Workmans Comp Insurance
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Worker Compensation and Employees Exemptions

The insurance fund paid by the employer for the purpose of injuries occurred at the scope of the workplace to the employees is the worker compensation. Even though, the worker compensation is paid to those who are injured and are suffering from illness due to the circumstances caused in the work environment, the compensation fund is not applicable to all the workers. There are employees who are exempted from receiving worker compensation. Workmans Comp Insurance is exempted for some employees.

Workmans Comp Insurance

Exemptions to worker compensation: There are some employees who are exempted from receiving worker compensation benefits. The list includes shop owners, volunteers, federal government employees, independent contractors, standard employees in some states, farm workers, maritime workers, and railroad employees.  All these employees will be prohibited from receiving worker compensation benefits even though they are injured at the workplace.

Exemptions to independent contractors: Businesses while hiring employees for a job in order to protect the worker and the business have to make payment to the state worker compensation coverage to protect the business and employees in case of any injuries or illness. Workers will have the right to sue against the employer when the employer shows any negligence in the event of an accident occurred at the workplace and in providing the worker compensation However the employers in some states use worker compensation waiver or exemption form to allow certain workers namely independent contractors from receiving the Worker compensation. Independent contractors are not employees. They are self-employed individuals. As independent business owners, independent contractors will have the feasibility to exempt themselves from the worker’s compensation fund.

Exemptions in particular states: The independent contractors pertaining to certain states have to declare to the state that they are free from control for specific occupations A fee is charged for the exemption statement or declaration and the statement must be notarized.

Exemption for small business:  solo business owners, partners in partnership and LLC  workers are exempted from workers compensation. The list of small business owners who are exempted from receiving worker compensation is available with every state government. To identify whether the independent contractors are exempted from the worker compensation, they have to get information available from the state website. The construction industry is most commonly exempted from workers compensation.

Workers compensation application: The procedure followed for applying for workers compensation differ from state to state. Some states may demand the owners to describe the general categories of exemption. The individuals have to describe whether the exemption is for the corporation, owner of the LLC, a member or an officer. The application also seeks for business document number and scope of business as well.

There are certain criteria available to decide whether the employees are independent contractors or workers. Each state has its own standard guidelines to decide the criteria. When a business declares it’s employees as independent contractors and exempts them from compensation coverage the company leaves itself to potential fines when the state declares that the workers are incorrectly specified. The labor code of each state will decide and define the criteria for independent contractors and employees with respect to workers compensation.  It entirely depends on the company and the independent contractors to decide whether to include the workers for the worker’s compensation fund. However, they have to be ready to face the consequences of the state in case of violating any state laws.