Alabama Workers’ Comp Exemption
We file workers’ compensation exemptions for Alabama sole proprietors, LLC members, and corporate officers. Send us your details and we’ll confirm whether you qualify and handle the filing.
When coverage is required in Alabama
Coverage is mandatory once an employer regularly employs five (5) or more full-time or part-time employees (officers of a corporation count toward this number) in one business. Businesses that construct or assist on-site with construction of new single-family, detached residential dwellings must carry coverage regardless of employee count — the small-employer exemption does not apply to that trade. Employers of domestic workers, farm laborers, or casual employees are not required to carry coverage but may elect to. Municipalities under 2,000 population (per the most recent federal census) are also not required to carry it.
Who can be excluded in Alabama
Sole proprietors
Not automatically covered/required. A sole proprietor in a business under the 5-employee threshold may voluntarily elect to bring the business under the Act by filing written notice (Form WC-14) with the Alabama Department of Labor; this election can later be withdrawn by like notice.
Partners
Same treatment as sole proprietors — not automatically covered if under the small-employer threshold; may elect coverage by filing Form WC-14 with the Department of Labor.
LLC members
Automatically covered as employees by default (and counted toward the 5-employee threshold). An individual LLC member may elect to be exempt from coverage by filing written certification of that election directly with the employer's workers' compensation insurance carrier. Since Act No. 2017-390 (effective Aug. 1, 2017), no filing with the Department of Labor is required for this exclusion — carrier notification is sufficient. The exemption remains in effect until revoked (revocation is done the same way, by written certification to the carrier, and generally takes effect at the next policy year).
Corporate officers
Automatically covered as employees by default (and counted toward the 5-employee threshold). A corporate officer may elect to be exempt the same way as an LLC member: written certification filed with the insurance carrier only, no Department of Labor filing required post-2017. No cap on the number of officers who may elect exemption was found in the sources reviewed.
Construction rules in Alabama
Employers in the business of constructing or assisting on-site in the construction of new single-family, detached residential dwellings must carry workers' compensation coverage no matter how few employees they have — this industry is carved OUT of the small-employer (fewer-than-5) exemption. (A prior opt-out for this trade under a since-repealed subsection was removed effective Aug. 1, 2008, according to secondary legal-summary sources; the current effect was independently confirmed on Alabama DOL's own insurance-requirements page.)
How the exemption is filed
There is no general state-run exemption certificate/registry for Alabama corporate officers or LLC members — exclusion is handled purely through written certification filed with the employer's insurance carrier (per Act 2017-390). Separately, the Department of Labor's Form WC-14 ("Employer's Notice to Cover Himself/Employees") is used by small employers (under 5 employees), domestic/farm-labor employers, or small municipalities who want to voluntarily accept coverage under the Act, and by a previously-excluded officer/member who wants to revoke that exclusion and be included again — that form is filed with the Alabama Department of Industrial Relations/Department of Labor.
- Statute
- Ala. Code § 25-5-50
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
No fee or expiration period was found for either the small-employer election (Form WC-14) or the officer/LLC-member carrier-filed exemption; none of the sources reviewed mentioned one, so this is left unstated rather than guessed. No cap on the number of officers/members who may be excluded was found. The statute citation (Ala. Code § 25-5-50) is confirmed directly from the text printed on the state's own WC-14 form.
Sources
- https://www.labor.alabama.gov/wc/insurance.aspx
- https://labor.alabama.gov/wc/faq.aspx
- https://labor.alabama.gov/wc/wc_corp_off_exmp_wc14.pdf
- https://alabamaretail.org/news/workers-comp-exemption-llc/
Source material dated Alabama DOL web pages accessed 2026-08-30 (undated); WC-14 form text references Act No. 2017-390 (eff. Aug. 1, 2017). Compiled from official Alabama sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with Alabama Department of Labor, Workers' Compensation Division or ask us and we’ll check it for you.
Workers' comp exemption filing in Alabama
Tell us about your Alabama business and we'll confirm whether you qualify for an exemption.