Companies need to know and understand Florida workers’ comp laws to ensure they are following the requirements put forth by the state. They need to have coverage for their employees.
However, there are a lot of questions as to who needs to have coverage and who doesn’t. Some companies may be exempt, and some companies that require coverage could still allow the owners to be exempt.
Let’s take a closer look to get a better idea of how it all works.
As mentioned, an owner could be considered exempt from workman’s comp in Florida. This isn’t a contradiction in the law just because there needs to be a policy in place for the business and employees. You will find that most workers’ comp policies tend to be like this.
If you believe you should be exempt, or if you want to have some more information, you will want to check out this exemption information from the Florida Department of Financial Services. Here, you can see the options for different categories for example, and you can apply for an exemption.
You can also use this page to modify an application, print a certificate, or revoke an exemption.
The owners and operators of a company can often be considered exempt. For you to be exempt, you essentially need to confirm your percentage of ownership. This will allow you to be excluded from the policy, which is going to help reduce your costs.
You will find that for some industries, even if you are granted an exemption, it could expire. If that’s the case, you must stay on top of the date of expiration, so it can be renewed.
To apply for or renew an exemption, the Notice of Election to be Exempt application will need to be filled out and submitted online to the Florida Division of Workers’ Compensation.
When you receive a Certificate of Election to be Exempt, it affirms that the officer or member is not an employee and is not allowed to recover workers’ compensation benefits. The applicant for the exemption is required to personally sign the application and indicate that they have reviewed and understand all of the information it includes.
If someone other than the applicant signs the application, they could be found guilty of a third-degree felony.
Corporate officers may also elect to be exempt. However, in the construction industry, they need to demonstrate at least 10% ownership. The minimum payroll assigned to owners and officers is $950/$2,900 (or $500/$2,900 for the construction industry).
As of January 1, 2023, exemption applicants must certify that the officer electing an exemption has completed an online workers’ compensation coverage and compliance tutorial. They need to have done this before they complete the exemption application.
Additionally, the “scopes of businesses” are no longer required, but the industry type will still be reflected on the exemption certificate.
There could also be numerical exceptions for workers’ compensation in Florida. If you are in an industry, other than construction, and you have four or more employees, whether they are full or part-time, you must have worker’s compensation coverage. Keep in mind that an exempted officer does not count as an employee.
Those who are in the construction industry and who have one or more employees, including yourself, are required to have workers’ compensation coverage.
Exempted corporate officers or members of a limited liability company do not count as an employee. State and local governments are required to carry coverage, as well.
Farmers who have more than five regular employees and/or 12 or more other workers for seasonal agricultural labor that lasts for 30 days or longer are required to carry workers’ compensation coverage, as well.
For further details check out our resource here: How Many Employees Are Required for Workers' Comp in Florida?
One of the other questions often asked by small Florida businesses that are sole proprietors is whether they need to have workers’ compensation insurance. In Florida, both sole proprietors and partners are not considered employees.
Therefore, they are automatically excluded from workers’ compensation coverage according to the law. They do not need to file for an exemption.
What happens if you are running a company that is considered too high of a risk by the carriers? It can be difficult—and seem impossible—to get the coverage you need. An example might be a new roofing company that hasn’t proven itself yet in terms of safety. In those cases, there is still a program for the business. The state essentially turns into an insurance carrier.
This is called the Joint Underwriter Association (JUA) and can provide help for those businesses. Those who are in those risky fields will want to check out the site to learn more about how it works, the state fund, and the assigned risk pool.
The state takes the workers’ comp Florida laws seriously, and there are often routine job-site inspections. These are done to ensure the company is complying with state laws.
If it is discovered that the employer doesn’t have the required coverage, this can result in some serious penalties. It will typically be two times the amount the employer would have paid in a manual premium within the preceding two-year period.
Additionally, there could be a stop work order issued. This could happen in cases where the employer conceals or understates payroll to get a cheaper premium when they conceal or misrepresent employee duties or any other instance of trying to keep from paying the proper amount for the premium.
Keep in mind that the base rates are set by the state, but the actual cost with added fees is determined by carriers. Some dividends are either flat or loss sensitive.
If you aren’t sure whether you would be considered exempt or not, you will want to take some time to speak with the experts.
If you want some help navigating the laws, reach out to the experts at Kickstand Insurance. We are happy to explain which laws would apply to you and help you figure out if you are required to buy a workers’ compensation policy for your small business.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.