Workers’ compensation insurance is an important consideration for Florida business owners, but not every business is subject to the same requirements.
Whether a Florida business must carry workers’ compensation insurance generally depends on the industry, number of employees, and business structure.
Understanding the basic rules can help business owners avoid costly mistakes.
Non-Construction Businesses
For most non-construction businesses in Florida, workers’ compensation coverage is generally required when the business has four or more employees, whether they work full-time or part-time.
There are additional rules concerning business owners, corporate officers, LLC members, sole proprietors, and partners, so the employee count is not always as straightforward as simply counting everyone who works for the business.
For example, sole proprietors and partners in non-construction businesses are generally not considered employees for workers’ compensation purposes, although they may have the option to elect coverage.
Construction Businesses
The requirements are different for construction businesses.
Florida generally requires construction employers with one or more employees to carry workers’ compensation coverage. This includes part-time employees and can include certain business owners depending on their status and whether they have an exemption.
Because the rules are more stringent for construction businesses, contractors should pay particular attention to their workers’ compensation obligations.
What About 1099 Contractors?
Calling someone a “1099 contractor” does not automatically mean that person is an independent contractor for workers’ compensation purposes.
Florida has specific criteria for determining independent-contractor status. The rules are particularly important in construction, where Florida workers’ compensation law does not recognize independent contractors in the same way as non-construction businesses.
Businesses that use subcontractors should also verify that the subcontractors have the required workers’ compensation coverage or valid exemptions when applicable.
Florida’s Department of Financial Services advises contractors to make sure subcontractors have the required workers’ compensation insurance before beginning work.
Why Workers’ Compensation Matters
Workers’ compensation insurance is designed to provide benefits for covered work-related injuries and illnesses.
Beyond the insurance itself, having the required coverage is an important part of complying with Florida law.
The Florida Division of Workers’ Compensation conducts compliance inspections. Businesses operating without required coverage can face enforcement action, including Stop-Work Orders and penalties.
Business Owners May Have Exemption Options
Certain corporate officers and LLC members may qualify to elect an exemption from Florida workers’ compensation requirements.
An exemption does not mean the business itself is exempt from providing coverage for other employees. Instead, an approved exemption can allow an eligible owner to exclude themselves from workers’ compensation coverage.
Eligibility requirements vary depending on the business structure and whether the company operates in construction or another industry.
When Should You Review Your Coverage?
A business should review its workers’ compensation situation whenever there is a significant change in its operations.
Examples include:
- Hiring additional employees
- Changing employee job duties
- Starting construction-related work
- Adding subcontractors
- Increasing payroll
- Changing business ownership
- Adding or removing exempt owners
- Expanding into another state
Changes in employee duties and payroll should also be reported to the insurance carrier when applicable.
Have Questions About Workers’ Compensation?
Florida workers’ compensation requirements can become complicated, particularly when a business uses contractors, subcontractors, owners, or employees in different roles.
Nieves Insurance Group can help Florida business owners review their workers’ compensation needs and explore available insurance options.
If you are unsure whether your current coverage reflects your business’s operations, it may be worth reviewing your policy with an insurance professional.
This article provides general information and is not legal advice. Workers’ compensation requirements depend on the specific circumstances of a business and can change. For official requirements, consult the Florida Department of Financial Services, Division of Workers’ Compensation. Insurance coverage is subject to the terms, conditions, exclusions, and limitations of the applicable policy.
