Q. My wife and I have been handling all the duties in our store, but lately we have been thinking about hiring an employee to help out. Will we have to take out a workers' compensation insurance policy if we hire someone?

A. That depends on whether you hire a full-time or a part-time worker. Businesses with one full-time employee or three part-time employees are required to have workers’ compensation insurance.

If you hire one or two part-time employees, keep in mind that although you are not required to have work comp insurance, you are still liable for any injury those employees may suffer on the job. So it’s in your best interests to secure workers’ compensation coverage regardless of the three-employee minimum. Otherwise an employee could sue you if injured at work.

If your business is a sole proprietorship, your wife is technically considered an employee. However, you can choose to exclude your spouse, children or parents from work comp coverage if they work for you. Partnerships may exclude named partners, and some corporations and limited liability companies may exclude certain management employees who hold ownership stake.

The Michigan Retailers Association operates a self-funded workers’ compensation program, Retailers Fund, for retail businesses. Retailers Fund offers competitive rates with up-front premium discounts and has paid cash-back dividends to participants every year since 1982.

Do you have a retailing question? Ask the Michigan Retailers Association in writing—by mail, 603 South Washington Avenue, Lansing, MI 48933; by fax, 517.372.1303; by e-mail, mra@retailers.com.