Workers comp for a cleaning business: state thresholds, class codes, cost and ghost policies

Does a cleaning business need workers comp?

Yes in nearly every state once you have employees, and the trigger point is the number of people you employ, not your revenue. A solo cleaner with no staff generally does not need it (though clients may ask for proof anyway); a company with three or more cleaners needs it almost everywhere.

The thresholds below come from each state’s workers’ compensation agency. They are a sample, not a complete list, and they change; check your own state’s agency before you hire. Part-time cleaners usually count as employees.

Even where the law does not reach you yet, contracts do. Property managers and public bids routinely require proof of workers’ compensation from every vendor, which is why a one-person cleaning company sometimes buys a policy before it hires. The cleaning business insurance guide covers the other policies clients ask for. This page is general information, not legal or insurance advice.

What does workers’ compensation pay for?

Workers’ compensation pays the medical bills and part of the lost wages of an employee hurt or made ill by the job, regardless of fault, and in exchange the employee generally cannot sue you for the injury. The policy also carries employer’s liability coverage for the lawsuits that are still allowed.

Cleaning injuries are ordinary and frequent: a back strained moving a couch, a knee twisted on wet tile, a chemical splash in the eye, a fall from a step stool, a hand cut on broken glass in a trash bag. None of these is covered by general liability, which pays only for injuries to people who are not your employees. Without workers’ comp the bill is yours, and in most states so is a penalty.

Texas spells out the trade-off on its employer resources page: a policy provides lost wages and medical benefits to injured employees and, except when gross negligence results in a fatality, limits liability if an employee sues the business. Employers there that choose not to carry it must tell their employees and register as non-subscribers with the state.

What are class codes 9014 and 9015, and why do they matter?

Class codes are the job categories insurers use to price workers’ compensation, and the rate for each code is quoted per $100 of payroll. In the states that use the National Council on Compensation Insurance (NCCI) system, janitorial and cleaning payroll is usually placed under code 9014 (janitorial services by contractors, no window cleaning above ground level, which is what an outside cleaning company does) or 9015 (buildings operated by the owner, lessee or a real estate management firm, which fits in-house building staff). Some states still use older titles for the same codes.

Insureon’s workers’ comp cost page explains the mechanics: NCCI developed the classification codes, each code carries a rate, with riskier work rated higher, every employee is assigned a code for the work they do, and insurers apply the rate per $100 of payroll. NCCI’s own class lookup requires an NCCI account, so ask your agent or your state’s rating bureau for the exact description and current rate, and confirm the code in writing, because the description and the number both matter at audit.

States that do not use NCCI codes

A few states run their own systems. Washington is the clearest example: it is a state fund, it rates by hours worked instead of payroll, and its 2026 rate table lists class 6602, Janitorial Services and Pest Control, at a composite base rate of $1.6799 per hour worked, up 4% from $1.6098 in 2025, across 2,429 full-time equivalents in the class (Washington L&I 2026 base rates by class). California uses its own rating bureau and codes as well. If you are in one of those states, ask the agency for its janitorial class rather than quoting 9014.

Why the code matters to you

• Office staff, a scheduler or a salesperson belong in a clerical or sales code with a much lower rate; do not let their payroll ride in 9014.
• Window cleaning above ground level (9014 excludes it by name), pressure washing and post-construction cleanup may be rated under different, higher codes.
• At year end the insurer audits payroll by code; mixed or undocumented payroll gets pushed into the highest code.

How much does workers comp cost a cleaning company?

Janitorial companies pay a median of $114 a month for workers’ compensation through Insureon, and its carpet cleaning cost page puts carpet cleaners at about $117. Your own bill is payroll ÷ 100 × the class rate × your experience modifier, so it rises with every hire and every raise, and it falls with a clean claims record.

The $114 figure is from Insureon’s janitorial insurance cost page (updated September 3, 2026), the median for janitorial businesses that bought through Insureon, most with fewer than five employees. Across all industries Insureon’s small business customers pay a median of $54 a month, with state averages from $34 a month in Texas to $127 in Alabama, and $63 in California, $65 in Florida and $61 in Georgia. Those are all-industry numbers; cleaning sits above the all-industry median because the work is physical.

The formula, with a worked example (hypothetical rate)

1. Annual cleaner payroll: four part-time cleaners at $18 an hour, 25 hours a week, about $93,600 a year.
2. Assume your state’s janitorial class rate is $2.50 per $100 of payroll. Real rates vary widely by state and insurer; this is a round number for the math.
3. Base premium: $93,600 ÷ 100 × $2.50 = $2,340 a year.
4. Experience modifier 1.00 for a new business: premium stays $2,340, or $195 a month. A modifier of 0.85 after three claim-free years would cut it to about $1,990.
5. Add the insurer’s expense constant and any state assessments, typically a few hundred dollars.

Washington’s hourly system gives the same answer a different way: four cleaners working 5,200 hours a year × $1.6799 = about $8,735 before the employee-paid share and any experience adjustment, which shows how much rates differ between states.

What moves the premium

• Payroll and headcount, because premium is a rate on payroll.
• State: rates and assessments are set state by state.
• Class code mix: clerical payroll rated as janitorial overpays.
• Experience modifier: claims in the last three years raise it; Insureon notes a clean history earns discounts.
• Pay-as-you-go billing, offered by many carriers, charges each payroll run instead of estimating a year up front, which smooths cash flow and shrinks the audit bill.

Put the premium into your prices rather than absorbing it. The profit calculator shows what a $195 monthly premium does to margin, and the cleaner pay guide helps you set wages with the loaded cost in view.

What is a ghost policy, and should a solo cleaner buy one?

A ghost policy is a minimum-premium workers’ compensation policy for a business owner with no employees who must hand a client a certificate of insurance. It satisfies the paperwork; it does not insure anyone, including you.

Insureon’s ghost policy page describes it as designed exclusively for owners who do not have employees but must legally or contractually provide a COI, often contractors and subcontractors who are otherwise exempt. It warns that a ghost policy does not offer any real insurance coverage, that it is not available in every state or from every carrier, and that you still need the funds to cover your own work-related medical costs, since most personal health plans exclude injuries related to your job.

When it makes sense

• You clean alone, a property manager will not sign without a workers’ comp certificate, and your state exempts sole proprietors.
• You subcontract occasionally for a larger cleaning company that requires its subs to carry their own coverage.

When it does not

• You have, or will soon have, any employee. The policy will be audited and you will owe real premium on their payroll, or face penalties.
• You want coverage for your own injuries. Buy a real policy that includes the owner, or an occupational accident policy, instead.

Do 1099 cleaners count toward workers’ comp?

Often yes. States decide who is an employee by how the work is controlled, not by the tax form, and several count your contractors or their employees toward your threshold. Paying cleaners on a 1099 to avoid workers’ comp is one of the most common and most expensive mistakes in this industry.

• Virginia counts subcontractors’ employees when deciding whether you have more than two employees, and says coverage is required regardless of whether the subcontractor has its own policy (Virginia Workers’ Compensation Commission).
• Washington tells employers that if they have workers, whether employees or independent contractors, they might be required to provide coverage, and points them to its independent contractor test (L&I).
• North Carolina requires coverage for certain trucking owner-operators even when they are independent contractors, and warns that occupational accident insurance is not the same as workers’ compensation (Industrial Commission).

Insurers follow the same logic at audit: if you cannot show a certificate for a subcontractor, many carriers charge you premium on what you paid them, as if they were employees. If you use genuine subcontractors, collect their certificates of insurance before they start and keep them on file for the audit.

The classification question itself (schedules, training, supplies, exclusivity) is covered in the guide to W-2 or 1099 cleaners. If your cleaners look like employees under those tests, budget for workers’ comp now; the back premium and penalties after an injury are worse.

Can the owner be excluded, or included?

Usually both are possible, by state rule. Corporate officers and LLC members can often file an exemption to leave themselves out of the policy and the headcount; sole proprietors can often elect to be covered. Which is right depends on whether you clean alongside your crew.

Florida’s exemption page explains that officers of a corporation and members of an LLC may file a Notice of Election to be Exempt, after which they are not considered employees and cannot collect benefits; exemptions are issued to the person, not the business. North Carolina counts corporate officers toward its three-employee threshold but lets them exclude themselves from the policy. California’s FAQ notes a sole proprietor may buy a policy to cover only themselves, as long as the inclusion is clearly stated in the policy.

If you are on the mop yourself, think twice before exempting. Your health plan may exclude work injuries, and a lost month of your own labor is a lost month of revenue. If you only sell and schedule, an exemption lowers the premium honestly.

How do you buy workers’ comp and keep it affordable?

Buy before the first employee’s first shift, through a private carrier, a marketplace, or your state fund where one exists, and ask for pay-as-you-go billing tied to your payroll runs. Then keep the premium down the only way that works: fewer claims and clean payroll records.

1. Confirm your state’s rule and your entity type. Use the agency pages above or your own state’s equivalent, and decide whether to include or exempt yourself.
2. Get your class code right. Separate clerical and sales payroll from cleaning payroll in your payroll software from day one.
3. Quote at least two sources. Insureon places with several carriers; NEXT, The Hartford and many regional insurers sell direct. In the four monopolistic states (North Dakota, Ohio, Washington and Wyoming) you must buy from the state fund, and Insureon notes that state-fund coverage does not include employer’s liability, so ask about stop gap coverage there.
4. Ask for pay-as-you-go. Premium calculated on each actual payroll instead of an estimate avoids a large audit bill.
5. Keep certificates for every subcontractor, and the payroll report ready for the year-end audit.
6. Run a safety routine: lifting technique, wet-floor signs for your own crew, no mixing of chemicals, eye protection with sprays, and a written return-to-work plan so an injured cleaner comes back on light duty instead of staying on full wage replacement. Build it on the OSHA requirements for cleaning companies: HazCom, PPE and injury reporting.

Payroll software that tracks hours by cleaner makes the audit a report rather than a reconstruction. Broombook’s cleaning payroll software page explains how hours flow from the schedule to pay; see pricing for plans.