The Short Answer
Yes, in Alabama, most employers with 5 or more employees are legally required to carry workers’ compensation insurance. This rule applies to public and private businesses across most industries. However, there are notable exemptions. Sole proprietors, partners, certain LLC members, farm laborers, domestic workers, and independent contractors may fall under a workers’ compensation exemption.
If your employer doesn’t have workers’ comp but is legally required to, they may face serious consequences, including lawsuits, fines, and even criminal charges. If you’re injured on the job and your employer is uninsured, you may still have legal options and could be owed compensation for medical expenses, lost wages, or other damages. A Montgomery workers’ comp lawyer from our office can help if you are put in this situation.
Key Takeaways
- Workers’ comp is mandatory for employers with 5+ employees in Alabama
- Sole proprietors, partners, and independent contractors may be exempt
- Failure to carry insurance opens employers to civil lawsuits and penalties
- Workers can report non-compliance and seek legal compensation
- Coverage includes medical care, disability payments, and death benefits
Table of Contents
Who Is Required to Have Workers’ Comp in Alabama?
In Alabama, workers’ compensation insurance is required for most employers to help protect both workers and businesses in the event of a job-related injury.
This requirement applies to:
- All public and private businesses with 5 or more employees, regardless of whether they are full-time or part-time
- Corporations, LLCs, and partnerships that hire staff to perform work
- Most industries, including construction, retail, healthcare, manufacturing, food service, and general labor sectors
Employers can either purchase workers’ compensation coverage through a private insurance company or apply to become self-insured. However, to self-insure, they must meet strict financial and regulatory requirements set by the state to ensure they can cover potential claims.
Failure to carry the required insurance can expose an employer to serious legal and financial consequences.
Who Is Exempt From Workers’ Compensation in Alabama?
Not every employer in Alabama is legally required to carry workers’ comp. Common exemptions include:
- Sole proprietors and business partners who do not employ other workers
- LLC members who formally opt out
- Domestic workers, farm laborers, and individuals performing casual labor
- Independent contractors, though misclassification is a frequent issue
Even if an employer qualifies for an exemption, they may still opt to purchase workers’ compensation coverage to help manage potential liability risks.
What Happens If an Employer Doesn’t Have Workers’ Comp?
| Violation | Explanation |
| Direct Civil Liability | Employers may be held personally responsible for covering the full cost of an injured worker’s damages. |
| Lawsuits From Injured Employees | Injured workers can file personal injury lawsuits, which could lead to larger settlements than typical workers’ comp claims. |
| Fines, Penalties, or Criminal Charges | Non-compliance can result in significant monetary fines, regulatory penalties, or even criminal prosecution. |
How to Report a Non-Compliant Employer in Alabama
If you believe your employer is not carrying required workers’ compensation insurance, you can file a complaint with the Alabama Department of Labor Workers’ Compensation Division.
Be prepared to include the following details:
- The employer’s name and contact information
- A description of the incident or injury
- Proof of employment and injury, if available
Whistleblower protections exist to help ensure employees can report violations without fear of retaliation.
What Workers’ Compensation Covers in Alabama
If your employer carries valid workers’ comp insurance, benefits may include:
- Medical treatment, such as surgeries, prescriptions, physical therapy, and other necessary care
- Mileage reimbursement for travel to and from medical appointments
- Temporary or permanent disability payments for lost wages
- Vocational rehabilitation services to help you return to the workforce
- Death benefits for dependents in the event of a fatal work-related injury
FAQs
Even if your employer claims you’re an independent contractor, you may still qualify for workers’ compensation benefits. Misclassification is common, especially in industries like construction, transportation, and gig work. Alabama law looks at factors such as how much control the employer had over your work and whether you were treated like an employee. You may want to speak with a lawyer to determine if you’re potentially entitled to benefits despite the classification.
Yes. If your employer is required to carry workers’ comp but doesn’t, you can file a personal injury lawsuit against them. Unlike workers’ comp claims, these lawsuits may allow you to pursue damages for pain and suffering. Additionally, the burden of proof may be lower in these cases, meaning you may not have to meet the same strict standards as you would in other types of claims.
You can request written proof of coverage directly from your employer. If you’re not comfortable doing that, or if they refuse to provide it, you can contact the Alabama Department of Labor Workers’ Compensation Division. They can verify whether your employer is properly insured under state law.
When to Contact a Workers’ Comp Lawyer
You should consider speaking with a workers’ compensation attorney if your claim has been denied, if you were told you’re exempt but believe you should be covered, if your employer doesn’t carry the required insurance, or if you’re experiencing retaliation after reporting an injury. Legal guidance can be especially valuable in these situations, as the laws around coverage and classification can be complex.
A qualified workers’ comp attorney can help you understand your rights and pursue any compensation you may be owed under Alabama law. Contact us for a free consultation.
