All About Who’s Covered: Workers’ Comp Exceptions and Exemptions!

Workers' Comp

You’ve probably heard about workers’ compensation insurance, right? It’s that important safety net that steps in when employees get injured or sick because of their work. It’s pretty neat: it covers medical bills and even replaces wages when employees can’t work.

Plus, worker’s comp keeps employers safe from expensive lawsuits. But did you know it doesn’t cover everyone?

That’s right— there are exceptions and exemptions, and they can depend on everything from the job you do to the state you’re in. For instance, most employees working for small businesses are covered by workers’ comp insurance for small businesses, but there are specific criteria and regulations that vary by state.

So, who’s usually covered by workers’ comp?

Employees Covered by Workers’ Compensation

Most employees — whether they’re full-time or part-time — can count on workers’ compensation if they get hurt on the job. It doesn’t matter what kind of work they do or which industry they’re in, chances are, they’re covered. 

But remember, different states have different rules about things like how many employees a business must have before it has to provide coverage, and some industries might have specific exemptions.

Independent Contractors and Freelancers

Here’s where things can get a bit tricky. Independent contractors typically aren’t covered by workers’ comp. They’re their own bosses, after all. But if you’re an independent contractor, it’s super important that you’re classified correctly as an independent contractor (and not an employee). Otherwise, you might miss out on benefits you should be getting.

Business Owners and Sole Proprietors

In most cases, if you own a small business or you’re a sole proprietor, you won’t be covered by workers’ compensation. However, if this is you, you’ll want to think about whether you really should opt into your plan to protect yourself from work-related injuries or illness.

Farm and Agricultural Workers

Now, this group is special. Each state has different rules when it comes to farm and agricultural workers. Some require all employers to offer workers’ compensation, while others have different rules. If you’re in this industry, you’ll want to make sure you understand your state’s regulations.

Domestic Workers

Domestic workers are in a similar boat. Rules for workers’ compensation can vary greatly, and it’s crucial for employers to know their responsibilities under the law.

Federal Employees

Federal employees are covered under their own system, the Federal Employees’ Compensation Act, or FECA. It provides similar benefits to state-based workers’ comp, but the process and structure can be different.

Volunteers and Nonprofit Workers

The coverage for volunteers and people working for nonprofits can vary quite a bit, depending on the state and the type of work being done. If you run a nonprofit or supervise volunteers, it’s worth looking into additional insurance options like volunteer accident insurance.

Exemptions for Certain Professions

And lastly, there are some professions that might have special exemptions. Real estate agents, certain consultants, professional athletes — they all might have different rules when it comes to workers’ comp.

So, there you have it!

Understanding who’s covered by workers’ comp and who’s not can be a bit of a puzzle. But it’s crucial to know whether you or your employees are covered. 

Workers’ comp is all about making sure everyone has the protection they need — and peace of mind. Talk to your insurance agent to figure it all out.

Article and permission to publish here provided by Tomasz Rezik. Originally written for Supply Chain Game Changer and published on August 8, 2023.

Cover image by Azam Ishaq from Pixabay