What is Workers Comp Exemption?
Workers’ compensation is mandated by each state to provide insurance benefits to employees who get injured or sick on the job. Employer-employee relationships regarding workers’ comp are influenced by various entities including the IRS, industrial commissions, courts, and local state statutes. Certain employments situations are exempt from workers’ comp coverage.
What is workers’ comp exemption, and does it apply to your job?
Depending on where you work, your state may categorize certain employment situations differently. Some may provide partial coverage to workers, while others allow for complete exclusion from any benefits that go along with being hurt in the workplace.
The majority of states require every employer with one or more employee to provide workers’ compensation coverage. However, other states are allowed to hit a specific threshold in terms of number of employees before they are required to provide coverage. In Florida it is 4+ employees, while New Mexico requires coverage once 3+ employees are on the job, for example.
Workers’ compensation exemption may affect you if you hold one of the following positions:
- You are engaged in casual labor and not technically considered an “employee.” Some states define casual labor as employment that is brief, occasional, infrequent, or irregular. Other states assign a specific number of days per year or a payment threshold that must be met before a worker is considered an employee. Casual labor is typically defined as work that does not directly promote or advance the employer’s business or operations. For example, casual labor relationships can be when an employer hires a landscaping company to maintain the grounds every so often, or a corporate office hiring a plumber to update pipes in the building.
- Domestic employees are usually exempt from workers’ comp protection. Domestic workers may include housekeepers and maids, babysitters, cooks, and other positions related to the household.
- Agricultural, farm, ranch, and aquaculture employees are exempt from coverage is most states, though some states do limit the exception to operations, those with less than a specified number of workers, or companies with a specified payroll amount.
- Commissioned real estate agents or subagents paid solely on a commission basis are commonly excluded from workers’ compensation insurance.
While the positions listed above are the mostly commonly excluded positions, there are several more that may only apply in a few states. If you are employed in one of the following positions, you will need to check with your hiring department or refer to state statutes to confirm whether you are protected from workplace injuries:
- Direct sales consultants
- Officers of non-profit companies
- Athletic contest officials like umpires and referees
- Cab drivers
- Volunteer ski patrol workers
If an exempted worker is injured on the job, the only way to recover medical expenses and lost wages from an employer is through the legal system. The injured person has the same rights as a member of the general public, and will need to prove that the employer was negligent in causing their injury or illness.
If you are an exempt employee and get hurt in the workplace, contact a personal injury lawyer for a consultation as soon as possible.