Small business owners in Louisiana should consider covering themselves with the most common types of business insurance, including general liability and commercial auto policies, because it will leave their business better protected. One type of coverage they’re required to have, however, is workers’ compensation insurance. Louisiana, like most states, requires employers to purchase workers’ comp policies for any and all employees, even if the business has only one.
For the over 900,000 people employed by small businesses in Louisiana, this mandatory workers’ compensation insurance coverage gives them financial benefits for work-related injuries. It also shields employers from civil lawsuits brought on by injured employees or their families.
If you’re a small business owner in Louisiana and either have, or are thinking about adding, employees, here are some quick facts you should know about workers’ compensation insurance in the state of Louisiana.
- In Louisiana, all businesses with even one employee, whether full-time, part-time, or seasonal, are required to have workers’ compensation insurance.
- Louisiana allows businesses to “self-insure” their workers’ comp insurance, with prior approval from the state. This may not a good option for small businesses, given the amount of financial risk that comes with paying out your own workers’ compensation claims.
- Some exceptions to the Louisiana workers’ comp law, meaning workers’ comp insurance is not required, include the following:
- Some private household employees
- Some employees of unincorporated farms
- Some musicians and performers working under specific contracts
- Unpaid members of nonprofit boards
- And more
- Louisiana (like other states) has laws dictating what type of workers’ may be classified as employees versus independent contractors. There are serious penalties for misclassifying workers’ in an attempt to avoid workers’ comp insurance.
- When hiring independent contractors and subcontractors in Louisiana, a business may still be required to obtain workers’ comp coverage on those workers, even if they’re not employees, if the contractor isn’t already insured under a different workers’ comp insurance plan and depending on the type of work the contractor performs.
- Louisiana’s workers’ comp laws provide coverage to employees who are injured on the job, regardless of whose fault the accident was.
- Louisiana’s workers’ comp laws allow non-payment of benefits for injuries that were intentionally self-inflicted by an employee, are the result of a deliberate failure to use provided safety equipment, or if the employee was intoxicated at the time of the injury.
- Louisiana employers that should have workers’ comp insurance, but don’t, can be fined up to $10,000 along with criminal charges and even legally prohibited from conducting business in the future.
- Workers’ comp insurance in Louisiana is overseen by the Louisiana Department of Labor. Its website provides additional resources including frequently asked questions for both employers and employees.
- Employees have 30 days from the time an injury occurs to report it to their employer. Louisiana employers then have ten days from when they received knowledge of the injury (or death), if that injury resulted in more than one week of time off work, in which to file a claim with their workers’ comp insurance.
Remember, every situation is different and state workers’ compensation laws are subject to change, so be sure to do your research and speak with a trusted advisor.
Please note that this content is intended for educational purposes only. As laws change regularly, refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about the basics of workers’ comp or check your current rate in 3 minutes.
