A lot of people always ask me when they are required to carry worker’s compensation in Georgia. To be compliant with the law, you are required to secure a worker’s compensation policy when you have 3 or more employees. However, not only is worker’s compensation a policy to have to protect your worker’s, it is also there to protect you and your business against a large financial loss involving an employee injury. With that said, you should have a worker’s compensation the day you hire your first employee. You may not be required by law to have a policy, but if that worker is injured it is your responsibility to cover his medical expenses and lost wages.
However, I want to focus on being compliant with the law in this article. As I mentioned before, you are required by law to have a policy when you have 3 or more employees. Your business structure actually determines the number of employees you have. If you are organized as an Inc. or LLC, the corporation is the employer and EVERYONE underneath the corporation, including it’s officers are employees. That means if you have 2 company owners and 1 employee, you meet the criteria to have a worker’s compensation policy since in the eyes of the law, the 2 owners also count as employees. However, if you are a sole proprietor you do not count in the equation since you are recognized as the employer.
If you are organized as Inc. or LLC, up to 5 officers may exclude themselves from coverage and therefore lower their premium on the worker’s comp policy as their salaries are not counted in the premium calculation. On the flip side, if an officer of the corporation is hurt they cannot file a claim against the worker’s comp policy. This exclusion may also affect how your health insurance responds.
If you have additional questions or now realize you may need to get worker’s compensation, please call Provident Financial Group at 770-499-2040 and we can review your current insurance program and offer a proposal to get worker’s compensation in force.
Provident Financial Group
Property & Casualty Manager