How Do Exemptions Affect Workers' Compensation in Orlando?

Posted on 02-01-2016 by
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Workers' compensation is a state-mandated insurance system that requires most employers to pay benefits to employees injured on the job. Under Florida law, an employer must generally carry workers' compensation insurance if they have “four or more employees,” regardless of full-time or part-time status. (There are separate rules employers in the construction industry, which is discussed below.) All eligible employees must be covered under workers' compensation unless they are entitled to and elect to take an exemption permitted by Florida law.

Exemption for Officers of a Corporation

The most notable exemption is for “officers of the corporation” that constitute the employer. Many Florida businesses are incorporated, meaning they exist as distinct legal entities registered with the state. A corporation usually has at least one officer, such as a President or CEO. But a corporation may have many additional officers, including a secretary and one or more directors or vice presidents. Under Florida law, anyone who is “listed as an officer of a corporation” with the Florida Department of State “may elect to be exempt” from coverage under workers' compensation. This election must be filed with the state, although there is no charge for corporations outside of the construction industry.

Special Rules for the Construction Industry

With respect to construction—where, as you might expect, there tends to be a much higher risk of employee injury—Florida applies more stringent rules with respect to workers' compensation and exemptions. First, a construction firm with even a single covered employee must provide workers' compensation insurance. Second, while officers of a corporation engaged in construction may still seek an exemption from workers' compensation, Florida law limits such exemptions to three per “corporation or of any group of affiliated corporations.” An exempt officer must also be at least a 10 percent shareholder of the corporation. And unlike officers of non-construction corporations, there is a mandatory filing fee of $50 for any exemption application.

Other Exemptions

If you are self-employed as a sole proprietor—that is, you have not formed a corporation or limited liability company to run your business—you are considered an “employee” for workers' compensation purposes unless you elect to file the exemption described above. Also, any “independent contractor” you hire is generally not considered an employee. In this context, an independent contractor refers to a separate business you hire to perform work using their own facilities and employees. You cannot simply reclassify your own employees as “independent contractors” to avoid paying workers' compensation. Again, these rules are different for employers in the construction industry.

Need Help With Workers' Compensation?

This is only a brief overview of the exemptions applicable to workers' compensation. The laws in this area are complicated and often subject to misuse by employers and their insurance carriers. That is why if you are a worker hurt on the job, it is a good idea to seek assistance from an experienced attorney in Orlando.

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