ATTENTION LLC’S: IMPORTANT WORKERS’ COMP CHANGES COMING JULY 1ST

If your business is a Limited Liability Company (LLC) that is not involved in the construction industry, you will be affected by an upcoming change in the Florida workers’ compensation law. Effective July 1st, the law in Florida will change, and owners of non-construction LLC’s will be considered to be employees for workers’ comp purposes. This means all non-construction LLC owners (also called “members” or “managing members”) have to be covered by a workers’ compensation policy or have a valid exemption issued by the Division of Workers’ Compensation.

If your non-construction LLC already has a workers’ compensation policy: Starting July 1st, the payroll for all owners/managing members will be included on your workers’ comp policy, unless they have already received an exemption. This can result in an increase in your yearly insurance premium.

LLC owners who wish to be covered by their workers’ compensation policy do not need to apply for an exemption but should let their insurance carrier know they want to be covered.

LLC owners who want to opt out of workers’ compensation coverage for themselves need to apply for and receive an exemption from the state before July 1st. Please note: Under Florida law, anyone with a valid exemption from workers’ compensation is not eligible to receive workers’ comp benefits if he/she is injured in an on-the-job accident.

If your non-construction LLC does not already have a workers’ compensation policy: Florida law requires non-construction employers with 4 or more full-time employees to provide coverage for all employees. Starting July 1st, LLC owners will be considered “employees” and will be included in the employee count. An LLC with 3 employees and 2 owners will have 5 total employees on July 1st and will therefore be required to purchase workers’ comp coverage, if the LLC does not already have a workers’ comp policy. If an LLC owner receives an exemption from workers’ comp coverage, he or she will not count towards the employee total. So, in the example above, if the 2 owners apply for and receive exemptions prior to July 1st, the company will remain under the 4-employee threshold and therefore would not have to buy a workers’ comp policy.

If you are an owner/member/managing member of a non-construction LLC, and you wish to exempt yourself from workers’ compensation requirements, you will need to apply for and receive your exemption from the state Division of Workers’ Compensation prior to July 1st. The Division started accepting exemption applications from non-construction LLC owners April 1st, to allow enough time to process all applications prior to the July 1st deadline.

All exemptions must be applied for on-line at www.myfloridacfo.com/wc. Click on the tab marked “Employer” and then click on the box on the right-hand side of the screen that says “Apply for, Modify or Print an Exemption Certificate. You will need your Florida Drivers’ License Number or a Florida Identification Number as well as your Social Security Number, and the FEIN of your LLC. There is no cost to apply for the exemption, but it will need to be renewed every 2 years (renewal is also free).

If you have any questions about how this law change will affect your business, or about how to apply for an exemption, please call the FUBA offices at 800-262-4483 and ask for Karen or Lance.