Workers’ compensation is an important beneficial program that compensates injured workers, providing both medical coverage and a portion of their lost wages. The benefits are awarded only on the basis of a medical chart review that can establish the injury or illness, which ensures that only genuine cases get paid. In the United States, state workers’ compensation laws cover most employees but there are some exceptions to the rule. Some US states have special workers’ compensation programs for fire-fighters and law enforcement employees. For example, New York City police officers, fire-fighters, and sanitation workers who are covered under provisions of the New York State General Municipal Law are excluded from workers’ compensation coverage. Fire-fighters and uniformed police officers in other municipalities may also be excluded.
The employer-employee relationships in connection with workers’ compensation in the US are complicated by agencies such as industrial commissions, courts, IRS, and state statutes. The definition of employer-employee relationship varies with each of these agencies. The requirements of workers’ compensation do not apply to certain “employment” situations and arrangements. To determine whether an employment relationship exists, most state workers’ compensation laws consider certain factors.
- Whether you work exclusively for the company or have other clients
- Whether you have mandatory work hours
- Whether you independently market your services to the public
- Who owns the materials/tools necessary for your work
- Whether you are free to turn down a job request
Here are some scenarios that may not require the employer to provide workers’ compensation coverage.
When there are fewer employees than required by statute
39 states and the District of Columbia require every employer with one employee or more to provide workers’ compensation coverage. 11 states allow employers to do without coverage until they exceed a certain “threshold” number of employees. Some of these “threshold” states lower the threshold number of employees if the employer comes under a contractor classification or involves contact with ionizing radiation. When the number of employees falls below the required number as specified by the state (typically it is between 3 and 5), workers’ compensation coverage is not mandatory. The eleven states with a threshold number more than one are as follows:
- Alabama – 5+
- Arkansas – 3+
- Florida – 4+
- Georgia – 3+
- Mississippi – 5+
- Missouri – 5+
- New Mexico – 3+
- North Carolina – 3+
- South Carolina – 4+
- Tennessee – 5+
- Virginia – 3+
Among these, five states lower the threshold number if the insured is within a construction classification – Arkansas (2+); Florida (1+); Missouri (1+); New Mexico (1+); Tennessee (1+).
Workers typically excluded from coverage
Let us look at the workers who are excluded from the workers’ compensation program. Workers who come under one of these categories may not be eligible for benefits, though some employers do voluntarily provide coverage for these workers. The rules for exceptions vary from one state to another. Some common exceptions include the following.
- Seasonal/casual workers
- Farm/agricultural workers
- Ministers/clergy members
- Domestic workers and part-time babysitters
- Taxi drivers
- Commissioned real estate agents
- Some taxicab drivers
- Professional athletes
- Volunteer ski patrol employees
- Officers of non-profit associations and corporations
- Athletic contest officials
- Newspaper resellers
- Direct sale people
As providers of medical record review for attorneys handling workers’ compensation cases, we know that an experienced workers’ compensation lawyer can help the claimant determine his/her eligibility for benefits. In other words, injured workers have more of a chance to obtain benefits with adequate legal representation.
Casual labor excluded from workers’ comp coverage
Workers’ compensation is not required for casual labor in almost all states in the US, which is unlike countries such as Australia. In Australia, workers’ compensation is a compulsory statutory form of insurance and all workers – full-time, part-time, and casual are covered under this program. This insurance is required from all employers in all Australian states and territories. In Canada also, most states cover full-time, part-time, temporary and casual workers.
Coming back to the US context, each state applies different requirements to the exception such as:
- Just define casual labor and exclude the requirement to provide protection. Some states qualify this definition using terms such as “irregular,” “brief,” “occasional,” “sporadic,” or “infrequent.”
- Assign a number of “casual employees” allowed.
- Assign a maximum dollar limit that can be paid or a maximum number of days the job can last before the work is no longer considered “casual.” For example, Colorado excludes casual maintenance/repair work for a business for less than $2000 per calendar year from coverage.
Typically, casual labor is defined as work that is not in the usual course of business, occupation, trade, or profession of the employer. This would include for instance, relationships such as a manufacturer hiring a landscaping company for maintenance of the grounds, or an insurance agency hiring a painter to paint the office. Contractors or casual employees such as these are not doing duties that would normally be done by an employee in the above mentioned offices. They are casual laborers performing work outside the normal operational requirements of the employer, or those who do not directly promote or advance the employer’s business or operation.
A small number of states including Wyoming and Idaho do not pay any benefits to undocumented workers.
It is important to understand that state workers’ compensation laws do not cover federal employees. These employees are covered under the Federal Employees Compensation Act (FECA). A special division of the U.S. Department of Labor known as the Office of Workers’ Compensation Programs processes the claims of federal government employees and determines whether they are eligible for the benefits. Another thing to note is that federal laws have special procedures designed for certain category of workers such as:
- The Jones Act for employees working on a boat or ship
- The Longshore and Harbor Workers’ Compensation Act (LHWCA) for other maritime workers
- The Federal Employer’s Liability Act (FELA) for railroad workers
Under these Acts, benefits offered are different, and claims processes are also different.
Workers’ compensation is no doubt a valuable program for US workers, providing them with the much needed sustenance at the time of need. However, to ensure a hassle-free claim processing and award of the due benefits, it is important that all medical records related to the injury or illness are in order for medical chart review.