The owners of a privately held closed corporation employ their wives in the company. Since the owners can elect to be excluded from Workers’ Comp, can the wives be excluded also?
If the entity were a sole proprietorship or partnership, the answer is yes, wives could be excluded, as could young children who are still living at home.
However, a ‘corporation’ has no wives and children, only employees. As such, wives must be covered.
As a ‘solution’ to this issue, wives may be made officers in the company, and issued at least one share of stock. They would then meet the eligibility requirements to elect exclusion from Workers’ Comp insurance.
When making this decision, it may be useful to review issues raised in a previous blog, “When Can Executive Officers Be Excluded from Workers’ Comp?”
It’s prudent to take inventory of applicable coverage to make sure that eliminating Workers’ Comp leaves individuals with no coverage at all.
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