Exempt employees from the Indiana WC Act or who may elect optional coverage.
The Indiana Code is available on the State of Indiana website.
Employment Relationships Not Covered
- Railroad employees
- Employees in federal commerce
- Real estate professionals
- Independent contractors
- Athletes on scholarship
- Inmates of penal institutions
The following categories of employees are exempt from the Indiana Worker’s Compensation Act and cannot elect optional coverage:
- Railroad Employees. Railroad engineers, firemen, conductors, brakemen, flagmen, baggage men, yard engine foremen and their helpers, are excluded from coverage by Ind. Code §22-3-2-2(b). These types of employment are covered by the Federal Employees Liability Act.
- Employees in Federal Commerce. Ind. Code §22-3-2-19 provides that employees engaged in interstate or foreign commerce are not covered by Indiana worker’s compensation if federal law has provided alternative compensation. For example, seamen are covered by the Jones Act, and Longshoremen are covered by the Longshoreman’s and Harbor Workers Act. Currently, riverboat casino employees may be treated as seamen under the Jones Act. Riverboat casino employees who have been injured and are unsure of their rights should contact an attorney familiar with worker’s compensation and with the Jones Act.
Note: Since the issuance of the Guide, an Indiana based federal court also recently analyzed the issue and basically held that because the Indiana boats were moored and did not travel on the open waters, the Jones Act was inapplicable. Reference Howard v. Southern Illinois Riverboat Casino Cruises, Inc., 364 F.3d 854, 857 (7th Cir. 2004).
- Real Estate Professionals. Real estate professionals are not employees, and therefore are not covered under Indiana worker’s compensation if:
- they are licensed real estate agents;
- substantially all their remuneration is directly related to sales volume and not the number of hours worked; and
- they have written agreements with real estate brokers stating that they are not to be treated as employees for tax purposes. Ind. Code §22-3-6-1(b)(6).
- Independent contractors are not employees and therefore are not covered by the Act. The rules for determining who is an independent contractor are those applied by the Internal Revenue Service. The IRS weighs twenty factors in making such a determination. See IRS Publication 937 for more information. It is possible to file Form SS-8 with the IRS for a determination of a worker’s status. Note that special registration procedures are in effect for independent contractors (Clearance Certificate).
An injured worker who has been denied worker’s compensation on the basis that he or she was an independent contractor has the right to file an Application for Adjustment of Claim with the Worker’s Compensation Board. If the Board finds that the worker was an employee, the worker will be covered by the Worker’s Compensation Act.
- Independent Contractors in the Building and Construction Trades. A person is an independent contractor in the construction trades and not covered as an employee under the Act if, and only if, the person is an independent contractor under the guidelines of the Internal Revenue Service. Ind. Code §22-3-6-1(b)(7). These guidelines may be found in IRS Publication 937. See page 13.
- Athletes on Scholarship. A student athlete who accepted a “grant-in-aid” from a state university was held not to be an employee of the university.
- Inmates of penal institutions. Inmates who work in a penal institution with or without pay have been held not to be employees. Inmates injured while incarcerated may have other rights and remedies under the common law.
- Volunteers. A volunteer who provides service without receiving any type of compensation is not an employee and therefore is not covered by the Act. However, if a person receives any compensation for work, whether cash or in-kind, that person could potentially be considered an employee.
- Youth Coaches. SB 508, effective 7/1/2005, amended the Indiana workers compensation statute to exempt, “A person who enters into an independent contractor agreement with a nonprofit corporation that is recognized as tax exempt under Section 501(c)(3) of the Internal Revenue Code (as defined in IC 6-3-1-11(a)) to perform youth coaching services on a part-time basis.”
Employment Relationships that May Elect Optional Coverage:
- Local police and firefighters
- Volunteers; emergency hazardous materials response team
- Executive officers of public or nonprofit corporations
- Sole proprietors
- Partner in a partnership
- Members of limited liability companies
- Managers of limited liability companies
- Rostered volunteers
- Volunteers — state-owned psychiatric institutions
- Casual labor
- Household Employees
- Farm and agricultural employees
The WC Board may be notified of the election of most optional coverages by filing the Election of Coverage Form.
- Local police officers and firefighters. Workers compensation does not apply to municipal employees if:
- they are members of municipal police or fire departments, and
- they are members of a police or firefighter’s pension fund.
However, the municipal council may elect to bring such employees within the medical provisions of the Act (disability and impairment compensation would not be covered). Ind. Code §22-3-2-2(c).
If the medical benefits provided under workers compensation terminate for any reason before the police or firefighter is fully recovered, the municipal council must provide necessary medical treatment until the employee is no longer in need of such treatment. Ind. Code §22-3-2-2(e). Local police officers or fire fighters covered by a medical-only worker’s compensation policy should contact their benefits coordinators or the local clerk or treasurer for more information on coverage.
Other benefits may be available to injured police officers and firefighters outside of the Workers Compensation Act. Ind. Code §36-8-4-5(a) provides the following care to police officers and firefighters who are injured or made ill by the performance of their duties: medical and surgical care; medicines, laboratory, curative and palliative agents and means; X-ray, diagnostic, and therapeutic service including during the recovery period; and hospital and special nursing care if the physician or surgeon in charge considers it necessary for proper recovery. Note, however, that the Workers Compensation Board has no jurisdiction over medical benefits payable pursuant to Ind. Code §36-8-4-5(a).
- Reserve Police Officers as defined by Ind. Code 36-8-3-20 may be covered by the medical treatment and burial expense provisions of the Act. The administrative procedures of the Act apply if compensability of the injury is an issue. Ind. Code 36-8-3-20(j).
- Volunteers working for hazardous materials response team. These workers may be covered by the medical benefit and burial expense provisions of the Act at the option of the employer and employee. Ind. Code §36-8-12-10.
- Executive Officers of Public or Nonprofit Corporations. An executive officer of a municipal corporation, other governmental subdivision, or of a charitable, religious, educational, or other nonprofit corporation may be brought within the coverage of its insurance contract by the corporation by specifically including the executive officer in the contract of insurance. The election to bring the executive officer within the coverage shall continue for the period the contract of insurance is in effect, and during this period, the executive officers brought within the coverage of the insurance contract are considered covered as employees under the Act. Ind. Code §22-3-6-1(b)(2).
- Sole Proprietors. A sole proprietorship may elect to cover the owner as an employee under the Act if the owner is actually engaged in the proprietorship business. If the owner makes this election, the owner must serve written notice of the election upon the owner’s insurance carrier. No owner of a sole proprietorship may be considered an employee under the Act until the notice has been received. Ind. Code §22-3-6-1(b)(4). If the owner of a sole proprietorship is an independent contractor and does not elect coverage, the owner may obtain an Affidavit of Exemption.
- Partner in a partnership. A partner may be insured as an employee under the Act if the partner is actually engaged in the partnership business. If a partner makes this election, the partner must serve written notice of the election upon the partner’s insurance carrier and the Worker’s Compensation Board. No partner may be considered an employee under until the notice has been received. If a partner in a partnership is an independent contractor and does not make the election provided under this subdivision, the partner may obtain an affidavit of exemption under Ind. Code §22–3–2–14.5.
- Owner operators. An owner–operator that provides a motor vehicle and the services of a driver to motor carrier under a written contract that is subject to Ind. Code §8–2.1–18–46, 45 IAC 16–1–13, or 49 CFR 1057 is not an employee of the motor carrier and is therefore not covered under the Act. The owner–operator may elect to be covered and have the owner–operator’s drivers covered under a worker’s compensation insurance policy or authorized self–insurance that insures the motor carrier if the owner–operator pays the premiums as requested by the motor carrier. An election by an owner–operator under this subdivision does not terminate the independent contractor status of the owner–operator for any other purpose. Ind.Code ’22-3-6-1(b)(8).
- Members/managers of limited liability companies. A member or manager in a limited liability company (LLC) may elect to cover the member or manager under the Act if the member or manager is actually engaged in the limited liability company business. To make this election, the member or manager must serve written notice of the election upon the member’s or manager’s insurance carrier and upon the Board. A member or manager may not be considered an employee under the Act until the notice has been received. Ind. Code §22-3-6-1(b)(9).
- Rostered Volunteers A volunteer whose name has been entered and approved on a county, municipal, or township roster of volunteers for volunteer programs operated by the county, municipality, or township may be covered at the option of the governmental unit by the medical-only provisions of the Act. Lost wage and impairment compensation would not be covered. Ind. Code §22-3-2-2.1.
- Volunteer Workers — State-owned or operated psychiatric institutions. A person who performs volunteer work for a state-owned or operated psychiatric institution, receives no compensation of any kind, and who has been approved and accepted as a volunteer worker by the director of the Division of Disability, Aging, and Rehabilitative Services; the Division of Family and Children; or the Division of Mental Health is covered by the medical-only provisions of the Act. Ind. Code §22-3-2-2.3.
The following types of employment are not covered by the mandatory provisions of the Act but may be brought within the Act on a voluntary basis upon notice to the employer, employee, and the Board.
- Casual Labor. Ind. Code §22-3-2-9 exempts “casual” labor from the coverage of the Worker’s Compensation Act. The burden is on the employer to prove that the worker meets the definition of a casual laborer. Employment might be considered casual when it is not in the usual course of trade, business, occupation, profession of the employer or “irregular, unpredictable, sporadic, and brief in nature.” One Indiana case defined casual as “happening or coming to pass without design, and without being foreseen or expected, coming without regularity, occasional, incidental, liable to happen, subject to chance or accident, uncertain, having the air of a chance, or incidental occurrence.” In defining “casual” employment, infrequency of employment or its duration is immaterial. The analysis is concerned with the service rendered or work done, rather than with the temporary nature of the employment contract.
- Household Employees. The employment of “household employees” is exempted from mandatory coverage under the Act. However, individuals employing household help should check with an insurance expert or an attorney for advice on whether their employees meet the definition. If not, they must be covered. Some homeowner’s insurance policies contain a contingent worker’s compensation rider which would allow the issuance of a back dated workers compensation policy in the event an employee at the residence is awarded benefits under the Worker’s Compensation Act. Ind. Code §22-3-2-9.
- Farm and Agricultural Employees. Under Ind. Code §22-3-2-9(a), farm and agricultural employees are excluded from coverage. However, the term “agricultural employee” is limited to workers performing traditional types of farm labor directly related to the tending of crops and livestock. Workers injured doing other types of work should be covered by worker’s compensation insurance.
Remember that any worker has the right to file an Application for Adjustment of Claim with the Workers Compensation Board to determine whether a certain situation is covered. The burden is on the employer to prove that the worker meets the definition of a farm or agricultural laborer and is therefore excluded from coverage.
Agricultural employees should determine whether they are considered by their employers to be exempt from workers compensation. Even if considered exempt, employers have the option to cover employees with worker’s compensation insurance. Some agricultural employers carry farm insurance to cover medical treatment of injured workers. These insurance policies do not provide the wage replacement and impairment benefits available through workers compensation.
- Laborers performing strictly agricultural work, such as driving tractors, tending crops, or managing livestock, are probably not covered by the Act, unless the employer has elected coverage. If the employer has elected coverage, the employee can make a claim by contacting the employer or employer’s insurance carrier.
- If the employee is found to be an “agricultural employee” by the Board, the employee may have common law rights against the employer.
- Agricultural employees whose employers have not elected to purchase coverage may or may not be covered by the Workers Compensation Act, depending on the type of work performed.
- Farmers or other employers whose business is related in some way to agriculture, but who employ laborers to perform non-agricultural work, must provide worker’s compensation coverage for those employees.
- Primarily non-agricultural employers who operate farms are probably exempt from covering employees whose labor is strictly limited to the tending of crops and livestock.
Section 3 of the Statute defines:
(m) Persons engaged in agricultural labor.
The term shall include only services performed:
- on a farm, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and furbearing animals and wildlife;
- in the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation, improvement, or maintenance of the farm and its tools and equipment if the major part of the service is performed on a farm;
- in connection with:
- the production or harvesting of maple sugar or maple syrup or any commodity defined as an agricultural commodity in the Agricultural Marketing Act, as amended (12 U.S.C. 1141j);
- the raising or harvesting of mushrooms;
- the hatching of poultry; or
- the operation or maintenance of ditches, canals, reservoirs, or waterways used exclusively for supplying and storing water for farming purposes; and
- in handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage, to market, or to a carrier for transportation to market, any agricultural or horticultural commodity, but only if service is performed as an incident to ordinary farming operation or, in the case of fruits and vegetables, as an incident to the preparation of fruits and vegetables for market.
However, this exception shall not apply to services performed in connection with any agricultural or horticultural commodity after its delivery to a terminal market or processor for preparation or distribution for consumption. As used in this subdivision, “farm” includes stock, dairy, poultry, fruit, furbearing animals, and truck farms, nurseries, orchards, or greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities. Migrant farm workers should be aware of the provisions of the Federal Migrant Farmworker Protection Act. Migrant farm workers may contact the Migrant Farmworker Project of the Legal Services Organization of Indiana at (317) 631-9410 for assistance.
|Withdrawing Option to Cover Workers
If a farmer decided to no longer provide coverage for his workers, no notification to the Workers Compensation Board is required. However, the employer must notify the workers that coverage will no longer be provided and notice should be in writing. The statute does not state that notice be made in writing but the thought is since the election is required to be in writing, notice to rescind coverage should also be in writing.