Exempt from Coverage for Self-Employed business owners in WA State

Under Washington State Law most “Self-Employed” business owners are exempt from L&I, State Unemployment Insurance, Washington Paid Family and Medical Leave and WA Cares Long Term Care Insurance.

“Self-Employed” is defined slightly differently for each coverage, and it should be reviewed carefully before making a decision whether a business owner is exempt from coverage.

For example WA State L&I states that owners of businesses, sole proprietors, exempt corporate officers, and partners aren’t required to have workers’ comp coverage in this state. LLC members generally are exempt from workers’ comp, but there are exceptions to that rule, depending on the structure of the LLC.

Further More WA Employment Security Department States that Officers of for-profit corporations who provide services in Washington are automatically exempt from Unemployment Insurance, unless the employer specifically requests coverage, and that Individuals who own a business or are members of limited partnerships or limited liability companies are not eligible for unemployment benefits.

Washington’s Paid Family and Medical Leave Program does not require self-employed (sole proprietor, a joint venturer or a member of a partnership, a member of a limited liability company (LLC), or an independent contractor) owners to participate in the program. However; it does not exclude corporate officers of corporations, for they are not considered self-employed.

WA Cares Long Term Care Insurance generally follows the rules for Washington’s Paid Family and Medical Leave Program.

A business owner can however elect to pay for coverage for some or all the above insurance benefits, if allowed by the governing body of such coverage. Reach out to the governing agency or your business advisor to discuss if you are exempt from the above employer WA requirements, or if you would benefit from electing any of the above coverages.

Materials posted in this article are for informational purposes only and should not be regarded as accounting or tax advice provided by YR Tax Compliance LLC. These materials have been prepared by professionals, however they should not replace professional services, and the user should seek advice before acting on any information presented. Every situation is uniquely different, and could make a world of difference on implementation of specific regulations.  YR TAX Compliance LLC assumes no obligation to provide notification of changes of tax laws, regulations or other factors that could affect the information posted.