Understanding Workers Compensation in Florida

Worker’s compensation is a tricky subject for any location and any industry, but in Florida it can be particularly difficult. Statutes particular to this great state add a level of complexity when accounting for everything from your industry to the number of employees on your payroll.

Defining “employee” can even be difficult for a new or small business. Here’s the basic breakdown of Florida’s complex definition structure:

  1. The partner or sole proprietor who devotes full time to their business, who is not in the construction industry and agrees to be defined as an employee.
  2. A partner or sole proprietor engaged in the construction industry.
  3. Anyone working for the construction industry as a subcontractor, except those who choose to be exempted from the categorization as an employee.
  4. Independent contractors working in construction. (Those not engaged in this industry are not considered employees under the law.)

This brings up the question of whether or not you need worker’s compensation insurance as a small business if you only have a couple of “true” employees. If you’re in the construction industry, a single employee under your contract means you need worker’s compensation insurance; for other industries it’s a little different. While this varies from state to state, everywhere from three to five employees, in Florida any business with four employees or more needs coverage. Failure to secure workers’ compensation coverage can result in a Stop-Work Order and the employer will be fined a minimum of $1,000 for the order to be released.

As mentioned above, there are exemptions that can keep this from being necessary: should the sole proprietor of a small non-construction business opt for exemption from the category of employee, he could skirt past the requirement, but this is hardly ideal. If your business includes yourself and three employees—making your exemption the one thing standing between your business and worker’s comp—it’s probably a good idea to have it, or at least be prepared to obtain it. If your business does well and you find yourself in need of another pair of hands, the coverage will not only be required, you’ll have to obtain it before you’re legally permitted to hire another employee.

Again, the construction industry has some different requirements than others. In this case, you need to have worker’s compensation coverage regardless of the size of your staff: if you have even one employee you’re required by law to have worker’s compensation insurance.

Thankfully, there are multiple ways to obtain the coverage your business needs, regardless of industry. The Chief Financial Officer of Florida offers these options:

  • Purchase a policy from an insurance agent from an approve insurance company
  • From the Division of Worker’s Compensation, if you quality as an individual self-insured
  • Obtain coverage from the Joint Underwriting Association
  • Contract with an employers’ organization that offers secured worker’s compensation coverage

Worker’s compensation insurance protects you and your employees in case of injury or other physical harm that could be caused on the job. You can get a concussion working retail just as easily as you can working a construction site, so make sure your business has the kind of coverage it needs to make sure everyone is taken care of even after a genuinely rough day at work.