Frequently Asked Questions From Employers about Coverage

Louisiana law states that all employers obtain and maintain a policy of workers’ compensation insurance for all of their employees. There are certain exceptions. Below is list of questions and answers that may help you understand the compliance regulations for workers’ compensation in the State of Louisiana.

1. How many employees do I have to employ before I am required to carry workers’ compensation insurance?
2. How does a new business obtain workers’ compensation insurance?
3. Are there any businesses that are exempt from carrying workers’ compensation insurance?
4. How much does workers’ compensation insurance cost?
5. I have no employees. Do I still have to carry workers’ compensation insurance on myself?
6. Does Louisiana issue certificates that will state that I am exempt from carrying workers’ compensation insurance?
7. As a small business owner, do I have to carry workers’ compensation on myself as well as my family members?
8. I treat all of my employees as “independent contractors”. Do I still have to carry workers’ compensation on them?
9. I sometimes hire subcontractors and independent contractors. Am I responsible for their workers’ compensation insurance?
10. Can I withhold premiums from my employee’s paychecks to pay for my workers’ compensation insurance policy?
11. Are there penalties for not carrying workers’ compensation insurance?
12. I am an out-of-state employer. Do I have to have to purchase 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 employees.

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2. 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. A list of approved companies can be found by clicking here
   • By making application to the Assistant Secetary of the Office of Workers’ Compensation to become an approved Self-Insured employer. Click here for more information on Self-Insurance
   • By obtaining membership in an approved Group Self-Insurance Fund

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3. 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 certain federal laws
   • 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
   • Uncompensated officers and members of boards of directors of certain non-profit organizations
   • Landmen

   If you’re not sure, contact the Office of Workers’ compensation at (800) 201-3362 or by email at WCFraud@lwc.la.gov.

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4. How much does workers’ compensation insurance cost?

   Workers’ compensation premiums are determined by several factors including your total annual payroll, the type of work your employees are engaged in, and your business’s past accident history.

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5. 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.

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6. Does Louisiana issue certificates that will state that I am exempt from carrying workers’ compensation insurance?

   Louisiana issues no such exemption forms.

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7. As a small business owner, do I have to carry workers’ compensation on myself as well as my family members?

   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.

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8. 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. If you’re not sure if an independent contractor should be treated as an employee, take the test by clicking here.

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9. 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.

   Click here to perform a workers’ compensation coverage verification search.

10. Can I withhold premiums from my employee’s paychecks to pay for my workers’ compensation insurance policy?

    No. Louisiana law makes is very clear that employers cannot withhold premium payments from their employees to pay for workers’ compensation insurance. This includes employees misclassified as independent contractors. Employers found in violation may face serious civil and criminal fines as well as possible incarceration.

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11. 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 in regard to having a workers’ compensation insurance policy, or for providing false information in order to reduce his/her 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.

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12. 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.

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