Some corporate officers are exempt from mandatory coverage. Use the tabs below to find the different exemption criteria for officers of public corporations, non-public corporations, and family corporations.

Types of corporations:

Public corporations - a public company is a corporation that has a class of shares that are publicly traded as defined in RCW 23B.01.400(28)

Non-public corporations - a corporation that has shares that are not publicly traded

Family corporations - a non-public corporation where all of the officers are related within the third degree. Third degree refers to: parents, children, grandchildren, brothers, sisters, grandparents, great-grandchildren, nephews, nieces, uncles, aunts, and great-grandparents

Public corporations

Public company means a corporation that has a class of shares that are publicly traded as defined in RCW 23B.01.400(28).

Important: When determining corporate officer coverage, substance is more important than form. All workers are covered by workers’ compensation insurance unless they meet strict rules for exemption. Workers who are named as officers and don’t meet the criteria for exemption must be covered by workers’ compensation insurance.

To be exempt, officers of a public corporation must meet all of the following criteria:

  1. They must be a bona fide officer and a bona fide director. To be considered a bona fide officer and director:
    1. The individual must be voluntarily elected, or appointed to the position, of their own free will and with their express knowledge AND
    2. The election or appointment must be made in accordance with the corporate articles and bylaws
  2. They must be a shareholder in the corporation with stock issued in their name
  3. They must exercise substantial control in the daily management of the corporation
    1. This means the individual makes managerial decisions over a business function or functions that have some effect on the entire corporation
  4. They cannot perform manual labor as part of their duties

If you would like to purchase coverage for exempt corporate officers visit How to Get a Workers' Compensation Account

Non-public corporations

Non-public corporations means a corporation that has shares that are not publicly traded (see Family Corporations tab)

Important: When determining corporate officer coverage, substance is more important than form. All workers are covered by workers’ compensation insurance unless they meet strict rules for exemption. Workers who are named as officers and don’t meet the criteria for exemption must be covered by workers’ compensation insurance.

To be exempt, officers of a non-public corporation must meet all of the following criteria:

  1. They must be a bona fide officer. To be considered a bona fide officer:
    1. The individual must be voluntarily elected, or appointed to the position, of their own free will and with their express knowledge AND
    2. The election or appointment must be made in accordance with the corporate articles and bylaws
  2. They must be a shareholder in the corporation with stock issued in their name
  3. They must exercise substantial control in the daily management of the corporation
    1. This means the individual makes managerial decisions over a business function or functions that have some effect on the entire corporation
  4. The corporation can exempt eight officers maximum
    1. If the corporation has more than eight officers at any time, the corporation may choose which eight officers, that meet the above criteria, are exempt. All other officers are covered by workers’ compensation insurance

If you would like to purchase coverage for exempt corporate officers visit How to Get a Workers' Compensation Account

Family corporations

Family corporations - a non-public corporation where all of the officers are related within the third degree. Third degree refers to: parents, children, grandchildren, brothers, sisters, grandparents, great-grandchildren, nephews, nieces, uncles, aunts, and great-grandparents

Important: If any of the officers are not related within the third degree as defined below, then only apply the criteria in the tab called Non-Public Corporations. For example, if a non-public corporation has several related officers and one officer who is not related, they can’t apply the exemption criteria from the Family Corporations tab.

To be exempt, all of the officers of the corporation must meet the following criteria:

  1. They must be a bona fide officer. To be considered a bona fide officer:
    1. The individual must be voluntarily elected, or appointed to the position, of their own free will and with their express knowledge AND
    2. The election or appointment must be made in accordance with the corporate articles and bylaws
  2. They must be related within the third degree by blood or by marriage.
    1. Third degree refers to: parents, children, grandchildren, brothers, sisters, grandparents, great-grandchildren, nephews, nieces, uncles, aunts, and great-grandparents

There is no limit to the number of bona fide, related officers who are exempt.

If you would like to purchase coverage for exempt corporate officers visit How to Get a Workers' Compensation Account