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By the Numbers: Calculating Employees for Workers’ Comp

By October 18, 2022December 16th, 2022Legal

Calculating Employees for Worker's CompensationThe number of workers employed by a business is often a determinant in how certain employment laws apply.

This month, we will focus on how a business should define its number of employees for the purpose of workers’ compensation (workers’ comp) requirements. Workers’ comp laws protect people who become injured or disabled while working at their jobs. They provide replacement income in the event of a workplace accident which prohibits the employee from returning to work or a lump sum payment when the accident results in permanent injury.

Is workers’ comp mandatory?
Yes, workers’ comp is mandated by state law. Each state has established its own workers’ comp statutes and administration that are required for most employers. Federal statutes apply to federal employees only.

Who is required to provide workers’ comp?
Requirements for carrying workers’ comp insurance are based on a business’s number of employees, and the rules vary by state. In the state of Georgia, businesses are required to provide workers’ comp insurance if they regularly employ three or more persons, while South Carolina requires coverage for four or more employees.

What counts as an employee?
If your company is incorporated or an LLC, the officers or members are automatically included in the employee count. Family members are often included as well. For example, an owner, a spouse on the payroll and one employee qualifies as three employees.

Part-time employees count too if they are a regular part of how you do business. Employees who only work on weekends and seasonal hires also apply toward your employee count.

Corporate officers may request an exemption from workers’ comp coverage, but they need to complete Form WC-10 and give it to their insurance company.

Note: If you’re a sole proprietor, you do not need to purchase workers’ comp for yourself.

If you have workers’ comp questions, MarathonHR can help
In addition to assisting employers with submitting payments for their workers’ comp premiums, we offer a variety of Workers’ Compensation and Safety Administration services, including claims management, dispute resolution, medical billing reviews and Certificate of Insurance processing.

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