Workers’ compensation exemption
Workers’ comp is different depending on the state you are in. Companies are expected to get it for their employees, in case of injury in the cause of duty. There are certain ways a company can become eligible for exemption from workers comp. We specialize in guiding you through the process of getting your company exempted.
For you to get an exclusion from workers comp, your business will go through a bunch of screening processes designed by the state. These will include filing different forms explaining various aspects of your business, including ownership, licenses, employee positions and duties, and operations. They will also require information about your current insurance carrier.
We have over 20 years’ experience in the tax industry, with a stellar success record in getting exemptions from workers comp. We also handle applications for a renewal of exemption.
Who is eligible?
There are various ways your company may qualify for exclusion from paying workers comp, and some of these may simply be because of the nature of your job. Most companies opt out of paying workers comp to keep operating costs lower and remain competitive in the current financial climate.
There are several reasons why a company may be exempt from paying workers compensation insurance. Some of these may be as a direct result of the job your company does, and they include:
- Volunteers: As incredible and invaluable as they may be, volunteers are not covered by your workers’ comp. This is a common misconception. The reason for this is that to qualify for workers comp, you are required to receive some form of payment from your employer.
- Independent contractors: Your company may not be required by state or federal law to purchase workers comp for independent contractors. You are however expected to classify them as such, to avoid paying taxes on payroll and workers comp premiums for them. Each independent contractor is required to have their own workers’ compensation exemption or present their own insurance policy.
- Farmhands: If you own a farm, you are not required by law to purchase workers comp for your employees. It is, of course, good practice to do so. This exemption extends to undocumented employees since insurance providers will require some sort of employee identification when purchasing insurance.
Employees can be exempt from workers’ compensation insurance due to certain reasons such as an injury sustained in a physical altercation. Injuries that are self-inflicted or as a result of policy violations are also automatically exempt.
What else should you know?
There are a few things you should know and they include:
- Filing for a workers’ comp exemption is an elective service. This means that although the law allows you to apply for exclusion from paying workers comp, it does not require it.
- Upon being exempted from workers comp, your employees will not receive any benefits while recovering from injuries sustained during the course exercising their duties.
- Upon exclusion from the workers’ compensation laws, you will receive a Certificate of Election, which has to be renewed upon expiry. We shall be with you throughout the renewal process, making sure that all the forms are filed correctly and on time.
