A Florida workers’ compensation exemption lets a qualifying corporate officer or LLC member opt out of being covered under the company’s workers’ comp policy. You apply online through the Florida Department of Financial Services by submitting a Notice of Election to Be Exempt, pay a $50 fee if you work in construction, and the exemption lasts two years. The rules and the stakes are different depending on whether your business is in construction.
Who Can Get an Exemption
Only corporate officers and LLC members are eligible. The specific limits depend on your industry.
Construction
No more than three corporate officers, or three LLC members, per company or group of affiliated companies can be exempt. Each applicant must own at least 10 percent of the business.1Florida Department of Financial Services. Construction Industry Corporate officers must be shareholders holding at least 10 percent of the stock and be listed as officers with the Florida Division of Corporations.2Online Sunshine. Florida Statutes 440.02 – Definitions
Sole proprietors, partners, and independent contractors performing construction work are treated as employees by default under Florida law, which is why the exemption matters so much in this industry. The statute lets sole proprietors, partners, and corporate officers in construction elect an exemption by filing the required notice with the Division of Workers’ Compensation.3Florida Department of Financial Services. Workers’ Compensation Exemptions
Non-Construction
There is no cap on how many corporate officers of a non-construction company can be exempt. Up to ten LLC members can hold exemptions, and each member must attest to owning at least 10 percent of the company.4Florida Department of Financial Services. Non-Construction Industry
Sole proprietors and partners in non-construction businesses are not considered employees under Florida law unless they voluntarily elect coverage, so they generally don’t need an exemption at all.2Online Sunshine. Florida Statutes 440.02 – Definitions
Other Baseline Requirements
Your corporation or LLC must be active with the Florida Department of State, Division of Corporations. You can’t have an active stop-work order or a working-in-violation case with the Division of Workers’ Compensation.4Florida Department of Financial Services. Non-Construction Industry Construction applicants with an outstanding insufficient payment on file are also ineligible.5Florida Department of Financial Services. Key Coverage and Exemption Eligibility Requirements
When Coverage Is Required in the First Place
Non-construction employers must carry workers’ compensation once they have four or more employees. Construction employers must carry it with just one employee.2Online Sunshine. Florida Statutes 440.02 – Definitions For a solo construction officer, the exemption is often what stands between having to buy a full policy and paying nothing at all.
How to Apply
The application is entirely online through the Florida Department of Financial Services portal. There is no paper form. You file a Notice of Election to Be Exempt, and you must sign it personally and attest that the information is accurate. Letting someone else sign for you can be charged as a third-degree felony.3Florida Department of Financial Services. Workers’ Compensation Exemptions
Have this information ready before you start:
- Your full legal name, date of birth, last four of your Social Security number, and a valid driver’s license number (any state) or Florida ID card number.
- Your company’s legal name, FEIN, and Florida Department of State document number.
- Your title and ownership percentage.
Construction exemptions carry a non-refundable $50 fee. Non-construction exemptions are free.1Florida Department of Financial Services. Construction Industry The Division of Workers’ Compensation reviews the application and, if approved, issues a Certificate of Election to Be Exempt.6Florida Department of Financial Services. Notice of Election to Be Exempt
What You Give Up
An approved exemption pulls you off the company’s workers’ comp policy. Your salary drops out of the payroll figure insurers use to price premiums, which can meaningfully lower cost. In exchange, if you’re injured on the job, you have no workers’ comp benefits at all: no medical coverage under the policy, no lost wages, no permanent disability payments.
The exemption covers only the individual named on the certificate. It does not change your obligation to cover your employees, and it does not affect their benefits.
Term, Renewal, and Revocation
An exemption is valid for two years from its effective date.6Florida Department of Financial Services. Notice of Election to Be Exempt Let it lapse and you lose exempt status. For a construction officer, that means being classified as an employee again the moment the certificate expires. Renewal runs through the same online portal, so build in a buffer rather than filing on the last day.
To end an exemption before it expires, use the Department of Financial Services revocation portal. Only the person named on the certificate, or a corporate officer of the same business listed with the Division of Corporations, can file the revocation. If you’re an officer working as a subcontractor, you must also notify your general contractor when you revoke, because your coverage status can flow back onto them.7Florida Department of Financial Services. Revoke Exemption
How Exemptions Affect Contractors and Subs
Under Florida law, a contractor who hires a subcontractor without workers’ comp coverage becomes liable for coverage of that subcontractor’s employees, as if everyone worked for the same business. A valid exemption certificate is what resolves this on the sub side. If the sub’s officers are properly exempt and there are no other workers, the general contractor’s exposure is typically closed out. If there are other employees and no policy, the GC pays. The statute allows the GC to recover from the non-compliant sub afterward, but that’s slow.8Online Sunshine. Florida Statutes 440.10 – Liability for Compensation
Practical takeaway: if you’re a subcontractor operating under an exemption, expect every general contractor to ask for your certificate before you set foot on the site. Keep a current copy on hand.
Penalties for Getting It Wrong
The Department of Financial Services can issue a stop-work order that halts all business operations immediately if an employer fails to carry required coverage.9Florida Senate. Florida Statutes 440.107 – Department Powers to Enforce Employer Compliance The financial penalties on top of that:
- Continuing to operate in violation of a stop-work order: $1,000 per day.9Florida Senate. Florida Statutes 440.107 – Department Powers to Enforce Employer Compliance
- Failure to carry required coverage: twice the premium that should have been paid over the prior two years, or $1,000, whichever is greater.9Florida Senate. Florida Statutes 440.107 – Department Powers to Enforce Employer Compliance
- Misclassifying employees as independent contractors: $5,000 per misclassified worker.9Florida Senate. Florida Statutes 440.107 – Department Powers to Enforce Employer Compliance
Florida also polices misuse of the exemption itself. An employer who pressures or coerces a worker into obtaining an exemption as a condition of employment commits a first-degree misdemeanor. Presenting a false or fraudulent exemption certificate is treated as insurance fraud, charged as a third-, second-, or first-degree felony depending on the dollar amount involved, and applies to anyone who knowingly presents a fraudulent document, not only the person named on it.10Online Sunshine. Florida Statutes 440.105 – Unlawful Acts; Penalties