Wisconsin's Workers' Compensation Law Has Changed: What Business Owners Should Know

If you own a business in Wisconsin, there's an important update that deserves your attention.

Earlier this year, 2025 Wisconsin Act 145 took effect, bringing several changes to Wisconsin's workers' compensation system. While many of the updates affect how claims are handled behind the scenes, there are also changes that can impact employers, insurance companies, and injured workers.

For many business owners, workers' compensation is something that stays in the background until an employee is injured. But understanding how the system works—and staying informed when changes occur—can help your business avoid unnecessary complications down the road.

What Changed?

The legislation includes several updates, including:

• Increased permanent partial disability benefit rates for qualifying workplace injuries.
• Expanded workers' compensation coverage for post-traumatic stress disorder (PTSD) to include all emergency medical responders, EMS practitioners, and firefighters, regardless of whether they serve full-time or as volunteers.
• Stronger penalties for fraudulent workers' compensation insurance applications and the intentional misclassification of employees to reduce insurance premiums.
• Changes to how certain claims are filed, managed, and resolved through Wisconsin's Workers' Compensation Division.

While these changes may seem technical, they reinforce an important message: accurate records and proper workers' compensation coverage have never been more important.

Why Employee Classification Matters

One area receiving increased attention is employee classification.

Every business is different, and workers' compensation premiums are based on several factors, including payroll and the type of work employees perform. Intentionally misclassifying employees or reporting inaccurate payroll to reduce premiums can lead to significant penalties under the updated law.

Even honest mistakes can create problems if payroll records aren't kept up to date.

Maintaining accurate payroll records and making sure employees are classified correctly helps your policy reflect your actual business operations while reducing the likelihood of surprises during a workers' compensation audit.

Good Recordkeeping Makes a Difference

Good documentation has always been an important part of managing a business, and these updates reinforce that importance.

Keeping payroll records current, documenting job duties, reporting workplace injuries promptly, and communicating changes to your insurance company can all help the claims process move more smoothly if an injury occurs.

The goal isn't simply to comply with the law—it's to make sure your business is prepared if the unexpected happens.

Workers' Compensation Is More Than a Requirement

Many business owners think of workers' compensation as another expense of doing business.

In reality, it's designed to protect both employees and employers.

When an employee is injured on the job, workers' compensation can provide medical benefits and wage replacement while helping protect employers from many types of lawsuits related to workplace injuries. Having the right coverage in place allows businesses to focus on recovery and getting employees safely back to work.

Final Thoughts

Changes like Wisconsin Act 145 are a reminder that workers' compensation laws continue to evolve.

Whether you own a restaurant, retail store, farm, construction company, manufacturing business, or another small business, taking time to review your workers' compensation policy, payroll records, and employee classifications is a worthwhile investment.

Staying informed today can help your business avoid costly problems tomorrow, while ensuring your employees—and your business—have the protection they need when it matters most.