Who is Exempt from Workers’ Compensation Coverage?
The workers’ compensation system provides no-fault coverage for a majority of workers across the United States. This arrangement will furnish some funds to replace lost wages and cover medical expenses for a covered worker from an occupational injury, disability or disease. This type of insurance is expensive to the employers because it is provided at no cost to the employee, even if the employer is required to offer it. Because of this, some companies may look for a method to reduce those costs. One such method is to claim that the workers are not entitled to the coverage.
Not every worker in America falls under the protection of workers’ compensation (workers’ comp) laws. You should know what your working status is as it relates to such protection. Thousands of workers suffer disabling injuries every day. If you are not entitled to workers’ comp, you may want to invest in some other form of coverage, for instance, private health insurance or disability coverage at your own cost before an accident happens.
Without workers’ compensation insurance, your only recourse as an employee is a civil suit against the employer. This is more difficult than filing a workers’ comp claim in that you must show that the employer was negligent. A civil suit goes through the court system, which is already backed up and takes significantly longer to settle. Because of these reasons, if you are really exempt, you are at a disadvantage if you suffer from a work injury or work associated disease.
Workers’ Compensation Exemption Policies Varies by State
Sometimes a company’s claim that workers are exempt is legitimate. State laws govern minimum requirements of when to provide workers’ compensation coverage, and these vary some from state to state. For example, some states only require employers with a set minimum number of employees to provide coverage. Another example is that the state may exempt workers in certain types of occupations.
Exemptions in a particular state can be based on how common a particular occupation is and how the government views them. For example, in California where there are a large number of seasonal agricultural workers, all are covered under their workers’ comp laws. However in Florida, an agricultural employer must have at least six regular workers or twelve seasonal workers before being required to have workers’ comp insurance.
Other general requirements for mandatory workers’ comp often include a minimum number of employees or a minimum amount earned by the worker. Usually, between three and five employees trigger the requirement for workers’ compensation insurance. Also, mandatory coverage could be based on the number of days worked.
Common Workers’ Compensation Exemptions
Not every employee in the United States is required to be protected by the workers’ comp system. Although the basic guidelines before workers’ comp is required vary among states, there are some general guidelines to show which workers may not be protected:
Agricultural Employees: Many are exempt. Those covered earn a particular amount or there are a certain minimum number of these types of employees before they must be included in the program.
Commission Only Workers: If earning only a commission, such as a real estate agent, these types of workers are usually exempt.
Corporate Officers: High-level officers of a corporation, such as the president or CEO are probably exempt.
Direct Sales Workers: Persons selling cosmetics or other types of products directly to consumers may be exempt.
Domestic Employees: Most of these are exempted; however, there could be a minimum number of employees before coverage is required. There can be a substantial variation in requirements. In California, workers’ comp coverage is required under every work situation, but it is usually included in your owners’ insurance or with a separate policy. In Arizona, the coverage for domestic servants is optional, while in Massachusetts if a domestic service employee works at least 16 hours per week, they are required to be covered. The employer is the one required to meet these rules. A homeowner hiring a maid for 3 hours a week would be an exempt employer, but a company supplying maids to various homeowners would be required to meet the requirements.
Family Members: If you working for your family business and are living in the house with your employer, you are probably not required to be covered.
Independent Contractors: These are often referred to as brief, occasional, or sporadic employees. A certain number may be allowed before the insurance is mandated.
Sole Proprietors: Often these are not included in the requirement for coverage, but they may be allowed to purchase coverage on themselves.
Miscellaneous Workers: Many volunteers, the clergy, officers of nonprofit associations, musicians, and taxi drivers are often not included under workers’ comp coverage requirements.
Do not necessarily rely on the word of your employer or their insurance company concerning this. If told you are not eligible for workers’ compensation but you believe you should be, contact the workers’ compensation board or consult with an attorney who is an expert in workers’ injury laws in your state to discover all your options.
You have a Right to use an Attorney
You should be aware of the right to contact a private attorney to analyze your specific case. Choose one who has specific expertise and experience dealing with workers’ compensation laws and cases.
Workers’ compensation is not just a static set of rules and regulations that never change. In fact, the laws are changing all the time because state and federal court cases examine claims and modify workers’ compensation rulings based on the results of those cases. This is why you should seek professional help if you question your exemption.