National Council on Compensation Insurance (NCCI)
901 Peninsula Corporate Circle
Boca Raton, FL 33487-1362
Private Insurance: Allowed
State Fund: None
Assigned Risk: Administered by NCCI
Numerical Exceptions: Virginia law requires every employer who regularly employs three or more full-time or part-time employees to purchase and maintain workers' compensation insurance. Employers with fewer than three employees may voluntarily come under the Act.
Individual Waivers Allowed: Yes on limited basis
Small Deductible Program:
Allowed: Yes - However it is optional that insurance carriers make available
Sole Proprietor: Excluded from coverage/may elect to be included - Sole proprietors are considered owners of businesses and are not covered by workers' compensation. However may elect to obtain coverage for workers' compensation liability by purchasing insurance. If included in coverage a sole proprietors workers compensation payroll will be set at $38,300 as of 4-1-11, $47,100 as of 4-1-2012, $48,600 as of 4-1-2013, $49,700 as of 4-1-2014.
Partners: Excluded from coverage/may elect to be included - Partners are considered owners of businesses and are not covered by workers' compensation. However partners may elect to obtain coverage for workers' compensation liability by purchasing insurance. If included in coverage a partners workers compensation payroll will be set at $38,300 as of 4-1-11, $47,100 as of 4-1-2012, $48,600 as of 4-1-2013, $49,700 as of 4-1-2014.
Corporate Officers: Included in coverage/may elect to be partially exempt - A corporation's officers may choose to reject workers' compensation coverage for accidents, but not for occupational diseases. To do so, officers must file a "Notice of Rejection" with the insurer and with the Commission. If the officers are paid regularly, they are nevertheless counted as employees to determine jurisdiction under the Act. If included in coverage a corporate officer workers compensation payroll is banded between a min/max of $23,400/$93,600 as of 4-1-11, $23,400 / $98,800 as of 4-1-2013, $26,000 / $98,800 as of 4-1-2014. (Note: For non-profit corporations under §501(c)(3) of Title 26 of the U.S. Code, unpaid officers are not considered employees. Unpaid officers need not formally reject coverage and are not counted as employees in determining jurisdiction under the Act.)
LLC Members: Members of a limited liability company (LLC) are considered to be owners of a company and are not covered by workers' compensation unless specifically covered by an insurance policy or either elected or appointed as a manager. The manager of an LLC is treated as a corporate officer under the Act.
Contractors: Basic Guidelines for Contractors and Subcontractors:
Warning: Neither the Workers' Compensation Commission nor the State Corporation Commission of Virginia can provide legal advice on individual contractor/subcontractor situation so we likewise can only provide you with these basic guides. The status of an independent contractor, a subcontractor, and an employee must be determined based upon the facts of each case. The following are general guidelines only.
Employees versus independent contractors: The Workers' Compensation Act of Virginia defines an employee as a person under written or implied contract of hire "except one whose employment is not in the usual course of the trade, business, occupation or profession of the employer."
In distinguishing between an employee and an independent contractor, some important considerations are (1) the right to hire, (2) the power to dismiss, (3) the obligation to pay wages, and (4) the power to control.
Independent contractors are not automatically eligible for workers' compensation: An independent contractor, who is generally a sole proprietor or partner, is not entitled to workers' compensation benefits unless:
a formal election of coverage has been made; or
a written agreement has been reached among the independent contractor, the employer, and the insurance carrier that coverage will be provided.
Employees of contractors are often eligible for workers' compensation: The regular employees of the independent contractor, however, are entitled to workers' compensation benefits so long as the independent contractor employs three or more employees.
Statutory employers: When a sole proprietor, partnership, or corporation contracts to perform work or provide services that are part of the same trade, business, or occupation of the employer, a contractor/subcontractor relationship is established. The contractor becomes the statutory employer of the employees of the subcontractor. When the statutory employer is subject to the Virginia Workers' Compensation Act by virtue of having three or more direct employees or employees of subcontractors, the statutory employer or its insurance carrier becomes liable for the payment of workers' compensation benefits to the injured employees of the subcontractor. This is true whether the subcontractor fails to carry workers' compensation insurance as required by law, or is not required to have workers' compensation insurance.
Effects on statutory employer: The subcontractor's employees are considered employees of the contractor both for liability, and for determining whether the general contractor has three or more employees and must therefore provide workers' compensation coverage under Virginia law.
Effects on subcontractors: Since a potential statutory employer relationship exists for any particular job done through subcontractors, and since the insurance carrier does not have the right to inspect the employment records of the subcontractor, carriers have tended to assess a premium on the employer for his or her subcontractors. Potential statutory employers have often responded by requiring a subcontractor to provide proof of workers' compensation insurance coverage, or by having a percentage of the contract cost withheld to offset the potential cost of insurance premiums.
The fact that a contractor withholds a percentage of the contract cost does not afford any coverage to the subcontractor.
Special Notes: How to secure workers compensation insurance in Virginia:
Purchase and maintain a workers' compensation policy from a company licensed in Virginia;
Apply to the Virginia Workers' Compensation Commission for approval as an independent self-insurer;
Become a member of a group self-insurance association licensed by the Virginia State Corporation Commission; or
Enter into an agreement with a professional employer organization as provided in Section 65.2-801.A.4 of the Code of Virginia
Virginia Workers Compensation Subrogation: The State of Virginia provides information about workers compensation subrogation in it's state statute 65.2-309. This section of Virginia code is titled; Lien against settlement proceeds or verdict in third party suit; subrogation of employer to employee's rights against third parties; evidence; recovery; compromise. You find this statute under the 65.2 Workers Compensation, Chapter 3, Application and Effect of Title. You can view and access this statute online by using the link below, you will be taken to this specific section.
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Information on this page is provided only as a reference. While we strive to mantain accurate information on this site please realize workers compensation laws are complicated and subject to change at any time. No warranty as to the accuracy or completeness of this information is provided or to be implied. You must verify this data before use with the individual governing authority for this state. If you need help with a workers compensation problem or have a specific situation or question please contact our office. Otherwise please consult your states governing authority or an attorney in your state of residency for assistance.