Certain business owners who meet the statutory requirements may elect to exclude themselves from workers' compensation insurance coverage, including:
The California Labor Code (Sections 3351 and 3352) governs the exclusion of these individuals. Effective July 1, 2018, the individuals who may elect to exclude themselves from coverage if they meet the requirements for exclusion include:
In order to be excluded, the individual must execute a document, in writing and under penalty of perjury, waiving his or her rights under the Labor Code and stating that he or she has the qualifications or coverage(s) required by the Labor Code. There are additional waiver requirements for officers or members of the board of directors of a cooperative corporation and owners of a professional corporation.
Effective July 1, 2018, a sole shareholder who is an officer or director of a private corporation or a private cooperative corporation, or who is an owner of a private professional corporation, is excluded from the definition of “employee,” unless the officer, director, owner, private corporation, private cooperative corporation or private professional corporation, as applicable, has elected to be subject to liability for workers’ compensation pursuant to Labor Code Section 4151(a).
See the Related Documents below for sample waiver forms and additional guidance published by the California Department of Insurance.
If you have questions concerning these exclusions, please consult your insurance professional or legal advisor.
When the above individuals are subject to workers' compensation coverage, the annual payroll used for premium computation is subject to minimum and maximum limitations. These limitations apply based on the effective date of the policy, may be adjusted annually and can be found in Part 3, Section V, Rule 1, Subrules j – m and p of the California Workers' Compensation Uniform Statistical Reporting Plan—1995. Below is a list of recent minimums and maximums: