Workers' Comp Insurance in Florida: What You Need to Know
If you’re an employer in Florida, there’s a good chance you’re required to purchase workers’ compensation insurance to protect your employees in the event of a work-related illness or injury. However, the policy specifications vary among different types of businesses and industries. Read on to learn more about workers’ compensation insurance in Florida.
How does workers’ compensation insurance in Florida work?
In Florida, workers’ compensation insurance is a state-mandated program that provides benefits, including coverage for medical care expenses, lost wages, and physical therapy, to employees who experience workplace injuries or illnesses. It’s a no-fault system, which means employees are entitled to these benefits regardless of who caused the accident.
In exchange, the staff member typically forfeits the right to sue their employer over the event. Let’s take a closer look at how this program works:
How many employees do you need for workers' comp in Florida?
Your industry will determine the minimum number of employees required to offer workers’ comp insurance:
Construction companies: Even one employee triggers the requirement.
Non-construction entities: Must have four or more full-time or part-time employees.
Agricultural businesses: Required for companies with six or more regular employees or 12+ temporary or seasonal employees working more than 30 days.
Who needs to have workers' comp insurance in Florida?
In addition to these entities, out-of-state employers who have staff members working in Florida are also required to maintain workers’ compensation insurance.
Who is exempt from workers' compensation insurance in FL?
According to Florida labor law, not every small-business owner is required to have workers’ comp insurance. The following individuals may be exempt, especially in non-construction businesses:
Sole proprietors and partners
Corporate officers
Members of a limited liability company (LLC)
An independent contractor in any field
Read more: Comprehensive Guide to Workers’ Comp Dividends
What are the requirements for workers' compensation insurance in Florida?
With the basics of Florida’s workers’ compensation insurance laws in mind, let’s explore the requirements for employers and employees:
Employer must carry workers' comp insurance
Most employers in Florida purchase a workers’ compensation insurance policy from an authorized private insurer and pay the annual premium in monthly or quarterly installments. However, large businesses with strong financial resources may apply to become self-insured, meaning the company directly covers claims when a worker is injured. This approach is riskier and requires state approval, as well as strict adherence to financial and security standards.
Employee must have a work-related injury or illness
To qualify for workers’ comp benefits, employees must suffer an injury or illness directly linked to their job. For example, if a worker falls at a jobsite and breaks their leg, insurance should offer full or partial coverage for medical bills, lost wages, physical therapy, and even vocational rehabilitation if the employee needs to find a different line of work due to an ongoing disability stemming from the incident.
Employees must meet the state's deadlines
In most cases, an employee must report workplace injuries within 30 days of the initial incident. Then, the employer has seven days to report the injury to their insurance carrier. That being said, the statute of limitations in Florida is two years from the date of the injury.
If your claim is denied or you don’t receive the benefits you deserve, an attorney specializing in workers’ comp can be your greatest ally. A qualified lawyer can help you negotiate your settlement and advocate for appropriate compensation.
Related: Time Theft: What It Is and How To Prevent It
How much does workers compensation insurance cost per employee?
Use the following steps to determine how much you can expect to pay for workers’ comp insurance in Florida:
1. Determine the class code
The National Council on Compensation Insurance (NCCI) assigns a class code to each type of job that reflects the level of risk for that position. The higher the risk, the higher the premium rate per $100 of payroll. In other words, you can expect to pay more for construction workers than for clerical staff.
2. Estimate the premium rate for the class code
Florida sets base rates for each class code. Here are estimates of a few common class codes to help you better understand the average premium costs:
Low-risk clerical workers: Around $0.30 per $100 of payroll
Moderate-risk retail staff: Around $1.20 per $100 of payroll
Very high-risk roofers: Around $20.00+ per $100 of payroll
The actual premium may be adjusted based on your company’s past claims history (also known as your experience modification factor or MOD) and credits or debits for safety programs and additional risks.
3. Calculate the annual payroll for each employee
Use the formula below to calculate each employee’s annual premium:
(Annual Payroll ÷ 100) ⨉ Class Code Rate ⨉ MOD Factor (if applicable) = Premium
Now, let’s use this formula to compare the premium rates for a receptionist and a roofer who both earn an annual wage of $50,000 at a company with no existing MOD factor:
Receptionist: ($50,000 ÷ 100) ⨉ $0.30 = $150 annual premium
Roofer: ($50,000 ÷ 100) ⨉ $20 = $10,000 annual premium
As you can see, the MOD factor can have a significant impact across different industries.
Related reading: What Is a Workers’ Comp Audit?
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