Florida construction workers' comp exemption: who qualifies and how to apply

Suppose three partners run a small roofing LLC. Each owns a third, each appears in the company's Sunbiz record, and none of them has hired anyone yet. A property manager asks for proof of workers' compensation before the first job. Under Florida law the three owners count as employees of their own company, so the answer is either a policy or an exemption certificate for each of them.

Who counts as an employee in Florida construction?

Section 440.02 of the Florida Statutes brings most private employers into the workers' compensation system at four employees, and construction employers at one. It counts a corporate officer who works for the corporation for pay as an employee, and it counts a sole proprietor or partner in construction as an employee too. Construction, in the statute, means for-profit activities involving "building, clearing, filling, excavation, or substantial improvement" of a structure or of land.

Who qualifies for a construction exemption?

An exemption takes one owner out of the count. Section 440.02 says an officer who elects it is not an employee, and section 440.05 says that officer may not recover benefits under the workers' compensation law. The Division's construction industry exemption page lists who can apply:

• The corporation or LLC is registered and active with the Florida Department of State, Division of Corporations.
• A corporate applicant is listed as an officer in the Department of State's records.
• The applicant attests to owning at least 10 percent of the company.
• No more than three officers of the company, or of any group of affiliated companies, are exempt.
• The applicant pays a $50 fee and is not affiliated with an active stop-work order.
• The applicant has a valid driver license, which the Division treats as valid if it has not been expired for more than 30 days.

The Division's rule 69L-6.012 adds one more condition: if the trade needs a contractor license under chapter 489, the business name on the license must match the company name on the application.

How does the 10 percent ownership rule work?

Section 440.02 requires construction officers who elect the exemption to be shareholders, "each owning at least 10 percent of the stock," and to be listed as officers with the Division of Corporations. For an LLC, the statute's definition of a corporate officer includes a member who owns at least 10 percent of the company.

The three-officer cap reaches across related companies. Section 440.02 treats companies as affiliated when they are under the same or substantially the same control, and it makes one company's controlling interest in another, or a pooling of equipment or income, prima facie evidence of affiliation. Suppose four owners hold 25 percent each of a plumbing company. Three of them can be exempt. The fourth is an employee under the law, and the company needs a policy that covers him.

How do you apply with the Division of Workers' Compensation?

The application is the Notice of Election to be Exempt, Form DFS-F4-DWC-250, filed online through the Apply or Renew link on the Division's construction page. Section 440.05 sets out what it asks for:

1. 1Your name, date of birth, and driver license or Florida ID number.
2. 2Every certified or registered chapter 489 license you hold.
3. 3The company's registration number with the Division of Corporations, the federal tax identification number of each company that employs you, and your ownership percentage.
4. 4Certifications that you are not entitled to benefits, that the election stays within the officer limits, that the company's employees are covered, and that you completed the Division's online coverage and compliance tutorial.

You sign it yourself. Rule 69L-6.012 adds a convenience fee for electronic payment on top of the $50. An incomplete notice comes back with a deficiency notice, and you have ninety days to fix it without a new fee; after that it is denied, and a fresh application costs another $50. The election takes effect when the Division issues it or 30 days after the Division receives it, whichever comes first, and the rule requires you to print the certificate. The certificate names the company, and section 440.05 requires a new one each time you work for a corporation not listed on it.

How long does an exemption last?

Two years. Section 440.05 makes a certificate valid for 2 years after its effective date, puts both dates on its face, and has the Division send an expiration notice at least 60 days ahead. A renewal costs $50, and rule 69L-6.012 sets when the new certificate starts:

Filing in the last 90 days renews without losing time. Filing late leaves days with no certificate at all.

An exemption can also end early. The Division revokes a certificate when its holder no longer meets the requirements, and the rule dates that revocation to the day the company becomes dissolved or inactive. A company dissolved on Sunbiz loses its officers' exemptions on the same day; our guide to keeping a Florida LLC active covers the annual report that prevents it.

Why do property managers ask for an exemption certificate?

For a contractor who hires you, the law requires it. Section 440.10 makes a contractor that sublets work liable for compensation to the subcontractor's employees unless the subcontractor has secured it. It says a contractor "shall require a subcontractor to provide evidence of workers' compensation insurance," and that a corporate subcontractor with an exempt officer must provide a copy of the certificate. Property managers run the same check: our vetting guide for managers has them look up a policy or each owner's exemption before the first job.

They can check without asking you. The Division's coverage and exemption brochure lists an Exemption Database for verifying an exemption, and a Construction Policy Tracking Database that sends registrants automatic notices when a tracked contractor's policy or exemption status changes.

The certificate covers only the officer named on it, so anyone you hire still needs a policy. Our guide to certificates of insurance covers the rest of the file a manager expects.

When you apply to 1Stop's vendor network, HQ calls, then checks your certificate of insurance, W-9 and any state license your trade needs before work is assigned. Vendors pay no listing fee, lead fee or percentage.

Put the exemption's expiration date on the same calendar as your policy renewal and your annual report. A lapse on Sunbiz ends the exemption before the date printed on it.