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Updated: November 30, 2023
Most Maine businesses are required to carry workers’ compensation insurance, but understanding everything that is required can take some time. In this guide, we’ll cover the basics of who should receive coverage and how businesses can obtain a policy.
Workers’ compensation might be considered a “win-win” for both employees and employers in the state of Maine. On the one hand, should an employee experience a work-related injury or occupational illness, workers’ comp can provide medical benefits and partial income replacement should they need to miss time. For employers, it can also provide peace of mind. That’s because, in most cases, it offers the company protection from legal claims that might arise if an employee gets sick or injured while working.
Almost all businesses that have one (1) or more employees in Maine are required to have workers’ compensation insurance. The Maine Workers’ Compensation Board is responsible for ensuring compliance with workers’ comp laws in the state and serves both employees and employers.
Though most employers are required to have a workers’ comp policy, some exceptions do exist.
A bona fide owner of at least 20% of the outstanding voting stock of a corporation may waive in writing all the benefits provided by workers’ compensation for themselves. To do this, the owner needs to complete this waiver form and receive approval.
The parent, spouse, or child of a sole proprietor, partner, or bona fide owner of 20% of the voting stock may waive in writing all the benefits provided by workers’ compensation. Similar to the corporate exemption, a waiver form needs to be completed and approved.
Are you a sole proprietor without employees? Having workers’ comp is not required under the Workers’ Compensation Act. A sole proprietor does not need to fill out waiver forms to be exempt from coverage.
There is also an exception for “owners” of limited liability companies, who do not have to fill out a waiver form. However, the parent, spouse, and/or child of a member of a limited liability company who is employed by that LLC may waive in writing all benefits provided by workers’ compensation for themselves.
Unless specifically included among those for whom workers’ compensation insurance has been purchased, duly elected or appointed executive officers of charitable, religious, educational, or other nonprofit corporations are not covered by workers’ compensation insurance.
If you hire independent contractors, they are typically not covered by workers’ compensation. An independent contractor is a person who performs services for another under contract (and generally has several clients). Learn more in our guide to employees vs independent contractors.
Another exception is if you have domestic workers in a private home.
Companies who need to purchase a policy have different options.
In some cases, obtaining workers’ compensation insurance can be challenging or not possible at all. This can sometimes be true if your business is new and has no record of claims experience or if the business is one in which accidents are a frequent occurrence. If your business is having trouble obtaining worker’s compensation coverage, the Maine Employers Mutual Insurance Company (MEMIC) can be an option. Under Maine state law, MEMIC is required to provide coverage to employers that cannot obtain a policy anywhere else
Not having a policy in place can trigger some less-than-desirable outcomes: .
Having a workers’ compensation policy in place makes good business sense because it helps keep your company compliant with Maine laws and provides peace of mind to your team. For employees, it ensures they’ll be covered in the event of work-related illnesses or injuries. As an employer, you can avoid legal problems arising from workplace accidents or sickness. If you have any questions about obtaining a policy, our team is here to help.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.