Employers Who “Usually” Employ 3 or More Employees: the Threshold for Mandatory Worker’s Compensation in Wisconsin

by Ruder Ware

In general (i.e. non-farm) employment, Wisconsin’s Worker’s Compensation Act becomes mandatory for employers under either of two circumstances.  In the event such an employer pays $500 in wages during any calendar quarter, worker’s compensation becomes mandatory on the 10th day of the next quarter.  That’s a “bright line” rule.  Alternatively, worker’s compensation becomes mandatory when the employer “usually” employs three or more employees during a calendar quarter (irrespective of the total amount of wages paid) which also becomes effective on the 10th day following that quarter.  This alternative threshold criterion is much less clear because the Worker’s Compensation Act does not define the term “usually.” 

So what does the term “usually” mean for the small business that once in a blue moon hires one, two, or three people for a small amount of work for which it pays very small wages?  The Wisconsin Court of Appeals interpreted the meaning of “usually” in this context in Noyce v. Aggressive Metals, Inc., 2016 WL 4016088 issued on July 28, 2016.  The facts on which the Noyce case was based were straight-forward.  The employer, Aggressive Metals, offered on December 27, 2010, one week’s worth of work to Noyce to install insulation in its building.  Aggressive Metals had been in business for only about 10 months and had only two employees, Neil and Nick Holland, brothers who owned the corporation.  Noyce performed the installation work and suffered  a serious injury when he fell through a ceiling on the last day of his employment, January 4, 2011.

The work had begun before December 31, 2010, which meant that as of the fourth quarter in 2010, Aggressive Metals had in its employment three employees (the Holland brothers and Noyce).  Presumably, any wages paid for services during that quarter did not equal or exceed the sum of $500.  Under the Worker’s Compensation Act, worker’s compensation would become mandatory on January 10, 2011, i.e. the 10th day in the next succeeding quarter, i.e. the first quarter of 2011.  Noyce sought coverage under the Act for his injuries.  Noyce argued that a case decided by the Wisconsin Supreme Court in 1947 was binding precedent, but the court of appeals pointed out that the current version of the Worker’s Compensation Act on this very point had been amended by the legislature after the 1947 case.

It still remained, however, for the court of appeals to interpret the meaning of “usually” because the legislature did not define that term in the statute.  The court of appeals did what courts do in that circumstance – consulted a well-recognized dictionary.  The court of appeals relied on Black’s Law Dictionary (10th ed.2014) (“ordinary; customary”) and Webster’s Third New International Dictionary ( (1) “by or according to habit or custom” and (2) “more often than not”).  The court of appeals noted that Aggressive Metals had been in business for only 10 months during which period it had only two employees until it offered “limited, short-term work” to a third employee.  Under this circumstance, Aggressive Metals was held not to have “ordinarily, customarily, or habitually employ three employees at the time Noyce was injured.”  And having a third employee “for a few days” did not suffice to meet the “more often than not” definition of “usually.”

Noyce was not alone in seeking worker’s compensation benefits; his claim was supported by the Department of Workforce Development Uninsured Employers Fund (“UEF”).  Evidently, Aggressive Metals had not purchased a worker’s compensation policy on a voluntary basis.  Why might a start up business have done so?  Because if the UEF is required to pay worker’s compensation benefits (which in this case it did not have to do), it must seek reimbursement from the uninsured employer.  Moreover, individual owners of a corporation are not shielded from liability to the UEF, and the standard personal exemptions in bankruptcy are not applicable as against the UEF.  Uninsured employers who are found to be required to have mandatory worker’s compensation may face serious and unappreciated, financial risk.  Even start up companies on a tight budget should strongly consider obtaining a worker’s compensation policy on a voluntary basis.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ruder Ware | Attorney Advertising

Written by:

Ruder Ware

Ruder Ware on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.