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Affidavit of exempt status under the Workers’ Compensation Act
What is the affidavit of exempt status?
Oklahoma state law created the
affidavit of exempt status under the Workers’ Compensation Act and the
exempt status fact sheet for any person who is not required to be covered under workers’ compensation.
The affidavit and fact sheet are tools to help:
- evaluate a policyholder’s relationship with workers and
- identify whether those workers are independent contractors who do not require coverage under the policy.
Is the worker an employee or independent contractor?
Factors surrounding whether there is an “employer/employee”
relationship or an “independent contractor”
relationship can be complicated. View a list of factors
used to determine if a subcontractor is an independent contractor or employee.
What is the role of the general contractor?
The general contractor should obtain completed affidavits and fact sheets from each subcontractor
who does not have proof of a valid workers’ compensation insurance policy. The general contractor
must keep and retain affidavits and fact sheets as documentation for all independent contractors
hired to conduct business for the general contractor. These documents must be made available in
connection with any audit of the workers’ compensation policy by CompSource Oklahoma.
The general contractor is responsible for verifying that the individuals used to complete the
work are truly independent contractors and not employees. Otherwise, those individuals may be
included in the final audit as uninsured contract labor.
Individuals associating themselves together…for a particular piece of work may not be eligible for independent contractor status.
What is the role of the subcontractor?
Each subcontractor must give a signed affidavit and fact sheet to the general contractor.
If completion of the exempt status fact sheet indicates the subcontractor is an independent
contractor, the affidavit of exempt status should then be completed and signed by the
subcontractor, and notarized by a notary public. The documents are good for one year from the date of notary.
Please note: Under workers’ compensation law, a subcontractor may be deemed an
employee.
What is CompSource’s role?
CompSource Oklahoma reviews each affidavit and the fact sheet when determining whether to
charge premium on payments made to those workers. CompSource Oklahoma will continue to
review the factors surrounding whether a subcontractor is an employee or an independent
contractor. If there is a risk of a claim against the subcontractor or his/her employees,
CompSource Oklahoma must charge additional premium for this risk. Final determination
is made once the workers’ compensation premium auditor reviews the policyholder’s
records and documentation.
Why would a contractor be responsible for claims on a subcontractor who presented an affidavit and fact sheet?
The Oklahoma Workers’ Compensation Act allows the Workers’ Compensation Court to make the
determination on liability for claims. Execution of the affidavit establishes a
presumption that the person who signed it is not an employee for purposes of the
Workers' Compensation Act. The contractor shall not be liable for injuries of any
subcontractor unless an employer-employee relationship is found to exist by the
Workers’ Compensation Court despite the execution of the affidavit of exempt status.
Questions?
CompSource Oklahoma is committed to working with, protecting and educating policyholders
regarding the risk of workers’ compensation claims. Please contact CompSource’s Underwriting
department at (405) 232-7663 ext. 5102 with any questions regarding the affidavit and fact
sheet or independent contractors.
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