The Basics of Shareholder Workers' Comp

May 10, 2018

Shareholders on company payroll can be exempt from workers’ comp, but there is a downside.

Pennsylvania law requires employees to carry workers’ comp insurance on all full-time and part-time employees. The one exception? Shareholders on the company payroll can be exempt from workers’ comp.

What does this mean for you?

Well, the possible upside is that it may reduce your workers’ comp premium. The downside to consider is that if you, the shareholder, have a workers’ comp claim, you won’t be covered. Is this a risk you’re willing to take?

If you would like to be exempt, you must complete the Application for Executive Officer Exemption form as well as the Executive Officer’s Declaration form and submit them to your insurance carrier.

And while we’re on the topic of workers’ comp, remember that PaySmart offers clients Pay-As-You-Go Workers’ Comp, which is a very smart option that is easy and convenient, and saves you time and money.