Workers’ compensation coverage is meant to protect employees injured on the job. Regardless of how the injury is sustained, employees are covered. This benefit is provided on the agreement that the employee cannot sue the business for the injury because they are already being compensated.
There are, however, instances where business owners or CEOs are exempt from workers’ compensation coverage. In addition, many businesses and common professions are also exempt from the benefit of workers’ compensation, and here are three of the main types.
Independent and Contract Workers
Because these types of businesses are made up of one person contracting their services out for a fixed price, they are not considered employees of the clients they serve. Most contractors and independent workers have deemed business entities of their own, so the businesses that hire them aren’t obligated to provide any benefits.
It is not only workers’ compensation that these professions are exempt from. They don’t receive health insurance contributions, nor are there any retirement plans put in place on behalf of their employer. However, they are their own boss, so they need to worry about those types of costs.
Casual Work
Businesses that employ casual part-time or seasonal work staff may not need to pay for workers’ compensation insurance. Because they are not full-time staff, they are not technically employees in the traditional sense. The legal classification of occasional work is not mandated by law to protect those employees for workers’ compensation. It is dependent on how many hours they work in a given week. As long as the employee doesn’t work more than a minimum number of hours, the employer doesn’t have to pay for workers’ comp insurance.
Some businesses may choose to offer compensation to casual workers irrespective of the norm. For example, they may cover part of an employee’s medical bills or cover a portion of their usual wage. You should learn more about workers’ compensation insurance for different categories of employees, as well as other insurance information and coverages for any need.
Commission-Based Professions
Any worker whose salary is based purely on commission is excluded from workers’ compensation coverage. This includes real estate agents, certain sales representatives, and most of the entertainment industry. These types of businesses are not particularly exempt from being covered by workers’ compensation, rather, there is no legal requirement that says they have to be included.
There is a fine definition of what type of work constitutes a full-time employee that is eligible for company benefits. It also differs majorly by country and state. For example, in the US specifically, some members of the clergy and taxicab drivers are considered commission-based professions and are also exempt from workers’ compensation coverage.
Workers’ compensation coverage is beneficial for employees and businesses, but the type of profession will determine who is eligible for insurance. Therefore, workers who fall within these three categories need to be aware of their rights if ever a workplace injury is sustained.
Infographic created by MSA Meds, Offering MSA Professional Administrator Services
