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Everything You Need to Know About Workers Compensation Exemption

So much more than your area of expertise goes into running a business. If you have employees, you also need to handle human resources (HR) needs, in addition to the day to day aspects of your work.

In this regard, workers’ compensation is one of the most critical pieces of the puzzle that you must address. With this in mind, there are exceptions that make it so you aren’t on the hook.

Read on to learn more about the circumstances that allow for workers compensation exemption.

Understanding Workers Compensation Exemption

An employee is entitled to receive benefits if they get hurt on the job. Because of this, business owners are required to take out an insurance plan that will cover an employee’s missing wages in these circumstances.

In addition to missing wages, workers’ comp can also cover things like funeral costs, disability, physical therapy, and specific medical treatments.

Here are some circumstances in which you’ll be exempt:

1. The People Working for You Are Independent Contractors

While employees are entitled to workers’ compensation benefits, independent contractors are not. If you work with any sort of freelancers on a 1099 basis, you won’t have to cover them on your workers’ comp insurance plan.

As a result, you also won’t be responsible for health insurance, payroll tax, retirement plans contributions, and other such benefits. It’s important that you establish someone as a temporary 1099 worker early in the process so that there is no confusion.

Understand the laws in your state and how they dictate whether someone is entitled to employee benefits.

2. Certain Professions Allow for Exemptions

There are also certain professions that are exempt from workers’ compensation. These issues are typically outlined state by state, so it’s important to understand how your state handles it.

An example of some exempt professions include farmworkers, certain real estate specialists, government jobs, and domestic workers.

3. There Are Circumstances That Exempt an Employee From Receiving Workers’ Comp

Aside from taking out an insurance policy on an employee, there are also some circumstances in which an otherwise qualified employee becomes exempt from these benefits.

For instance, if a professional causes their own injury, such as in the event that they break company policies, get into a fight on the job, or otherwise take risks that weren’t part of their job description, the situation might be exempt.

Certain situations will require a workers’ comp attorney. They’ll make sure you’re on the right side of the law and that you have a clear understanding of your obligations.

Handle Your Workers Comp Needs

As you can see, there are specific circumstances that allow for workers compensation exemption. These are the types of situations you need to stay on top of when you run any kind of company.

Regardless of what sort of company you run, it’s up to you to manage these sorts of human resources (HR) needs. Staying on top of these situations will dictate how you manage your budget and day to day liabilities.

Check back with us if you’d like to learn more about running a business.

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