New Mexico Workers’ Comp Exemption
We file workers’ compensation exemptions for New Mexico sole proprietors, LLC members, and corporate officers. Send us your details and we’ll confirm whether you qualify and handle the filing.
When coverage is required in New Mexico
Coverage is mandatory once an employer regularly has three (3) or more workers; part-time, seasonal workers and paid family members count toward that threshold. Exception: businesses engaged in activities requiring licensure under the Construction Industries Licensing Act must carry coverage regardless of employee count -- the 3-employee threshold does not apply to them.
Who can be excluded in New Mexico
Sole proprietors
A sole proprietor is treated, along with certain owner-executives, as within the reach of NMSA 1978 Section 52-1-7 ('executive employees or sole proprietors'). The mechanism is an affirmative election: a sole proprietor may file an election with the WCA director NOT to accept the provisions of the Workers' Compensation Act, which creates a presumption of non-coverage until revoked. I could not confirm from the official FAQ page whether sole proprietors are excluded by default absent any filing, or whether the affirmative-election filing is what accomplishes the exclusion -- the statute section title implies the filing is the operative act. Confirm exact default status with WCA before publishing as an absolute.
LLC members
LLC members qualify as 'executive employees' under NMSA 1978 Section 52-1-7 if they hold a 10%+ ownership interest in the LLC. As executive employees they may file the same affirmative election not to accept the Act. They are still counted toward the 3-employee coverage threshold even if excluded.
Corporate officers
Officers (chairman of the board, president, vice president, secretary, treasurer, or other executive officer) qualify as 'executive employees' under NMSA 1978 Section 52-1-7 only if they own 10%+ of the corporation's outstanding stock. Qualifying officers may file an affirmative election not to accept the Workers' Compensation Act. They still count toward the 3-employee threshold even if excluded. I found a secondary-source (non-official) claim of a 'maximum 3 officers per corporation' cap on this exclusion but could NOT verify it against the statute text or an official WCA page -- do not publish that cap as fact.
Construction rules in New Mexico
Construction businesses engaged in activities requiring licensure under the Construction Industries Licensing Act must carry workers' compensation coverage regardless of the number of employees (the general 3-employee threshold is removed for this industry). Executive employees/sole proprietors meeting the 10% ownership test may still file the affirmative election described above even in construction.
How the exemption is filed
There IS a state-level filing: an 'affirmative election' not to accept the Workers' Compensation Act, filed with the New Mexico Workers' Compensation Administration (WCA) director by a qualifying executive employee or sole proprietor. I located what appears to be the WCA's own election document at the URL below, but could not extract its text (binary PDF), so I cannot confirm the exact form title, any fee, or duration from the document itself.
- Form
- No state exemption form — see above
- Statute
- NMSA 1978 Section 52-1-7 (application of the Act to certain executive employees or sole proprietors); general employer-coverage threshold referenced on the WCA FAQ page (NMSA 1978 Section 52-1-2 area, not independently confirmed by section number)
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
Regime type: default-in-then-elect-out for qualifying owners/officers (not a state exemption certificate registry in the usual sense, but there IS a real state filing -- an affirmative election -- which is unusual compared to states that only use a carrier-level endorsement). The 3-employee general threshold is REMOVED for construction industry employers per the Construction Industries Licensing Act. Could not verify: exact form title/fee/duration (PDF unreadable), general-partner treatment, and the 'max 3 officers excluded' claim seen only on non-official sites.
Sources
- https://www.workerscomp.nm.gov/faqs/
- https://www.workerscomp.nm.gov/wp-content/uploads/2025/04/executive_employee_affirmative.pdf
- https://www.nmlegis.gov/sessions/03%20Regular/FinalVersions/SB0646.html
Source material dated WCA FAQ page undated (accessed 2026-08-30); executive-employee election PDF path dated April 2025. Compiled from official New Mexico sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with New Mexico Workers' Compensation Administration (WCA) or ask us and we’ll check it for you.
Workers' comp exemption filing in New Mexico
Tell us about your New Mexico business and we'll confirm whether you qualify for an exemption.