How To Know If You Qualify For A Florida Workers’ Comp Exemption

Most employers are legally required to provide workers’ compensation coverage. With it, employees have a way to recover their losses if they were injured while working. This may include medical bills incurred by their injury, but typically it also includes coverage for lost wages. 

Florida state laws dictate that if your business has more than four employees, you are required to provide this coverage. In some cases, you may be qualified for Florida workers’ comp exemption. This is especially useful if you want to exclude upper leadership such as owners or officers, or yourself. 

Even if you’re a small business just starting out, it’s important to know if you are eligible for Florida workers’ comp exemption beforehand. Fines for failing to provide this coverage are quite heavy and you have to meet strict requirements despite being exempt from providing it. 

Here’s everything you need to know. 

What are the main workers’ comp requirements?

Before getting into specific instances of Florida workers’ comp exemption, we have to take a look at which employers are required to provide coverage. According to the Sunshine State’s coverage law, the following businesses need to provide workers’ comp for their workforce:

• 
  Businesses in the construction industry that employ at least one person
• Non-construction businesses with four or more full-time or part-time employees
• Agricultural business with six or more employees
• Agricultural business with 12 or more seasonal employees (employed between 30 to 45 days per year) 

Additionally, workers’ comp is required for all employees of local or state governments. 

If you’re unsure if your business fits into any of these categories, you should contact an experienced workers’ comp attorney. A legal professional can help you avoid costly mistakes and clarify any qualification guidelines or processes that seem too complicated.

Who is eligible for Florida workers’ comp exemption?

State laws allow a Florida workers’ comp exemption for the following entities:

• 
  Corporation in a non-construction industry - to qualify, you need to be defined as a corporate officer in the official records.
• Corporations in the construction industry - available for individuals who maintain 10% ownership within the company and are defined as officers. There is an application fee of $50 and the exemption is available for no more than three officers in the corporation.
• Limited Liability Companies (LLCs) which are registered with Florida Division of Corporations - to successfully apply, you must hold at least 10% ownership of the company. This Florida workers’ comp exemption is available only to 10 officers of the company.
• Construction LLCs - the exemption is available for no more than three LLC officers and you’re required to pay an application fee of $50.



What about businesses with no employees?

If you’re a business owner without any employees, you may be exempt from workers’ comp requirements. Keep in mind that even if you have no employees and consequently don’t need workers’ comp, you may still need a workers’ comp certificate of insurance for some clients. 

The reason why is simple. Without coverage, they would be liable if you got injured while working for them.

The same applies to a scenario in which you hire an independent contractor without workers’ comp for a project. If the contractor you hired is injured, the client will have to cover their injuries. 

This is pretty common in high-risk industries like construction, which is why even if you’re an independent construction contractor without any employees, you will need workers’ comp.

Exemptions for sole proprietorships and partnerships

According to the law, sole proprietors aren’t considered employees. So technically, you don’t need workers’ comp and by extension, don’t need to worry whether you qualify for a Florida workers’ comp exemption or not. 

This doesn’t apply to construction businesses because the law mandates that sole proprietors in the construction industry are considered employees due to the high-risk nature of the job. In other words, a workers’ comp policy is compulsory.

If you want to be covered, you can purchase workers’ comp coverage for yourself by filing a DWC 251 form.

Guidelines for partnerships are quite similar to those for sole proprietors. Since partners are also not considered employees, they aren’t covered unless they choose to apply for coverage. 

We stress once more that everything is different for the construction industry, meaning partners are considered employees under law and not exempt from workers’ comp.

What if you employ family members?

Small businesses usually hire family members so many SMB owners wonder if they qualify for Florida workers’ comp exemption.

We have bad news for construction businesses, as once again, all workers are required to have workers’ comp. 

For businesses in other industries, it’s possible to exclude some workers from the company policy depending on their status. For instance, if you hired your nephew in your plumbing company as a regular employee, you will have to pay workers comp’ regardless of whether they’re a seasonal or part-time employee.

If you want to exempt family members from your policy, we recommend hiring them as independent contractors. Contractors don’t have workers’ comp coverage, so you won’t have to pay anything.

Why you should hire an attorney

Everything we discussed above will provide you with a general idea of businesses that may qualify for workers’ comp exemptions. However, we still recommend hiring a legal professional to guide you along the way.

There are many fine details about the intricacies of workers’ comp listed in Florida statutes, and if you’ve ever read legal texts, you know how complicated they can be. Applying without understanding or meeting all the requirements will probably lead to a denied application.

In the worst-case scenario, you may have to pay a hefty fine or go to jail because you excluded an employee that doesn’t qualify for an exemption.

This is why you should consult an attorney who can confirm if you are legally entitled to an exemption and help you file an application properly.

At Law Offices of RITE, we can do all of the above for you. Our attorneys are experts in workers comp’ and can provide you with valuable legal advice that will see to it you’re not in violation of any laws when filing for an exemption.

So if you’re unsure if you comply with all the legal requirements, call (904) 500-RITE (7483) or send us a message at info@rite4justice.com to schedule a free consultation and sort things out.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.