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Workers’ compensation is a type of insurance that protects employees if they are injured on the job and limits the liability exposure of the businesses that employ them. The insurance provides medical benefits and wage replacement for the employee depending on the nature of their injuries while also protecting the employer from lawsuits related to the incident that caused the injury at work. While workers’ compensation can be considered an essential benefit for employees, many business officers find they do not require the same protection.  Those who work in administrative and/or management roles may have a significantly lower risk of sustaining a work-related injury, making workers’ compensation coverage unnecessary. Because insurance providers use a business’ total payroll to calculate insurance premiums, removing an officer’s salary can reduce insurance expenses. To do this, the officer needs to file for a workers’ compensation exemption. Exemptions can make it easier for a business to meet Florida’s workers’ compensation requirements while maintaining a reasonable profit margin.

Florida’s workers’ compensation laws aim to provide workers with financial relief if injured while on the job, but the requirements vary by industry. In Florida, all construction companies – regardless of size – must subscribe to workers’ compensation insurance, whereas non-construction companies are only required to carry workers’ compensation if they employ four or more workers. Before a business owner or officer can apply for a workers’ compensation exemption, they must know and understand their business classification – whether construction or non-construction.

Applying for a Florida Workers’ Compensation Exemption

If applying for an exemption as a construction company owner or officer, the Florida Department of State must see that you are listed as an officer or as the business owner in official documentation. The construction company must also be officially registered with the Florida Division of Corporations. An officer only qualifies if they own at least 10 percent of the company, which must be proven by a stock certificate, or in the case of an LLC a notarized statement attesting to ownership. No more than three officers may be exempt from workers’ compensation in a construction company. Construction company officers must also pay a $50 application fee when filing their exemption forms online.

If seeking an exemption as an officer of a company that is not considered part of the construction industry, most of the above requirements are the same; however, there are a few important differences. The limit on officers in a non-construction corporation that can receive a workers’ compensation exemption is raised to ten and there is no application fee. In all cases, when filing for Florida workers’ compensation exemptions, the company must not be associated with an active Stop Work Order, an Order of Penalty Assessment, or Working in Violation Order. 

In order to apply for a workers’ compensation exemption, the applicant must complete and submit a Notice of Election to be Exempt online via the Florida Division of Workers’ Compensation. The exemption application process is fairly straightforward once you determine that you have met the qualifications. The next step is to fill out the online exemption form. Visit the Notice of Election to Be Exempt page on the MyFloridaCFO website. On this page, you can submit, modify, and renew a Notice of Election to Be Exempt and, if required, pay the $50 application fee. The form will ask for company details, including corporation license numbers and company affiliation. You must agree to the terms and conditions when applying for or renewing a workers’ compensation exemption application and provide accurate contact information including your e-mail address. A notification of your status will be sent to that e-mail address within 30 days. Upon receiving the Certificate of Election to be Exempt, the officer or business owner is no longer considered an employee and may not recover workers’ compensation benefits even if they are injured while at work. Workers’ compensation exemptions must be renewed each year. The exemption takes 30 days to be effective. 

Workers’ compensation exemptions allow business owners and officers to exclude themselves from receiving workers’ compensation benefits – keeping their salaries out of the total payroll when insurance companies calculate their premiums. While this may seem like an easy decision to make as a business owner or officer, speaking to an experienced Florida workers’ compensation attorney is recommended before filing for an exemption. If you are interested in saving your company money and reducing your workers’ compensation expenses, an exemption can be a convenient option for you. It is essential to comply with all workers’ compensation regulations to avoid lawsuits and expensive fines. To make sure your company is in line with Florida law, contact Conroy Simberg for guidance. Our attorneys represent employers, self-insureds, insurance companies, TPAs, excess carriers, and public entities in all types of workers’ compensation actions. Let us handle the legal aspects of your workers’ compensation exemption so you can focus on company operations.