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Virginia Payroll And Workers' Compensation Rules

Virginia payroll professionals play an important role in workers' compensation administration. Payroll records provide critical wage and employee information used to administer workers' compensation claims, calculate benefits, support insurance audits, and document an employer's compliance with Virginia law.

Understanding Virginia workers' compensation rules is especially important for payroll professionals who maintain employee records, calculate wages, process payroll after workplace injuries, respond to workers' compensation claims, or provide payroll information to an employer's insurance carrier, third-party administrator, or claims administrator.

Virginia Payroll And Workers' Compensation Compliance Overview

At A Glance

• Virginia generally requires an employer that regularly employs three or more employees to carry workers' compensation coverage
• Part-time, seasonal, and temporary workers generally count when determining whether an employer has reached the coverage threshold
• Corporate officers and LLC managers generally count as employees for workers' compensation coverage purposes
• Employees of qualifying subcontractors may also need to be counted when determining whether a contractor is required to carry coverage
• Virginia employers can generally obtain coverage through a licensed commercial insurer, authorized self-insurance, a licensed group self-insurance association, or a registered professional employer organization
• Employees should report workplace injuries to their employer immediately and generally no later than 30 days after the injury
• Occupational diseases generally must be reported within 60 days after the disease is communicated to the employee
• A workers' compensation claim generally must be filed with the Virginia Workers' Compensation Commission within two years of the accident, subject to statutory exceptions
• For most occupational diseases, a claim generally must be filed within two years of the date the employee is told the disease is work-related and within five years of the last exposure, subject to statutory exceptions
• Virginia employers or their insurance carriers generally must report a workplace injury or death to the Commission within 10 days after the employer learns of it
• Virginia workers' compensation benefits can include medical benefits, temporary total disability, temporary partial disability, permanent partial disability, permanent total disability, vocational rehabilitation, cost-of-living adjustments, and death benefits
• Temporary total, permanent partial, and permanent total disability compensation is generally based on 66 2/3% of the employee's average weekly wage, subject to statutory limits
• Effective July 1, 2026, Virginia's workers' compensation weekly minimum compensation rate is $376.75 and the maximum is $1,507.01

Virginia Workers' Compensation Employer Requirements

Virginia generally requires employers that regularly employ three or more employees to maintain workers' compensation coverage. Virginia's definition of employee is broad and includes many part-time, seasonal, temporary, family, minor, and other workers.

Employers should carefully review employee classifications and applicable statutory provisions when determining whether workers' compensation coverage is required.

Virginia Workers' Compensation Insurance

Virginia employers required to carry workers' compensation coverage may generally obtain insurance through a licensed commercial insurer, become an authorized self-insurer, participate in a licensed group self-insurance association, or use a registered professional employer organization.

Employers should maintain documentation showing that appropriate workers' compensation coverage is active and should review coverage whenever the company's workforce, business activities, ownership, or subcontracting arrangements change.

Virginia Workers' Compensation Coverage For Multistate Employers

Employers operating in multiple states should review Virginia workers' compensation requirements whenever employees perform services in Virginia.

Multistate employers should coordinate Virginia coverage with their insurance carrier and determine whether their existing policy properly covers Virginia exposures.

Payroll departments should maintain accurate employee work-location records, particularly when employees travel to Virginia, relocate to Virginia, or regularly work in multiple states.

Virginia Workers' Compensation Coverage Requirements

• How Many Employees Trigger Workers' Compensation Coverage In Virginia?: Virginia generally requires an employer that regularly employs more than two employees to carry workers' compensation coverage. In practical terms, an employer with three or more employees generally must maintain coverage. Virginia counts employees broadly for this purpose. Part-time, seasonal, temporary, and other qualifying workers can count toward the coverage threshold. Employees of certain subcontractors must also be counted when a contractor hires subcontractors to perform work in the same trade, business, or occupation or to fulfill a contract.
• Are Part-Time Employees Covered?: Yes. Virginia generally includes part-time employees within the definition of employee for workers' compensation purposes. An employer should not assume that a part-time schedule removes an employee from workers' compensation coverage or from the employee count used to determine whether coverage is mandatory.
• Are Seasonal Employees Covered?: Seasonal employees are generally included within Virginia's broad definition of employee. Employers should therefore consider seasonal workers when determining whether workers' compensation coverage is required and when administering a workers' compensation claim.
• Are Corporate Officers And Owners Covered?: Virginia generally treats corporate officers as employees for workers' compensation purposes. Executive officers can count toward the number of employees used to determine whether coverage is required. Employers should maintain accurate information concerning corporate officers, their positions, compensation, and workers' compensation status.
• Are LLC Members And Managers Covered?: Virginia's workers' compensation rules specifically address LLC managers and other business owners. LLC managers are generally included within Virginia's broad definition of employee. Employers should review the applicable statutory provisions when determining the treatment of LLC members, managers, and other owners.
• Are Sole Proprietors And Partners Covered?: Sole proprietors and partners may be treated differently from employees under Virginia workers' compensation law. Virginia does not provide or accept a waiver or exemption form for a sole proprietor or other business that is not required to carry coverage. Businesses may nevertheless purchase coverage voluntarily.
• Are Independent Contractors Covered?: Worker classification is important in Virginia workers' compensation administration. A business should not assume that calling a worker an independent contractor automatically eliminates workers' compensation obligations. Virginia considers factors including the right to hire, power to dismiss, obligation to pay wages, and, most importantly, the power to control the means and methods of the work when distinguishing employees from independent contractors.
• Virginia Statutory Employer And Subcontractor Rules: Virginia's statutory employer provisions can make a contractor responsible for workers' compensation coverage involving employees of certain subcontractors. A contractor should therefore determine whether subcontractor employees must be included when calculating the number of employees for coverage purposes. Contractors should also request and maintain proof of workers' compensation coverage from subcontractors and make those records available for insurance audits when appropriate.

Virginia Workers' Compensation Injury Reporting

• Employee Notice Of Injury: Employees should report workplace injuries to their employer immediately. Virginia generally requires an employee to report an injury within 30 days after the injury. Occupational diseases generally have a separate 60-day notice period after the disease is communicated to the employee.
• Virginia Employer Report Of Injury: Once an employer learns of a workplace injury or death, the employer or its insurance carrier generally must report the incident to the Virginia Workers' Compensation Commission within 10 days. Employers should establish an internal procedure that promptly routes workplace injury information to the appropriate HR, safety, insurance, and claims personnel. Employers should maintain documentation of the incident, including the employee's identity, date and time, location, nature of the injury, witnesses, job duties, medical treatment, and other information necessary to administer the claim.
• Virginia Workers' Compensation Claim Process: After an injury is reported, the employer should notify its workers' compensation insurer or claims administrator and complete the required reporting process. Payroll may be asked to provide wage records, employment information, dates of absence, and post-injury earnings to support administration of the claim. The Virginia Workers' Compensation Commission administers the Commonwealth's workers' compensation system and resolves disputes involving benefits, compensability, medical treatment, disability, and other matters.
• Employee Notice Of Injury: Virginia generally requires employees to report workplace injuries to their employer immediately and no later than 30 days after the injury. Failure to provide timely notice can jeopardize an employee's right to workers' compensation benefits. Employees should report injuries as soon as they occur rather than waiting until the end of the statutory notice period.
• Virginia Workers' Compensation Claim Filing Deadline: Virginia generally requires an injured worker to file a claim with the Virginia Workers' Compensation Commission within two years of the date of the accident. For most occupational diseases, a claim generally must be filed within two years of the date the employee is told that the disease is work-related and within five years of the date of last exposure, subject to statutory exceptions. Employers should not assume that voluntary payment of medical expenses or lost wages eliminates the employee's obligation to file a claim with the Commission.

Payroll Records That May Be Needed

• Employee name and identification information
• Date of hire
• Date of injury
• Employment status
• Job title and occupation
• Work location
• Regular wages
• Hourly rate
• Hours worked
• Overtime
• Bonuses
• Commissions
• Gratuities
• Wage increases and decreases
• Pre-injury earnings
• Post-injury earnings
• Modified-duty wages
• Salary continuation payments
• Periods of absence
• Other compensation information relevant to the claim

How Virginia Payroll And Workers' Compensation Work Together

Workers' compensation and payroll are closely connected. When an employee is injured at work, payroll may need to provide historical earnings, employment information, hours worked, wage changes, and post-injury earnings.

Payroll may also become involved when an injured employee:

• Misses work because of a workplace injury
• Returns to work with medical restrictions
• Works reduced hours
• Performs modified or light-duty work
• Receives wages after returning to work
• Receives salary continuation
• Experiences a change in compensation following an injury

For these reasons, Virginia payroll departments should have a documented procedure for responding to workers' compensation claims and producing historical payroll information.

Virginia Workers' Compensation Benefit Calculations

• Benefit Calculations: Virginia workers' compensation benefits depend on the nature and extent of the employee's disability or impairment, average weekly wage, medical findings, and other statutory requirements. Benefits can include medical treatment, temporary total disability, temporary partial disability, permanent partial disability, permanent total disability, vocational rehabilitation, cost-of-living adjustments, and death benefits. Payroll professionals should provide complete and accurate wage information to the employer's insurer, self-insurance program, or claims administrator rather than independently determining the final workers' compensation benefit.
• Average Weekly Wage: Virginia generally calculates the average weekly wage using earnings during the applicable period preceding the accident. The applicable calculation can vary depending on the employee's compensation arrangement and work history. Payroll should provide complete historical wage information to the claims administrator so that the applicable statutory calculation can be made.
• Temporary Total Disability Benefits: Virginia workers' compensation provides temporary total disability benefits for qualifying employees who are unable to work because of a compensable workplace injury. The compensation rate for temporary total disability is generally 66 2/3% of the average weekly wage, subject to Virginia's statutory minimum and maximum rates and other applicable limitations. Effective July 1, 2026, Virginia's weekly minimum compensation rate is $376.75 and the weekly maximum compensation rate is $1,507.01. Virginia also has a seven-day waiting period. Compensation is generally not payable for the first seven calendar days of incapacity, but if incapacity continues for more than 21 days, compensation can be payable from the first day of incapacity.
• Temporary Partial Disability Benefits: Temporary partial disability benefits may apply when an injured employee returns to work but has reduced earnings because of a compensable workplace injury. Virginia uses statutory requirements to determine eligibility and the amount of temporary partial disability benefits. Payroll records are particularly important in these cases because the claims administrator may need accurate information about post-injury wages and hours.
• Permanent Partial Disability Benefits: Virginia workers' compensation provides permanent partial disability benefits when a compensable injury results in qualifying permanent impairment or loss of use. The amount and duration of benefits depend on the affected body part, impairment, applicable statutory provisions, and other facts of the claim. Payroll does not generally determine the employee's medical impairment rating, but payroll records may be required to support benefit administration.
• Permanent Total Disability Benefits: Virginia provides permanent total disability benefits for qualifying catastrophic injuries meeting the requirements of the Virginia Workers' Compensation Act. The amount and duration of benefits depend on Virginia's statutory requirements and the circumstances of the employee's disability.
• Vocational Rehabilitation Benefits: Virginia workers' compensation can provide vocational rehabilitation services for qualifying injured employees who require assistance returning to suitable employment. Payroll and HR may need to coordinate with the claims administrator, medical professionals, and vocational rehabilitation professionals when an employee participates in a return-to-work or retraining program.
• Death Benefits: Virginia workers' compensation provides benefits to qualifying dependents when an employee dies as a result of a compensable workplace injury. Death benefits can include wage-loss benefits for qualifying dependents, funeral expenses, and transportation expenses subject to statutory limits. Virginia's current guidance provides for funeral expenses up to $10,000 and transportation expenses up to $1,000.

Virginia Workers' Compensation Medical Care

Virginia workers' compensation provides medical benefits for reasonable, necessary, and authorized treatment related to a compensable workplace injury or occupational disease.

Medical benefits can include appropriate physician services, hospital care, medication, medical supplies, rehabilitation, and other authorized treatment.

Virginia Medical Treatment And Workers' Compensation

Payroll generally does not administer medical treatment. However, payroll may need to coordinate with HR, management, the employee, and the workers' compensation claims administrator when medical restrictions affect work status, hours, wages, or return-to-work plans.

Virginia employers should provide injured employees with a list of at least three medical providers from which to choose treatment, subject to applicable workers' compensation rules.

Virginia Workers' Compensation And Modified Duty

An injured employee may return to work with restrictions or modified duties depending on the employee's medical status.

When this occurs, payroll should coordinate with HR, management, the employee's supervisor, and the workers' compensation administrator.

Payroll should document:

• The date the employee returned to work
• Hours worked
• Wages earned
• Changes in job duties
• Modified or light-duty assignments
• Changes in compensation
• Salary continuation
• Periods of absence
• Work restrictions
• Other payments related to the employee's workers' compensation status

Accurate post-injury wage information can be particularly important when determining temporary partial disability benefits or documenting an employee's return to work.

Virginia Workers' Compensation And Employee Classifications

Employee classification is an important component of workers' compensation administration.

Payroll should maintain accurate information about:

• Job titles
• Departments
• Work locations
• Job duties
• Employee status
• Compensation
• Employment dates
• Changes in duties or work assignments
• Ownership status when relevant
• Workers' compensation exemption or election status

When an employee's duties, ownership status, or employment classification changes substantially, payroll and HR should communicate the change to the appropriate workers' compensation or insurance personnel.

Payroll Training Resources

Payroll professionals responsible for workers' compensation administration should understand how workers' compensation rules interact with payroll records, wage calculations, employee classifications, injury reporting, benefits, and return-to-work procedures.

Payroll Training Center provides payroll education and training for professionals responsible for payroll compliance, wage administration, employee records, and related employment requirements.

Recommended Workers' Compensation Training

• How Workers' Compensation Works
  Learn the fundamentals of workers' compensation, including claims, benefits, employer responsibilities, and return-to-work considerations.


• Workers' Comp Premium Control: Experience Mods, Classifications, and Audit Mastery
  Develop a stronger understanding of workers' compensation classifications, experience modification factors, premium management, and insurance audits.


• Workers' Comp Workers' Recovery Professional Associate Certification
  Build specialized knowledge for professionals involved in workers' compensation and employee recovery.

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