Vermont Workers’ Comp Exemption
We file workers’ compensation exemptions for Vermont 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 Vermont
Vermont requires an employer to carry workers' compensation coverage if it hires one or more employees, full or part time, in Vermont (or hires people outside the state who work in Vermont) -- there is no minimum employee-count threshold. Failure to provide coverage can trigger daily penalties ($50/day up to $5,000 before notice, $150/day after notice) and, in extreme cases, a state order closing the business.
Who can be excluded in Vermont
Sole proprietors
If you are the sole proprietor of an unincorporated business, you are not covered and not required to have coverage, but you may choose to have it added to your policy.
Partners
Same as sole proprietors: a partner in an unincorporated business is not covered and not required to have coverage, but may elect it.
LLC members
Per the Vermont Department of Labor's Form 29, an LLC may exclude up to four (4) managers or members from Workers' Compensation Act protection (the same 4-person cap that applies to corporate officers), and an LLC with no other workers can be wholly excluded once all of its managers/members are excluded.
Corporate officers
Unlike sole proprietors/partners, corporate officers ARE covered by default ('Generally, everyone -- including officers of corporations -- is covered,' per the Vermont DOL business owners' guide). An officer may choose to be excluded, but must obtain PRIOR APPROVAL from the Vermont Department of Labor. Vermont law caps this at up to four (4) officers or members excluded per corporation/LLC (Officer/Member Exclusion on Form 29); corporate officer for this purpose means President, Vice President, Secretary, Clerk, or Treasurer. A corporation may be wholly excluded from coverage requirements when all of its officers are excluded and it has no other workers.
Construction rules in Vermont
No construction-specific exemption or threshold was found in the sources reviewed (the general 1-or-more-employee coverage rule and the Form 29 officer/member exclusion process appear to apply uniformly across industries). Note the Department of Labor's own guide flags construction only as a 'high hazard industry' eligible for free VOSHA safety consultations, not as having different coverage/exemption rules.
How the exemption is filed
Officer/LLC-member exclusion requires filing Form 29, 'Application To Exclude Corporate Officers or LLC Members From Workers' Compensation Coverage,' with the Vermont Department of Labor (PO Box 488, Montpelier, VT 05601-0488). The application requires a NOTARIZED copy of board-of-directors meeting minutes showing (1) the applicant was elected an officer/manager/member and (2) the directors approved the exclusion. A separate Form 29 must be filed for each officer/member being excluded, and for a full corporation/LLC exclusion. The exclusion takes effect no earlier than the date the Commissioner receives a complete application, and requires the Commissioner's approval (not automatic on filing). No fee was stated on the form. Sole proprietors/partners do not file anything to go without coverage; they instead arrange with their insurance agent to be added if they want coverage.
- Statute
- 21 V.S.A. § 601 (definitions; sole proprietor/partner and corporate officer/LLC exclusions)
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
Form 29 (rev. 2/13) was fetched directly and is the primary source for the 4-officer/member cap and the notarized-minutes filing requirement. The Department of Labor's 'A Guide for Vermont Business Owners' PDF used for the general coverage-requirement and default-coverage-of-officers language is dated 'Updated April 2006' -- it is an official DOL publication but is old; the core exclusion mechanics it describes are corroborated by the more recent Form 29 and by 21 V.S.A. § 601 statute summaries, so confidence remains high, but a current phone check with VT DOL (802-828-2286) is worthwhile before publishing fee/dollar figures from the 2006 guide (e.g., minimum premiums, penalty amounts) since those could have changed.
Sources
- https://aoa.vermont.gov/sites/aoa/files/Form%2029%20%20Application%20for%20Exclusion%20from%20Provisions%20of%20the%20Workers%20Comp%20Act%20rev%202-13.pdf
- https://labor.vermont.gov/sites/labor/files/doc_library/A-Guide-for-Vermont-Business-Owners.pdf
- https://law.justia.com/codes/vermont/title-21/chapter-9/section-601/
Source material dated Form 29 rev. 2/13; DOL business owners' guide updated April 2006; retrieved 2026-08-30. Compiled from official Vermont sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with Vermont Department of Labor, Workers' Compensation Program or ask us and we’ll check it for you.
Workers' comp exemption filing in Vermont
Tell us about your Vermont business and we'll confirm whether you qualify for an exemption.