Louisiana Workers' Compensation Insurance
Small businesses in the state of Louisiana generally are required to have workers’ compensation insurance for their business.
A workers’ compensation policy is not like other insurance policies that a small business my have. Workers’ compensation is a state regulated policy. Therefore, coverage requirements as well as rates can be different from state to state.
However, most, if not all states require that an employer carry workers’ compensation insurance that covers all employees on it’s payroll in the event of an injury.
Below you will find what Louisiana small business owners need to know about workers’ compensation.
Requirements for workers’ compensation insurance in Louisiana
1. How many employees do I have to employ before I am required to carry workers’ compensation insurance?
Employers in Louisiana are required to maintain workers’ compensation insurance even if they only have one employee. This includes part-time, full-time, temporary, or seasonal workers and minors.
2. Are there any businesses that are exempt from carrying workers’ compensation insurance?
There are certain employees exempt from coverage under the law. Some include:
Certain employees of a private residence.
Certain employees of a private unincorporated farm.
Certain musicians and performers.
Employees covered by the Federal Employer's Liability Act, the Longshoremen's and Harbor Workers' Compensation Act, and the Jones Act.
Employees of railroads or other vessels in interstate or foreign commerce.
Crews of airplanes engaged in crop dusting or spraying operations.
Uncompensated officers and members of boards of directors of certain non-profit organizations.
All real estate brokers or sales agents licensed to do business in the State of Louisiana.
If you’re not sure, contact the Office of Workers’ compensation at (800) 201-3362 or by email at WCFraud@lwc.la.gov.
3. I have no employees. Do I still have to carry workers’ compensation insurance on myself?
Under Louisiana law, there are situations where you may not have to carry workers’ compensation insurance if you have no employees. Some situations include:
The business is owned by one individual with no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors and is not a corporation.
The business is a partnership under the laws of Louisiana, and there are no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors.
The business is a one-or-two person owned corporation, with those individuals owning all of the stock and holding all offices of the corporation and there are no employees, no leased employees, no borrowed employees, no part-time employees, no unpaid volunteers (including family members) and no subcontractors. Specifically, if two people own the corporation, each person must own at least 10% of stock and between them own all the shares of stock in the corporation. In addition, they both must be corporate officers and between the two of them hold all the offices of the corporation.
Please note that there are times when you may have to obtain workers’ compensation insurance on yourself due to contractual obligations.
4. How does a new business obtain workers’ compensation insurance?
Businesses may obtain insurance by:
Obtaining a workers’ compensation insurance policy through a private insurer authorized to operate in the State of Louisiana.
By making application to the Assistant Secretary of the Office of Workers’ Compensation to become an approved Self-Insured employer.
By obtaining membership in an approved Group Self-Insurance Fund.
5. How much does workers’ compensation insurance cost?
Premiums for A workers’ compensation policy in the state of Louisiana are determined by several factors including your total annual payroll, the type of work your employees are engaged in, and your businesses past claims history. A work comp policy is there to protect both the employee and the employer when a worker his hurt while doing their job.
6. As a small business owner, do I have to carry workers’ compensation on myself and my family members who work for me?
Business owners and certain officers of a corporation may choose to exempt themselves from a workers’ compensation insurance policy only if they own at least 10% of the company. This exemption must be done in writing to the insurance company.
7. I treat all of my employees as “independent contractors”. Do I still have to carry workers’ compensation on them?
Louisiana has very specific laws regarding misclassification of employees as independent contractors. Anyone meeting the true definition of an employee must be treated as such and provided with workers’ compensation insurance.
8. I sometimes hire subcontractors and independent contractors. Am I responsible for their workers’ compensation insurance?
You may be. If you hire any uninsured contractors or subcontractors to perform any work which is a part of your trade or business, you may be responsible for paying any workers’ compensation benefits if they are injured and you can be charged a premium by your insurance carrier for the cost of the contract.
9. Are there penalties for not carrying workers’ compensation insurance?
Yes. Employers who fail to carry workers’ compensation insurance can be fined up to $250 per employee for a first violation and $500 per employee for subsequent violations up to $10,000.
Additionally, an employer can be charged with criminal violations for his/her willful failure to provide workers’ compensation insurance, for providing false information regard to having a workers’ compensation insurance policy, or for providing false information in order reduce the amount of a workers’ compensation insurance premium.
Employers in violation of the laws regarding workers’ compensation insurance may be served an injunction against doing further business until a policy is obtained and proof is provided to the Office of Workers’ Compensation.
10. I am an out-of-state employer. Do I have to have to purchase workers’ compensation insurance in Louisiana?
If an out-of-state employer operates in Louisiana with employees of its own state, the owner must provide coverage in accordance with the laws of his state as long as the coverage extends to operate within the borders of Louisiana.
If employees are hired in Louisiana, the employer must provide a policy from an insurance company authorized to conduct business in Louisiana.
Louisiana Workers' Compensation Resources
Louisiana state fund: Louisiana Workforce Commission
Workers’ compensation regulation: Louisiana Workforce Commission
Louisiana rating bureau: NCCI (National Council on Compensation Insurance)