Exemptions for Workers Compensation


Worker’s compensation is designed to be a comprehensive recovery system to protect workers from on-the-job injury. Worker’s compensation is a no-fault system, which means that a negligent employee is not precluded from recovering for an injury (unless they were drunk or intoxicated or violated company policy) and an employer isn’t required to be negligent for an employee to recovery.

Most workers’ compensation statutes contain exclusive remedy provisions, which means that employees are not entitled to sue employers or seek other remedies as a result of injury. They are restricted to recovering through the worker’s comp system, which will pay for their medical expenses, pay a portion of their wages should they became temporarily or permanently disabled, and pay death and burial benefits if an injury causes death.

Because benefits can be very expensive, most states require employers to carry worker’s compensation insurance. This insurance pays benefits to worker’s who are injured on the job and file worker’s comp claims. Paying for worker’s compensation insurance can be expensive, so many employers will try to file exemptions to coverage for certain employees.

Employees Exempt from Workers Comp

Since worker’s compensation laws are designed to protect workers, the laws place limits on the types of employees that can be exempt from coverage. Common exempt employees include:

  • Independent Contractors: These are people who work for the company but who maintain a greater autonomy then employees. Independent contractors might be freelance workers or part-time workers who do a specific job for the company.
  • Commissioned Employees: Salespeople who do not receive a salary but only a percentage of sales can be exempt.
  • Sole proprietors: These are people who own their own business. It is possible, but not required, for sole proprietors to buy workers’ compensation insurance on themselves.
  • Family members: If you work for a family business, and you live in the same home as your employer, you can be exempt.
  • Corporate Officers: This includes Presidents, Vice Presidents and CEO’s of companies, among others.
  • Construction Officers With Corporate Stock: If you work in the construction industry and own more than 10% of the company that you work for, you may be able to be exempt from worker’s compensation laws.

Unfair Workers Comp Exemptions

Exempting employees from worker’s compensation programs can lower insurance premiums and save the company money. However, exempt employees are left with no remedy for on-the-job injuries other than to file a personal injury lawsuit. Unfortunately, the burden of proof is different for a personal injury lawsuit then it is for a worker’s comp claim. In order to recover in a personal injury lawsuit, the worker must prove that the employer breached a duty of reasonable care and that this negligence leads to injury. An employee who isn’t able to prove that employer negligence led to their injury is left without protection. Thus, being an exempt employee can be a detriment to workers.

The most common type of unfair exemptions are employees who are categorized as independent contactors. Often, employers will have employees sign a contract or callan employee an independent contractor in order to achieve cost savings.

Fighting Unfair Exemptions

If an employer labels an employee an independent contactor, this is not sufficient to actually make the employee an independent contactor. The court will usually look at a number of factors in determining whether the employee really was an independent contractor, and thus the exemption was appropriate, or whether the employee was actually an employee and thus the exemption was illegal.

These factors include the degree of autonomy that the independent contractor has, the financial relationship between the employer and the independent contactor, and the presence or absence of employee benefits such as a 401K, pension plan, and health insurance.

Getting Legal Help Fighting Exemptions

If can be very difficult to fight exemptions for worker’s compensation, so it is important to consult with an experienced worker’s comp attorney to determine whether you should have been exempt from the worker’ protection system. An experienced worker’s compensation attorney can help you determine whether your best course of action is to fight the exemption or to file a personal injury lawsuit in the case of injury at work.

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