Workers Compensation Exemption in Florida Explained

The workers’ compensation exemption landscape in Florida is an ever-shifting maze with rules and regulations that can be hard to track. Staying in the know, and understanding the intricacy of exemption criteria as a Florida business, will help you avoid legal and financial pitfalls, such as misclassifying employees or not having coverage when it’s required. This article aims to give you a clear breakdown of workers’ compensation exemptions in Florida, focusing on whose exemptions are.

What Is Workers Compensation?

For most businesses in Florida, workers’ compensation insurance is mandatory. It covers employee medical bills, lost wages, or related expenses that crop up when an employee is injured on the job. It acts as a safety net, helping employees stay afloat while they recover from their injury, and ensures that employers don’t come under financial stress from the loss (temporarily or permanently) of an employee.

Why Do Some Individuals & Businesses Have Workers’ Compensation Exemptions in Florida?

In certain situations, specific individuals and business entities may have an exemption from workers’ compensation in Florida:

• Classification: Workers’ compensation laws are designed to protect employees, not independent contractors or volunteers, so these individuals are responsible for their work-related injuries.
• Company Size: If you own a very small business with just a handful of employees, you may be exempt from mandatory workers’ compensation coverage.
• Business Ownership Structure: In some cases, owners or partners of businesses may be exempt from workers’ compensation, especially if they are not actively involved in the day-to-day operations.

Who Is Exempt From Workers’ Compensation Insurance in Florida?

The exemption criteria in Florida can differ based on the industry in which a business operates.

1. Corp, Sole Prop, or Partnership: If you are a corporation, sole proprietor, or partnership outside of the construction industry, you can seek workers’ compensation exemption in Florida permitting you to be officially recognized as an officer of the corporation.
2. Construction Guidelines: As a corporation or LLC in the construction industry, you must have a minimum of 10% ownership stake in the company and be registered as one of its officers to apply. A $50 application fee must be submitted, and no more than 3 officers can seek this exemption.
3. Non-Construction LLC: If you are a Limited Liability Company (LLC) that is registered and listed with the Florida Division of Corporations, you must have at least a 10% ownership stake in the LLC to apply for workers’ compensation exemption in Florida. A maximum of 10 LLC officers can submit applications for this exemption.
4. Agricultural Guidelines: If you are an agricultural company, you are required to have workers’ compensation coverage if you have 6 regular employees or 12 seasonal employees who work more than 30 days during the season (but no more than 45 days total in a calendar year). If you have less than this you may be able to file for exemption.

Applying For Workers Compensation Exemption in Florida

To apply, you must complete an application and submit it to the Division of Workers’ Compensation. You’ll need to provide documentation, such as proof of business structure or ownership, and pay a fee if applicable. Exemptions must be renewed periodically - usually annually - and you must maintain your eligibility criteria.

Risks & Benefits of Opting For Exemption

Exemptions can offer reduced insurance costs for employers and allow workers to choose their healthcare providers. However, a lack of coverage for work-related injuries or illnesses can pose financial risks for both parties. Employers may face increased liability and the risk of lawsuits from injured workers.

Seek Legal Counsel To Understand Exemption Implications

Grasping the nuances of who is exempt from workers’ compensation insurance in Florida is pivotal for ensuring legal compliance and protecting the interests of your business and employees. While exemptions can offer financial and operational flexibility, it’s advisable to consult with a legal expert to ensure you’re making the best decision for your Florida business. Contact workers compensation lawyer, Frank Eidson today for a consultation to discuss workers’ compensation exemptions and how they apply to your specific situation.