Most employers in Florida are required to carry workers’ compensation insurance. We go into all the details to help businesses better understand what it covers and how to stay compliant.
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What should Florida employers know about workers’ compensation?
First and foremost, workers’ compensation helps protect both businesses and their employees from financial loss if an employee gets hurt while on the job or becomes sick because of a work-related incident. In most cases, this type of insurance covers medical expenses, lost wages, and rehabilitation costs for employees who are injured or become ill while on the job. In addition, employers can rest assured with coverage, as it generally protects them from lawsuits filed by employees related to work-related injuries or illnesses.
Is workers’ compensation mandatory in Florida?
Employers with as few as one (1) to four (4) or more employees conducting work in the State of Florida are required to provide workers’ compensation insurance. Specific employer coverage requirements are based on the type of industry, number of employees, and entity organization.
Construction businesses
Construction businesses of all sizes, even those with just one employee, are required to carry workers’ compensation insurance for every employee, including contractors they hire. In some cases, a construction company may be able to exempt up to three corporate officers if each can demonstrate ownership of at least 10% of the company. In addition, contractors are responsible for ensuring that their subcontractor provides coverage for their workers.
Agricultural employers
Agricultural businesses with six (6) or more regular employees and/or 12 or more seasonal employees that work for more than 30 days (but no more than a total of 45 days in a calendar year) are also required to provide coverage.
Who is exempt from workers’ compensation in Florida?
Though most FL employees are covered under state law, certain business owners and corporate officers may qualify for exemption under Florida Statutes Chapter 440, such as:
- Corporate officers, LLC members, or partners in non-construction businesses may elect an exemption by filing under Fla. Stat. § 440.05(1).
- Sole proprietors and partners in non-construction businesses are generally not considered employees under the law unless they opt-in, so they may not need to carry coverage for themselves under Fla. Stat. § 440.05(2).
- Independent contractors in non-construction industries may be exempt if they meet classification criteria under Fla. Stat. § 440.02(18)(d). 1099 classification alone does not guarantee exemption.
Exemptions that apply in non-construction settings may not apply, or may apply differently, in the construction industry, where coverage is required from day one under Fla. Stat. § 440.10(1)(a)-(b).
There’s also more information, links to start the process, and access to the online application on the Florida Department of Financial Services website.
| Business type | Coverage requirement |
| General | Must carry workers’ comp if they have four or more employees (full or part-time). |
| Construction | Must carry coverage for every employee, even if there’s only one. Contractors must also verify that subcontractors are covered. Up to three corporate officers can be exempt if each owns 10% or more of the business. |
| Agricultural employers | Must carry coverage if they have six or more regular employees or 12 or more seasonal employees working more than 30 days (but no more than 45) in a calendar year. |
| Exempt individuals | Sole proprietors and partners can opt out by filing a certificate of election to be exempt. |
Once coverage is required, employers often ask how much insurance is enough.
What is the minimum workers’ compensation limit in Florida?
Florida law does not set a universal minimum dollar-amount requirement that applies to all employers. Instead, businesses need to “secure the payment of compensation” as defined in Fla. Stat. § 440.10.
In a nutshell, this means your policy must be sufficient to cover Florida’s statutory benefits such as medical care, wage replacement, and death benefits. The required amount depends on your payroll and industry risk rather than a fixed minimum limit.
How can you get a workers’ compensation exemption in Florida?
In Florida, you may be eligible to receive an exemption from workers’ compensation coverage if you are a corporate officer, LLC member, sole proprietor, or partner under certain conditions according to Fla. Stat. § 440.05.
- You must submit a “Notice of Election to Be Exempt,” electronically to the Florida Department of Financial Services, listing your name, date of birth, valid Florida driver’s license or Florida ID number, ownership percentage, and certify that you’ve completed an online tutorial (Florida Statute § 440.05(3)(a)-(c)).
- Once approved, the exemption certificate is valid for two years and must be renewed every two years unless revoked. (§ 440.05(6)).
How to apply for workers’ compensation exemption in Florida?
To apply for an exemption, you’ll need to complete the process through the Florida Department of Financial Services’ online system. The steps include:
- Visit the official online portal for the “Notice of Election to Be Exempt”.
- Complete the required online tutorial and enter the confirmation code during your application.
- Submit the “Notice of Election to Be Exempt” electronically with all required information, including: business registration number, federal tax ID for each employer corporation, valid Florida driver’s license or ID number, ownership percentage, and certification that the business’s employees are covered under workers’ compensation insurance (Fla. Stat. § 440.05(3)).
- If your business is in the construction industry, pay the $50 fee required for the construction-industry certificate of exemption (Fla. Stat. § 440.05(8)(a)).
Now that we know more about the companies that need to carry coverage (or how to apply for an exemption), let’s find out how to purchase a policy.
Buying workers’ comp insurance in Florida
There’s different ways that employers may obtain workers’ compensation coverage in the sunshine state.
- A workers’ compensation insurance carrier
- An employee leasing arrangement with a professional employer organization (PEO) that has secured workers’ compensation coverage on behalf of its clients
- Self-insurance (individual or commercial)
The traditional method for setting up (and purchasing) workers’ compensation policies is to pay a lump sum upfront, but many employers now use pay-as-you-go plans that sync with payroll. With this option, premiums automatically adjust as you add or remove workers, and it’s a feature that most payroll service providers can help you set up.
How is workers’ compensation calculated in Florida?
Florida does not provide its own public classification rate tables or a specific premium formula in state-issued materials. Instead, carriers rely on the standard NCCI rating system to review an employer’annual payroll, assign the correct job classification for each employee, and factor in your claims history.
Premiums are typically calculated using the following formula:
- (Payroll ÷ 100) × Classification Rate × Experience Modifier = Premium
Keep in mind that higher-risk occupations usually carry higher classification rates, while clerical or administrative roles tend to fall into lower-risk categories. We should point out that past claims influence your modifier as well. A clean record can help lower your premium, while a history of claims may increase it.
In addition to compliance resources, we have tools that employers can use. For example, our free Florida payroll calculator makes it simple to figure out withholdings and deductions for any type of payment.
What happens if you don’t have workers’ comp in Florida?
There can be some undesirable outcomes if an employer does not have a workers’ compensation policy. For instance, failure to provide workers’ compensation insurance can result in a stop-work order that requires all operations to cease until a company is compliant and all penalties are paid. An employer that violates a stop-work order can face penalties of $1,000 per day from the Florida Department of Workers’ Compensation.
If a company does not have a policy, a penalty fee is typically two times the amount the business would have had to pay in insurance premiums over the previous two years.
Keep in mind that the employer is responsible to pay the entire premium for workers’ compensation insurance coverage, and employees do not share the costs. This detail is spelled out in Florida’s workers’ comp act.
When should an employee report an incident to me?
Employees should report any work-related incident to you immediately after it happens. However, if the worker does not communicate this information immediately after the incident occurs, most injuries must be reported within 30 days, according to Florida Statutes Section 440.185.
Going without coverage can cost more than a policy itself. Here’s what can happen if your business isn’t insured.
| Issue | Result |
| Operating without coverage | A stop-work order is issued requiring operations to cease until the business becomes compliant and pays all penalties. |
| Violating a stop-work order | Fines of $1,000 per day from the Florida Department of Workers’ Compensation. |
| Not carrying coverage | Penalty equal to 2× the insurance premiums that should have been paid over the past two years. |
| Deducting premiums from employees | Illegal, employers must pay the full premium cost themselves. |
More resources for Florida employers
If you would like additional information, below are additional resources to help you understand how workers’ compensation works in the state of Florida.
Workers’ comp helps with compliance
Having a workers’ compensation policy helps your business stay compliant in Florida, and it’s also the type of coverage that can make a big difference for you and your team. Workers can rest easy knowing that they will be taken care of in the event of work-related injuries or illnesses. And in the vast majority of cases, business owners are protected from litigation due to on-the-job accidents involving employee illness or injury. If you have any questions or need assistance setting up a workers’ compensation policy for your company, we’re 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.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.