Florida Workers Compensation
what is it & why is it important?
Workers compensation insurance provides benefits when an employee suffers an accidental injury or death arising out of work performed in the course & scope of employment, regardless of fault. In return for compliance, employers receive special immunity from workplace injury lawsuits by employees. Benefits payable under Florida Workers Compensation law include payment of medical expenses, disability and death benefits.
Who must Buy Florida Workers Compensation Insurance?
Under Florida law, all government employers, regardless of the number of employees, must buy workers compensation insurance. Private employers with four or more employees on the other hand, must also purchase coverage. In contrast, employers in the construction industry must carry coverage with just 1 employee.
Definition of Employee
According to the FLORIDA DEPT OF FINANCIAL SERVICES, an employee is defined as any person engaged in employment under an appointment or contract of hire. This includes aliens, minors, full time & part-time workers and day labor. Independent contractors in the non-construction sector are not classified as employees. Sole proprietors and partnerships are not classified as employees and do not have to be counted UNLESS they are in the construction industry. Finally, non-construction LLC members are also employees but may exempt themselves from coverage. See employer exemptions below.
Employer Exemptions
Under Florida law, an individual who is an officer of a corporation can exclude themselves from workers compensation coverage. This allows the officer to remove their payroll from the total payroll used to calculate premiums. In doing so, this excludes the officer from recovering workers compensation benefits but helps to save money on the premium. To file an online exemption, CLICK HERE. In the non-construction industry, there is no limit as to the number of officers that may file an exemption. In the construction industry however, the law only affords up to 3 corporate exemptions. Officers in the construction industry must own at least 10% of the corporation in order to file an exemption.
Penalties for Noncompliance
Significant penalties apply for employers who must carry workers compensation coverage but fail to do so. First and foremost, failure to comply with Florida workers compensation law is a 3rd degree felony. Secondly, the state agency responsible for Florida workers compensation regulation, the Department of Workers Compensation, may issue a stop-work order. A stop-work order allows the Department to cease all business operations of the employer. Additionally, the division has authority to assess stiff monetary penalties for violation of the law. Fines two times higher than what the employer should have paid in premiums over the last 2 years are assessed. Finally, employers have no immunity when an employee is hurt on the job. This gives an injured employee right to file suit against their employer.
Florida Workers Compensation insurance protects not only employees, but it provides valuable legal protections to employers as well. Whether or not there is legal obligation to buy coverage, ANY employee can be injured on the job. Whether a small business with just 1 employee, or a larger one with 20, the risks are high when you choose to go without coverage.
