Death benefits

New Mexico offers five indemnity benefits to compensate for wage loss and/or functional impairment:

Temporary total disability: The employee is unable to work temporarily due to their injury.

Temporary partial disability: The employee is still able to work in some capacity, but at a reduced wage or fewer hours per week.

Permanent total disability: The employee suffers a severe, permanent injury, such as total loss of use of both hands or eyes.

Scheduled injury: The employee suffers the loss of use of a specific body part.

Whole body impairment: The employee suffers an injury to the body, with benefits determined by their ability to return to work and other factors.

If an employee dies as a result of a work-related injury or illness, death or survivor benefits could be paid to their dependents. Funeral benefits of up to $7,500 may be paid as well.

If an out-of-state employer has an employee working in New Mexico, they can get an insurance endorsement from their insurance carrier to cover accidents that occur within the state — as long as that carrier is also licensed in New Mexico.

If that’s not an option, they must obtain a separate New Mexico policy.

Learn more about workers’ compensation coverage.

How much is New Mexico Workers’ Comp?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do
  • Your total payroll
  • Your insurance claims history
  • The locations where you do business

The best way to determine the insurance rate for your business is to get a free instant quote from NEXT.

What if you don’t have Workers’ Compensation in New Mexico?

Employers can face penalties if they fail to comply with the state’s requirements for workers’ compensation insurance. Some examples include:

  • Fines for failing to carry the required workers’ comp coverage.
  • Being forced to cease business operations until coverage is obtained.
  • Fines for failing to comply with poster requirements in the workplace.
  • Civil penalties up to $10,000 for firing a worker or retaliating in any way due to a workers’ compensation claim being filed.

Who is exempt from New Mexico Workers’ Compensation insurance?

New Mexico employers do not need to provide coverage for the following employees:

  • Domestic servants.
  • Real estate salespeople.
  • Federal employees covered by the Federal Employees’ Compensation Act or other federal programs.

When determining the total number of employees in a business, the owner is included if they work in the business.

Executive employees or sole proprietors may opt out of coverage, but they’re still counted in the number of workers for the business.

If you’re a sole proprietor who wishes to be exempt from workers’ comp coverage requirements, you must have your exemption approved by the WCA Compliance Bureau.

Construction corporations, partnerships and LLCs must all have coverage, even if there is only one executive employee. Those who wish to minimize expenses for premiums may elect to forgo coverage for executive employees by filing an Executive Employee Affirmative Action Election form with their insurance carrier.

Employers who prefer to self-insure their business rather than obtaining coverage from an insurance carrier may apply to the WCA Compliance Bureau to receive written approval.

These employers may apply individually or as part of a group of employers in the same or similar industry.

Requirements for self-insurance approval in New Mexico include:

  • A net worth of at least $2.5 million.
  • A business in operation for at least three years.
  • A strong trend of financial health and solvency.
  • A risk management program in place.
  • Acceptable policy of excess insurance.
  • Approved letter of credit or surety bond.
  • Audited financial statements.

How NEXT helps New Mexico small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

Start a free instant quote with NEXT.

Other business insurance policies that are important in New Mexico

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many New Mexico small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

In New Mexico, all business-owned vehicles must be covered by commercial auto insurance. If you drive or use your personal vehicle for work, commercial auto insurance helps protect your business from accidents.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance

Professional liability insurance, also called errors & omissions insurance, provides financial protection against claims of professional mistakes and negligence.

More resources for small business owners

Get customized insurance in New Mexico

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.