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What businesses can claim workers' compensation exemption?

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Quick Answer

Generally, businesses can claim workers' compensation exemptions for corporate officers, members of limited liability companies and agricultural employees, according to the National Federation of Independent Business. Exemption standards vary between states. For example, in Arizona as of 2015, coverage is optional for sole proprietors and working partners. In Connecticut, corporate officers, partnerships, multiple-member limited liability corporations and sole proprietors can choose personal exemption from coverage but must cover their employees. In Idaho, household domestic service employees may be exempt.

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Full Answer

In states such as Florida, no more than three corporate officers in a construction industry business can elect to be exempt from workers’ compensation coverage, and they must submit applications and pay application fees, according to Florida's Division of Workers' Compensation. Florida does not limit the number of corporate officers of a nonconstruction business who apply for exemption and does not require them to pay application fees.

In states such as New York, if a noncorporate partnership or single-owner business does not have any type of employees, volunteers or subcontractors, including family members, it is exempt from workers' compensation, according to the New York State Workers' Compensation Board. When one or two people own a corporation and all of its stock, hold all of the corporate offices, and the corporation does not have any type of employees, volunteer or subcontractors, it is exempt from providing workers' compensation coverage.

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