Iowa

Buying workers’ compensation for:

Iowa

State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Iowa, some waivers are permitted. Corporate officer.

Who is Required to Purchase Workers’ Compensation Coverage?

Iowa employees are covered by the Iowa workers’ compensation law under most employment relationships. There are no numerical exemptions.

Sole proprietors, partners in a partnership, and members of a limited liability company are not covered by Iowa workers’ compensation law. They may, however, elect to be covered by purchasing insurance that expressly covers them.

Iowa law contains a number of exemptions that make specified employees and their employers exempt from workers’ compensation coverage. Persons eligible to receive compensation under federal law are exempt. In general, limited exemptions exist for persons employed in agriculture or by a relative. Limited exemptions exist when the employment is casual and is not performed for purposes of the employer’s trade or business or if the employee’s services are performed in or about the employer’s dwelling. Some of the exemptions apply only if the employee’s earnings from the employer are less than $1,500 annually. Employers may elect to cover some classes of exempt employees by purchasing an insurance policy the specifically includes those employees.

Factors that Impact Coverage

  • You are a contractor: You are not considered an employee if you meet certain qualifying requirements. However, a contract that designates a person to be an independent contractor does not make the person an independent contractor if the person functions as an employee. Are you an employee or an independent contractor? 20 ways to tell >>
  • You are a sole proprietor, partner or member of an LLC: If you are engaged in the business on a full-time basis, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer: Iowa includes you in coverage, but up to four officers may exclude themselves by completing a Rejection of Workers’ Compensation or Employer’s Liability Coverage form (available through the Workers’ Compensation Commissioner’s office).

Failure to Secure Compensation

Criminal and civil penalties can be imposed on employers who violate the mandatory insurance law. Employers who operate without insurance illegally lose the exclusive remedy protection of the workers’ compensation law and are liable to the employee for the full measure of damages available under tort law if an injured employee sues the employer in court.

Proof of Coverage is Required

The Iowa Occupational Safety and Health Act requires that employees be informed of the job safety and health protection provided under the Act. The poster, Safety and Health Protection on the job, is to be used for this purpose, and must be posted in a prominent place in the establishment to which the employees usually report to work. The poster briefly states the intent and coverage of the Act and the responsibilities of employers and employees to maintain safe and healthful working conditions.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Key Resources

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.