In Florida if your business is not in the construction industry and you have four or more regular employees you are required by law to have workers’ compensation insurance. Whether a person working for your business qualifies as an employee for workers’ compensation purposes and whether an owner or worker qualifies for an exemption is an assessment to perform with your attorney before you receive a stop-work order or records request from the Division of Worker’s Compensation of the Department of Financial Services. Take the opportunity to assess your coverage obligation now This article is designed to inform business owners of the workers’ compensation insurance requirements in Florida so they can determine if they need to evaluate their business for coverage or obtain coverage. This article is not intended to analyze any particular business nor does it address the workers’ compensation claims process. The time for any business to determine whether it is obligated to have workers’ compensation insurance in place is before the Division imposes a stop-work order, initiates an investigation, or imposes penalties on the business. Like most business matters being proactive on a legal requirement such as workers’ compensation insurance can save the business a great deal of money later.

1. Does your business require workers’
compensation insurance
In Florida if your business is not in the construction industry and you have four or more regular
employees you are required by law to have workers’ compensation insurance.
Whether a person working for your business qualifies as an employee for workers’ compensation
purposes and whether an owner or worker qualifies for an exemption is an assessment to perform
with your attorney before you receive a stop-work order or records request from the Division of
Worker’s Compensation of the Department of Financial Services.
Take the opportunity to assess your coverage
obligation now
This article is designed to inform business owners of the workers’ compensation insurance
requirements in Florida so they can determine if they need to evaluate their business for coverage or
obtain coverage. This article is not intended to analyze any particular business nor does it address
the workers’ compensation claims process.
The time for any business to determine whether it is obligated to have workers’ compensation
insurance in place is before the Division imposes a stop-work order, initiates an investigation, or
imposes penalties on the business. Like most business matters being proactive on a legal
requirement such as workers’ compensation insurance can save the business a great deal of money
later.
Construction industry versus non-construction
industry
Under Chapter 440 in the Florida Statutes known commonly as the Workers’ Compensation Law
there is a significant difference and distinction between businesses involved in the construction
industry and those that are not.
Under Section 440.02(8) in the Workers’ Compensation Law the definition of the construction
industry includes businesses that build structures and clear, fill, or excavate land. Rule 69L-6.021 of
the Florida Administrative Code contains a comprehensive list of construction industry classification
codes on which the Worker’s Compensation Division relies to determine if a business is in the
construction industry.

2. Non-construction industry businesses are all those that do not fall within the definition of
construction with the exception of agricultural businesses. The distinction logically being that
construction industry operations have a greater risk of exposing workers to injuries as compared to
other businesses. Therefore construction businesses with one or more employees including the
owner must have workers' compensation coverage in Florida.
Am I exempt as the business owner from worker’s
comp requirements
Business owners can exclude themselves as employees of their business for purposes of worker’s
compensation but they are not automatically exempt. Managers or members of a limited liability
company depending on whether it is manager-managed or member-managed and directors and
officers of corporations may file a Notice of Election application online with the Division to exempt
themselves from the insurance requirement.
Florida’s Workers’ Compensation law defines the scope of the corporate officer for an LLC or
corporation in Section 440.02(9). It clarifies that a member who holds at least a 10 percent interest in
a limited liability company may qualify as a corporate officer for exemption purposes. The
exemptions are issued to the individual not to the business so the application should be made by
the individual corporate officer.
How do I know if I have four or more employees if I
use independent contractors
Section 440.02(5) within the Workers’ Compensation Law defines an employee as one who receives
payment from the employer for any work under any form of agreement whether oral or written. That
means that for workers’ compensation purposes an employee is defined very broadly.
The term employee under Florida’s Workers’ Compensation Law does not include an independent
contractor outside of the construction industry as the Workers’ Compensation Law defines that
industry. But in order to qualify as an independent contractor for those purposes some elements
must be present such as the contractor must be a separate business and have its own equipment,
must have a Federal EIN number, must receive payment to the business, should have a bank
account in its name, can have the freedom to work for others, and could have bid on the work to be
performed.
Even if the initial criteria delineated by the Workers’ Compensation Law to qualify a worker as an
exempt independent contractor are not sufficiently present the person may still be considered
exempt from the requirement to obtain workers’ compensation insurance. For example if the
contractor performs work for a specific amount of money and controls the method by which the
work is performed or is responsible for the expenses related to the performance of the work then
they may still be an exempt independent contractor.
Additionally if the party performing the work is responsible for completing the work, is on a

3. commission basis, or makes a profit on the work performed, then the individual can still be
considered an exempt independent contractor for workers’ compensation purposes. With regard to
those who work on commission Florida’s Workers’ Compensation Law makes it clear at Section
440.02(15)(d)(2) that a real estate agent working on commission is not considered an employee for
workers’ compensation purposes.
What is the effect of failing to obtain workers’
compensation insurance in Florida
There are three significant impacts to a business that fails to obtain workers’ compensation
insurance what it is required to do so. The first is that it will have to obtain such insurance quickly that
may result in a substantially more expensive premium then had the business obtain the insurance at
an earlier time.
The second impact to a business that must and fails to obtain workers’ compensation insurance is
that it may incur expenses in responding to Division requests for information or even from a stop-
work order. If a business violates a stop-work order it becomes liable for a penalty of $1000 per day
under Section 440.107.
Lastly an employer that fails to obtain or maintain workers’ compensation insurance when legally
required to do so may not defend any lawsuit for an employee’s injury or death on the basis that the
injury was caused by the negligence of another employee, that the employee assumed the risk of
the injury, or that the employee’s own comparative negligence contributed to the injury. The effect of
this part found at Section 440.06 in Florida’s Workers’ Compensation Law may make it next to
impossible for the business to defend an injury claim by an employee.
What should your business do if you are
investigated
The Division will generally send a request for production of business records to obtain the necessary
information to evaluate whether your business is required to or does have proper workers’
compensation insurance. Working with your business attorney you can produce the necessary
records with confidence that those are all confidential under Florida law.
Probably the worst decision your business can make is to not respond to a request for production of
business records as it will likely lead to a stop-work order. In the event that the Division issues such
an order before or after a records request you should contact your business attorney immediately
upon receipt of that order.
Even if your business is required to have a workers’ compensation insurance policy in place and fails
to do so your business can still qualify for penalty reductions and credits. The Division will credit the
amount your business pays for its policy premium. Also if your business meets certain requirements
such as timely providing requested records it can even qualify for an additional 25 percent discount
of the penalty that the Division will assess.

4. The takeaways on workers comp for your business
Certain businesses in Florida are required by law to have workers’ compensation insurance. Failure
to do so may result in financial penalties greater than the expense of simply obtaining the insurance.
Waiting until the Division of Worker’s Compensation of the Department of Financial Services
investigates your business and determines that it was required to and failed to obtain the
appropriate coverage is not the best time to evaluate that requirement. The take away here is to
save your business money by proactively evaluating whether you need workers’ compensation
insurance and to obtain that coverage if you do.
Written by expert business lawyer David Steinfeld
David Steinfeld is one of the few Board Certified business law experts
in Florida. He has been licensed for over 25 years. He is AV-Preeminent
rated, ranked as one of the Best Lawyers in America by U.S. News and
World Report, and consistently named a Florida Super Lawyer and one
of Florida’s Legal Elite. Dave has also received Martindale’s prestigious
Judicial Edition Award for high reviews by Judges, its Platinum Client
Champion Award and has a 10.0-Superb rating on AVVO as well as a
10.0 rating on Justia, lawyer reviews websites.
Check out business lawyer David Steinfeld online for helpful videos and articles on Florida business
law, real estate disputes, and electronic discovery solutions for your business. This article is provided
for informational purposes only.
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