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  • John Larrimer

Who Is Exempt from Workers' Compensation Insurance?

While most states require employers to acquire workers' compensation insurance, specific job categories are exempt from it. Workers' compensation insurance is a type of coverage that offers workers' comp benefits to employees who’ve sustained work-related injuries. It shelters both employers and employees from massive costs in the event of a workplace accident.


As stated earlier, certain types of businesses are exempt from workers' comp coverage. They include workers that only work a nominal number of days, plus those with relatively low income. One can check their local state workers' compensation laws to determine which rules apply to their case. It would be best to find out what workers comp investigators look for as well.


Types of Workers Exempted from Workers' Comp Insurance

Types of Workers Exempted from Workers' Comp Insurance


The workers' comp insurance coverage rules change depending on where the employee is situated. Employers are, therefore, responsible for understanding workers' compensation laws to ensure they meet their state law coverage requirements. Here are some factors that determine workers' compensation exemptions.


Businesses with Less than the Required Number of Workers by Statute


Most states require businesses with at least one employee to carry a worker's compensation insurance. Other states require them to purchase workers' compensation insurance from a workers' compensation insurance carrier when they have at least three, four, or five employees. The employer will first determine the employee headcount of various states; then outline which employees are exempted.


Workers Comp Exemption for Various Job Descriptions


Many job categories don’t go by the number of employee headcount, like having fewer than three employees to carry workers' compensation insurance. Depending on the state where an employer is situated in, some jobs are exempted from insurance coverage. Here are the commonly exempted categories in most states.


  • Domestic workers: These employees provide household services like cleaning, cooking, gardening, and caring for children.

  • Farm laborers or agricultural workers: They’re workers who tend to animals and grow crops.

  • Temporary employees: These are workers who work as needed, without a guarantee of ongoing work.

  • Family members: A family member working for another family member.

  • Independent contractors: They are self-employed individuals.

  • Federal employees: People working for a government agency with their own worker’s compensation coverage program.

  • Railroad employees: These are railroad workers who are covered by the federal employers' liability act.

  • Longshore or maritime workers: Employees who load and offload ships in a port that receives the longshore benefits act.

  • Sole proprietors partners members, corporate officers, and limited liability companies: Small business owners and managers are exempted from workers' comp coverage.


The workers' compensation exemption is not always black and white. In most states, it depends on how many workers an employer hires, the amount earned, and how many hours the workers complete their tasks, among other things. More importantly, employers should read more about the workers' comp exempt rules or discuss them with work injury attorneys in Columbus from Larrimer & Larrimer Law Firm at (614) 820-1855 or even real estate brokers and agents.


Do Self-Employed Individuals Need Workers' Compensation Coverage?


A corporate officer, a limited liability company, a sole proprietor, and independent contractors seeking coverage can buy workers' comp insurance from a worker compensation insurance carrier, even though it's not mandatory. Typically, independent contractors and corporate officers are uninsured, exposing them to the aftermath of work-related injuries. Therefore, purchasing a workers' compensation policy when it's not mandatory is considered a smart move.


Workers' comp insurance covers medical expenses and lost wages from workplace injuries. In the workers' compensation system, workers who’ve suffered from workplace injuries can attain compensation via lawsuits.


How Employers Can Apply for Workers' Comp Exemptions


The process is different from state to state. Some states don’t require paperwork, as the state will automatically accept those they consider non-employees exempted. If one has to file an applicant form, they typically have to provide the following information:


  • Information of employee in question

  • Business license

  • Proof of business ownership

  • Details of the business

  • Information of workers comp insurance carrier, if applicable.


Final Remarks!


Every employer needs to carry this particular insurance for their business. However, independent contractors and corporate officers who meet all exceptions criteria can still purchase the coverage. Medical bills from a work-related injury can cause havoc to a small business. The premiums an individual pays today can save them immensely when an accident that causes injuries occurs in the workplace. We hope this article has helped you understand the workers' comp exemption and other related terms.


For other questions related to workers comp, such as if one can take a vacation while on workers compensation, you may seek answers from our attorneys today.

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