If you are a business owner in Florida, it is important that you have workers' compensation insurance. After all, employers and workers are always at risk of injuries at work, and it's much more affordable to pay for insurance premiums than to pay millions for medical care and legal fees out of your own pocket.
However, there are cases where employees may be exempt from receiving workers' compensation. To learn more about the Florida workers' comp exemption, check out what it is, who needs it, how it works, and who’s eligible for the compensation.
What Is The Florida Workers' Compensation Exemption?
The Florida workers' compensation laws require most businesses to have workers' compensation coverage. However, there is a way for a company to apply for a workers' comp exemption, especially for certain types of workers.
The Florida Department of Financial Services, Division of Workers’ Compensation (DWC), enforces and monitors the exemptions from workers' compensation. Ultimately, after a company applies for consideration, they will determine whether a worker has a lower risk of sustaining injuries while on the job and decide that coverage is unnecessary for the nature of their work.
Who Needs Florida Workers' Compensation?
Before diving into what makes an employee exempt from these benefits, it's important to look at who is required to have workers' compensation.
According to Florida workers’ compensation law, businesses with at least four employees must obtain a workers' compensation policy as protection against work-related injuries. However, the extent of the coverage is still dependent on the industry, the size of the company, and the types of employees.
For instance, workers' comp policies are essential for companies in the:
- Construction industry with at least one employee, including officers of the corporation
- Non-Construction industries with at least four workers
- Agricultural industry with at least six full-time employees or 12 temporary workers that work more than 30 days in one season or 45 days in a calendar year
How Does Florida Workers' Compensation Work?
Worker's compensation insurance helps pay for a work-related injury or illness that an employee acquires within the company’s premises. It covers medical expenses, including care and treatments like physical therapy.
Workers' compensation will also cover lost wages during the recovery period of the injured workers. Should the injury result in a permanent disability for the employee and they lose the ability to return to work, workers' comp will ensure that the employee will be paid.
In Florida, the cost of workers' comp insurance is calculated using this formula: Workers’ Classification Code Rate x Experience Modification Number X (Payroll/$100) = Premium.
If you want to learn more about how this works, especially when it comes to filing a claim, you can coordinate with a workers' compensation lawyer or insurance provider.
Who Is Eligible For The Florida Workers' Compensation Exemption?
Workers' compensation exemption is possible in Florida, especially for officers, owners, and upper management employees who are not really exposed to risks. However, the exemption from workers' compensation benefits depends on numerous factors, including the size and classification of your company based on ownership.
Exemption For A Sole Proprietorship
If you are a sole proprietor, you don't have to create an application for exemption. Technically, a business owner is not considered an employee, so they will automatically be excluded by the insurance company.
However, if you are a sole proprietor who wishes to be covered, you can file the DWC 251 Election of Coverage to opt-in. If the time comes that you want to be excluded from the benefits, you can submit a DWC 251-R form.
Exemption For A Partnership
Like in a sole proprietorship, partners are not considered employees and will not be covered by workers' comp if a work injury occurs.
However, if the partnership is in the construction industry, Florida recognizes partners as employees, and they will not be eligible for exemption.
Exemption For LLCs And Corporations
If your business is registered as an LLC, your worker's comp policy will include all members, officers, and employees. An officer may choose to be exempted and reject the benefits, but they must meet these requirements:
- The applicant for exemption must own at least 10% of the company
- The applicant must not be linked with a Stop Work Order or Working in Violation
- The company must be registered in the Florida Department of State Division of Corporations
- The business must pay the $50 exemption application fee
However, the exemption will only be extended to three officers or members if the company is in the construction industry.
Final Thoughts: Is Florida Workers' Compensation Exemption Needed?
Florida workers' compensation can help an employer and their employees stay protected in the event of work-related injuries. It can supplement medical expenses, income, funeral expenses, and much more that can be costly when taken out of pocket. Though exemptions are possible, getting workers' comp coverage is still the best way to protect your company and workers.
If you want to learn more about workers' comp, check out Disability Help's guide to four types of workers' compensation benefits.
