Do Small Businesses Have To Carry Workers' Compensation?

Were you supposed to be covered by workers' compensation while working for a small business but found out you weren't? Here's what you should know.

Legal Requirements Vary by Location

As an employee, it's important to understand that workers' compensation insurance laws vary depending on your location. Each jurisdiction has its own regulations that determine whether employers are required to carry workers' compensation coverage or not.

In some states, all businesses must provide workers' compensation insurance. However, in other places, the requirements for workers' compensation coverage may depend on factors such as the number of employees or the nature of the business. Others may have specific exemptions or reduced requirements for certain industries or types of employment. 

Employee Count and Classification Matter

As an employee seeking workers' compensation coverage, it's essential to understand how the number of employees and their classification can affect your eligibility for benefits. The threshold for mandatory coverage may vary, with some jurisdictions applying it even to businesses with just one employee. In such cases, your employer should have workers' compensation coverage, and you would have the right to file a claim if you experience a work-related injury or illness.

The classification of workers can also impact their eligibility for workers' compensation benefits. Some jurisdictions may exempt independent contractors or domestic workers from mandatory coverage. Employees must understand their classification and how it relates to workers' compensation coverage.

Exceptions and Exemptions Exist

Employees must be aware that certain exceptions and exemptions regarding workers' compensation coverage may exist. Depending on the jurisdiction and specific circumstances, some small businesses may be exempt from carrying workers' compensation insurance.

For example, some jurisdictions may exempt businesses with only family members as employees or sole proprietors without any employees. In addition, certain industries, such as agriculture or small-scale startups, may have specific exceptions or reduced requirements.

If you work for a small business or fall within an exempt category, it's crucial to understand whether your employer is still legally required to provide workers' compensation coverage. Remember that while exemptions may exist, workers' compensation insurance provides important protection for employees.

Therefore, even if your employer is exempt, it's worth considering discussing the option of voluntary coverage with them or seeking alternative avenues for protection. If you have any questions about whether you should have been covered or how to receive compensation if your employer didn't carry the required coverage, contact a local workers' compensation lawyer to schedule a consultation.