Other categories of employment are excluded from the workers’ compensation requirement: • Closely Held Corporations: Executive officers owning 25 percent or more of a closely held corporation or spouse, parent or child of the executive officer, regardless of age, may be automatically excluded unless the business elects to cover them. To qualify for this exemption, such corporation must have 10 or fewer shareholders and less than 22,800 hours of payroll in the preceding calendar year. Employees of such a corporation who are within the third degree of kindred according to the rules of civil law related by blood or marriage to an executive officer of the corporation may also be excluded by filing a written request to be excluded. This includes brothers, sisters, aunts, uncles, grandparents and grandchildren. Cousins may not be excluded from coverage. • Limited Liability Companies: For the purpose of worker’s compensation exclusions, managers of the LLC and their family members are treated the same as executive officers of closely held corporations. • Family Farm Operations: Persons employed by a family farm which pays or is obligated to pay cash wages during the preceding calendar year of less than $8,000 in cash wages, or less than the statewide average annual wage when the farm operation has a total liability and medical payment coverage equal to $300,000 and $5,000, respectively, under a farm liability insurance policy, and the policy covers injuries to farm laborers. The farmer-employer’s immediate family members, farmers or their family members exchanging work within the community and their employees are also exempted from coverage. Executive officers of a family farm corporation are excluded. • Casual Employees: An employee who is not working in the usual course of the trade, business, profession or occupation of the employer and both the employee and the employer understand that the employment is meant to be for one time or infrequent rather than permanent or periodically regular. • Household Workers: This includes a domestic worker, a repairer, groundskeeper or maintenance worker at a private household who earns less than $1,000 cash during a quarter of the year unless more than $1,000 was earned in any quarter of the previous year. The Minnesota Department of Labor and Industry has information sheets which expand the definitions and criteria above. They can be accessed at the address, phone number or website listed in the Resource Directory section of this Guide. The Minnesota Workers’ Compensation Act provides that insurance coverage may be purchased for many of the above named classes of persons. When coverage is provided, the insured person becomes an “employee” as defined within the statute. When coverage is elected or terminated, written notice must be provided to the insurer and becomes effective the day following receipt of the notice or at a later date requested in the notice. An employer contracting with an independent contractor may also provide insurance for that person. The employer may only charge the independent contractor a fee for the coverage if the independent contractor elects in writing to be covered and is issued an endorsement setting forth the terms of the coverage, the names of the persons covered, the fee charged and how the fee is calculated.
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