Who Is Exempt from Workers’ Compensation?

Although workers’ compensation is designed to cover injured workers by paying for their medical bills, missed time from work, and other expenses and losses, the law does not obligate everyone to have workers’ comp insurance coverage. Certain businesses, employees, and categories of workers are exempt from the workers’ comp systems that are mandated by state governments.

For example, the following types of businesses are not required to purchase workers’ comp policies:

• Partnerships, LLCs, and LLPs that do not have employees: The law does not view partners and members of LLCs as employees in the scope of workers’ compensation, although these individuals may decide to purchase a policy to cover themselves.
• Sole proprietors who do not have employees: Likewise, a sole proprietor who does not employ anyone is not required to have workers’ comp. But these individuals can still voluntarily obtain a policy to cover themselves.
• Small corporations: A corporation with one or two owners is exempt, provided that each individual holds an office, owns at least one share of corporate stock, and nobody else holds any of the stock or offices. There must not be any other employees or volunteers of any kind for this exemption to apply.

Injuries that Are Exempt from Workers’ Comp Benefits

Just as there are businesses that are exempt from workers’ compensation, there are certain types of injuries that are excluded from workers’ comp benefits. These are a few of the most common examples:

• Injuries that occur while commuting: The law generally views driving to or from work as distinct from someone’s job. An injury that takes place during this time is therefore not considered to be within the scope of employment.
• Injuries that occur due to intoxication: If an employee is intoxicated or under the influence of drugs or alcohol, and this is the sole cause of their injury, workers’ comp benefits will not cover the employee’s losses and expenses.
• Injuries resulting from horseplay on the job site: An employee who engages in unsafe behavior or “horseplay” while at work will not have workers’ comp benefits extended to them. An exception to this is an employee who does not participate in such conduct but gets hurt because of someone else doing it.
• Intentional acts: A worker cannot intentionally injure themselves on the job site and still receive workers’ comp.
• Illegal activities: When an employee does something illegal in the workplace and gets injured as a result, the workers’ comp insurer can legally deny benefits.
• Injuries from activities that violate company policy: Similarly, anyone on the job site whose conduct does not comply with the company’s policy, procedures, and related rules can expect to have their injuries denied coverage.
• Former employees’ injuries: Any injured worker who has been laid off will not enjoy workers’ comp coverage unless the injury in question occurred before their job termination.

Jobs that Are Exempt from Workers’ Comp

Certain categories of jobs are also exempt, which means that it is essential to understand a particular individual’s employment or other relationship with a company. Exempt job classes include:

• Federal employees: Employees of the federal government, including those who work for the postal service, are subject to a different workers’ compensation system. The Federal Employees’ Compensation Act, or FECA, is the law that covers these workers’ injuries and occupational diseases.
• Railroad workers: Likewise, state-run workers’ compensation programs do not apply to railroad workers. The Federal Employers’ Liability Act (often called the Railroad Workers Act) allows railroad employees who are exempt from their state’s workers’ comp system to file a lawsuit against their employer in the event of an accident.
• Longshoremen: Workers who sustain injuries or develop occupational diseases while working either on piers or the navigable waters of the United States can apply for benefits under the Longshore and Harbor Workers’ Compensation Act.
• Other categories: States usually exempt part-time maids, nannies, gardeners, and maintenance workers who are employed in a home for specific job duties. Workers who do very little work in a given year, taxi drivers, and certain agricultural workers are also not entitled to workers’ comp benefits.

Texas Employers Are Not Required to Carry Workers’ Comp Insurance

Texas is an outlier among the states in that it is the only one that does not require its employers to carry workers’ compensation insurance coverage for their employees. However, injured workers have the right to file lawsuits against their employers to seek compensation for injuries sustained in the workplace. There are also exceptions to the general rule, for instance, construction contracts for work that is performed for governmental units.

Can Independent Contractors Get Workers’ Comp Benefits?

Since they are not employees of the companies that contract with them for various projects, independent contractors are exempt from workers’ comp coverage. There is often, however, controversy over whether an individual is truly an independent contractor or is actually an employee under the law. The distinction usually boils down to job duties and the amount of control the business exercises over the individual.

A worker is likely to be viewed as an independent contractor if they:

• Can turn down work or refuse to do certain projects
• Work for multiple businesses
• Determine their own work schedules
• Negotiate with the company regarding their pay
• Are not supervised, trained, or subject to company performance reviews
• Pay for and provide supplies, equipment, and other work-related implements and facilities
• Are allowed to hire employees and subcontractors

Can Volunteers File for Workers’ Comp?

Neither state nor federal law views volunteers as employees for purposes of workers’ compensation coverage. Performing unpaid charitable work for a nonprofit organization is a classic example of volunteering that does not qualify for workers’ comp. The organization can choose to provide workers’ comp coverage to its volunteers if it wishes, or it may ask the volunteer to sign a waiver in the event of an accident.

There are exceptions for volunteer firefighters, volunteer police officers, and any individual that a firefighter or officer asks to assist in an emergency. Benefits may also extend to volunteers for public employers like state agencies.

As with independent contractors, there are often questions about whether an individual is truly a volunteer or if the law will view them as an employee. This usually becomes an issue if the non-profit organization provides food, lodging, transportation, discounts, or other benefits to the volunteer. Some states may view these as in-kind payments and therefore categorize the individual as an employee.

If you’ve been injured on the job site but you are not sure whether you qualify for workers’ comp, or your employer or its insurance company has denied your claim for benefits, talk to our dedicated workers’ compensation lawyer.

How Do Business Owners Get Workers’ Comp Benefits?

Because not all insurance companies offer workers’ comp insurance directly to business owners, they may not be covered by their companies’ policies. As a general rule, owners may obtain benefits by purchasing directly from an insurance company or through an agent or broker.

Agents and brokers both sell insurance and offer similar services to business owners who wish to have workers’ comp insurance coverage. The main difference is that while an agent sells policies on behalf of the different insurers that they work for, brokers represent the people who are purchasing coverage. In essence, brokers try to find the best policy for someone by requesting quotes and submitting applications to different insurance companies.

Talk to a Lawyer if You Feel You May Be Exempt from Workers’ Compensation

With 250+ years of combined legal experience and a track record of over 100,000 victories, Pond Lehocky Giordano is dedicated to securing the compensation you need for your injuries. Get started today with a free consultation—call 1-800-568-7500 or complete our contact form.