Florida Workers Compensation Requirements for Employers

The worst compliance call I have taken from a Florida founder started with a sentence that sounded reasonable. He had two people on the payroll, he had read somewhere that the rule kicks in at four, and he ran a small roofing outfit outside Fort Myers. Construction is the one industry where the number is one.

He found out when a helper came off a ladder. Two weeks later a stop-work order was taped to the job site and the business stopped earning while the penalty got calculated from the payroll he had already run.

Florida is not a hard state to comply with. It is a state where the threshold depends on what you do, and where the owners themselves are inside the count unless they filed paperwork. This page covers those rules. If you want the mechanics of how workers compensation works as an insurance product, read our guide to workers compensation insurance first, then come back here for the Florida layer. For the broader state picture, see the Florida HR compliance guide.

Who Must Carry Coverage

Florida sets the coverage threshold by industry, not by a single statewide headcount. Section 440.02(20)(b) of the Florida Statutes defines covered employment as all private employment with four or more employees, and all private construction employment with one or more employees.

Agriculture runs on its own numbers. A farm falls outside covered employment only while it employs 5 or fewer regular workers and fewer than 12 other workers at one time for seasonal labor that finishes in under 30 days, provided that seasonal work does not exceed 45 days in the same calendar year. Cross any one of those lines and coverage is required.

Two counting rules catch small employers. Part-time, temporary and seasonal staff count exactly like full-time staff, so a shop with three full-timers and two weekend hires is at five, not three. And corporate officers and qualifying LLC members are employees under the statute, which means the owners are inside the count unless each of them holds a valid exemption certificate.

Government employment is covered with no threshold at all, and so are volunteer firefighters responding to emergencies. Out-of-state employers get their own instruction. The Florida Division of Workers’ Compensation states on its coverage requirements page that an employer working in Florida must notify its carrier of that work, and that a construction employer with one or more employees performing work in Florida must obtain a Florida policy through a Florida-licensed carrier.

If you operate in more than one state, the thresholds do not travel. Our roundup of workers compensation requirements by state is the place to compare, because a business that is exempt in Florida at three employees is often not exempt at three employees somewhere else.

Who Does Not Count as an Employee

Florida excludes a specific list of workers from the definition of employee or from covered employment, and everything not on that list counts. The exclusions live in sections 440.02(18) and 440.02(20), and the practical ones for a small employer are owners, domestic workers, casual labor and independent contractors.

The independent contractor test outside construction is a checklist, not a judgment call. At least four of six criteria must be met: a separate business with its own facility or equipment, a federal employer identification number or an application for one, payment made to a business rather than an individual, a business bank account, the freedom to work for others without an application process, and payment on a competitive bid or per-task basis. If four are not present, the statute still allows a fuller look at the relationship, but the burden of proof sits with the person claiming contractor status.

Getting that wrong is expensive in Florida in a way it is not elsewhere. The department may assess $5,000 for each worker an employer presented as an independent contractor who turns out not to be one. If any of your classifications feel borderline, our explainer on what an independent contractor is walks through the wider federal and state tests before you commit to a label.

Domestic workers in private homes sit outside covered employment entirely, which surprises people who employ a full-time nanny or housekeeper. Casual labor is narrower than it sounds: the work has to be both casual and outside your trade or business, and casual means a job expected to take 10 working days or less at a total labor cost under $500. A day laborer helping in your own shop is not casual labor.

Owner and Officer Exemptions

An owner who wants out of the system files a notice of election to be exempt with the Department of Financial Services under section 440.05, and the exemption only exists once the department issues the certificate. There is no such thing as an informal exemption, and a certificate belonging to one corporation does not cover the same person at a different one.

The filing is electronic and asks for the percentage of ownership, the corporate registration number, and every construction license the person holds. The applicant must certify that the company’s other employees are covered and must complete the department’s online coverage and compliance tutorial. A construction certificate carries a $50 fee. Certificates issued since the start of 2013 are valid for two years, with both dates printed on the face, and the department sends an expiration reminder at least 60 days out.

Timing matters more than most owners expect. An election becomes effective when the department issues it or 30 days after the department receives it, whichever comes first. An injury in that gap is treated as an injury to a covered employee, which is the outcome the exemption was meant to avoid.

Sole proprietors and partners outside construction sit outside the definition of employee already, and may elect to be included if they want benefits for themselves. In construction the default flips: the sole proprietor, the partners and the subcontractor’s working owner are all inside the system unless a valid exemption is on file.

Where Florida Employers Buy It

Florida has no state fund, monopolistic or competitive. Section 440.38(1) gives an employer two ways to secure the payment of compensation: insure with a stock company, mutual company, association or exchange authorized to do business in Florida, or qualify to pay claims directly as a self-insurer.

For a small business the first route is the only realistic one. Self-insurance means furnishing proof of financial strength to the Florida Self-Insurers Guaranty Association and receiving authorization from the department. The association can require a qualifying security deposit, and the employer has to show reinsurance at levels that keep it solvent, competent claims personnel, a safe working environment, and on request an actuarial opinion signed by a member of the American Academy of Actuaries valuing reserves at a 4 percent discount rate. That is a structure for a large payroll, not for a team of twelve.

Two intermediate options exist. Group self-insurance funds and commercial self-insurance funds, authorized under sections 624.4621 and 624.462, let similar employers pool risk under insurance regulation. An employee leasing arrangement is the other common route, because section 440.02(19)(a) makes the leasing company an employer for these purposes and coverage for the leased staff runs through it.

Two things move the price more than shopping does. The first is classification: premium is built from payroll by class code, and a misassigned code follows you until an audit corrects it. Our guide to the workers compensation audit covers what the year-end review actually examines. The second is the drug-free workplace credit, since section 627.0915 requires approved rating plans to give specific consideration to employers running a qualifying program under section 440.102. Ask your carrier what its approved plan pays for a drug-free workplace policy before you assume the discount is worth the administration.

Remote and hybrid staff are covered the same as anyone else, and the injury does not have to happen on your premises to be compensable. If part of your team works from home in Florida, our piece on workers comp for remote employees covers how those claims get evaluated.

Posters and Employee Notices

Every Florida employer that has secured coverage must keep a posted notice in a conspicuous place at each place of business. Section 440.40 requires the notice to state that the employer has secured the payment of compensation and to name the carrier, its address, and the expiration date of the policy.

A second notice has to appear alongside it. The Anti-Fraud Reward Program notice states that rewards of up to $25,000 may be paid for information leading to the arrest and conviction of persons committing insurance fraud, including employers who illegally fail to obtain coverage. Rule 69L-6.007 of the Florida Administrative Code prescribes the poster form, printed on 11 by 17 inch stock, and allows the anti-fraud language to hang as a separate sheet attached to the poster.

This one carries a criminal edge that most posting rules do not. Under section 440.105(3)(a), an employer who knowingly fails to post notice of coverage under section 440.40 commits a first-degree misdemeanor. A separate rule runs the other way: section 440.055 requires an employer with fewer than four employees who is permitted to elect out and does so to post written notice at each worksite telling everyone there that they are not entitled to benefits under the chapter.

Florida does not require a workers compensation pamphlet in the new hire packet. The employee-facing documents are triggered by an injury instead, and the schedule below sets out who sends what. The wider set of state and federal notices that do belong on your wall is covered in our overview of workplace safety posters.

Injury Reporting Deadlines

Two clocks start when someone gets hurt. The employee has 30 days to advise the employer of the injury or its first manifestation, and the employer has 7 days from actual knowledge to report it to the carrier. Both deadlines come from section 440.185.

The 30-day employee deadline has exceptions that quietly protect the worker. Late notice does not bar a claim if the employer already had actual knowledge, if the work connection needed a medical opinion first, if exceptional circumstances explain the delay, or if the employer failed to post the required notice. That last exception is why the poster and the deadline belong in the same conversation.

The employer side of the schedule carries its own fine. An employer or carrier that fails to send a required form, report or notice on time faces an administrative fine of up to $500 for each failure, and when the missed item is the employer’s 7-day report to the carrier, the statute puts the fine on the employer rather than the carrier.

One benefit timing detail is worth knowing before an employee asks. Compensation is not payable for the first 7 days of disability, medical care aside, but if the disability runs past 21 days, benefits are allowed from the first day. Recordkeeping for the injury itself sits in a separate federal system, which our guide to OSHA forms 300 and 301 explains.

Penalties for Going Without

Florida enforces coverage with a stop-work order, which does exactly what the name says: all business operations cease until the department releases the order. Failure to secure coverage, or failure to produce requested business records within 21 days, is deemed an immediate serious danger to the public under section 440.107, and the order issues within 72 hours.

The money is calculated from what you did not pay. The penalty is two times the premium that would have applied to your payroll for the period you went uncovered, looking back 12 months, or 24 months for an employer who concealed payroll or has been through this before. The floor is $1,000 and it survives every reduction.

There are real discounts for cooperating. A first-time employer gets credit for the initial premium payment on a new policy, a 25 percent reduction for producing the requested business records within 21 days, and a further 15 percent reduction for scoring at least 80 percent on the department’s online coverage and compliance tutorial. None of that applies to a second offense, and any subsequent violation within 5 years is deemed a knowing act, which opens the criminal provisions of section 440.105.

The exposure that ends businesses is not the fine. An employer who failed to secure coverage loses the exclusive remedy bargain under section 440.11(1)(a): the injured worker may skip the compensation system and sue at law, and section 440.06 strips the fellow servant, assumption of risk and comparative negligence defenses from that lawsuit. A serious injury then lands as an ordinary tort claim with the defenses removed.

What to Do When an Injury Happens

The order of operations matters, because two of these steps have deadlines attached and one of them decides whether the medical bills are compensable. Here is the sequence I hand to Florida clients.

The part employers underestimate is the paperwork trail after week one. Restrictions change, the carrier asks for wage statements, and the employee needs to know who is coordinating. Keeping injury documentation, medical restrictions and return-to-work notes in the same employee record as everything else is exactly the kind of thing FirstHR was built to hold for a company without an HR department.

If you are still setting up the basics for a first Florida hire, the payroll, tax and new hire steps sit in our walkthrough on how to hire employees in Florida, and the state pay floor is covered on the Florida minimum wage page.

Frequently Asked Questions